Kentcliffe P/L v Supa-mesh Sales & Services P/L

[1993] FCA 436

KENTCLIFFE PTY LTD v. SUPA-MESH SALES AND SERVICES PTY LTD; STEPHEN DONALD
RICE; DEBBIE LYN RHODES and DEAN JEFFEREY RICE
No. VG44 of 1993
FED No. 436
Number of pages - 5
Trade Marks and Trade Names - Trade Practices
(1993) ATPR 41-248

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Jenkinson J(1)

CATCHWORDS

Trade Marks and Trade Names - Infringement and passing off - Resemblance and liability to deceive - Use of similar logos - "Regency" and "Riceys" in similar type and both underlined.

Trade Practices - Consumer protection - Misleading or deceptive conduct - Passing off - Use of similar logos - "Regency" and "Riceys" in similar type and both underlined.

Trade Practices Act 1974 - s.52.

HEARING

MELBOURNE, 26, 27 and 28 May, 1993

#DATE 30:6:1993

Counsel for the Applicant: Dr. J. McL. Emmerson QC and

Mr. C.D. Golvan

Counsel for the Respondent: Mr. M. Goldblatt

Solicitors for the Applicant: Coltmans

Solicitors for the Respondent: Linacre Dillon

JUDGE1

JENKINSON J Trial of a proceeding for injunctive and other relief for what is alleged to be conduct in contravention of s.52 of the Trade Practices Act 1974 and s.11 of the Fair Trading Act 1985 (Vic.) and passing off.

1. The applicant carries on business under a name represented thus:
   

(NAME OMITTED)

1. The first respondent carries on business under words represented thus:
   

(WORDS OMITTED)

1. The applicant commenced business under the business name "Regency" in 1985. In November 1986 the name "Regency Wardrobes, Shower screens and Mirrors" was registered under the Business Names Act 1962 (Vic.). The applicant manufactured and still manufactures wardrobes, shower screens, mirrors, security doors and fly-wire. The business expanded and now includes fit-outs for offices and hotels, commercial glazing, balustrading and the fencing of swimming pools. The products are sold to builders and retailers and the public. The applicant conducts retail shops in suburbs of Melbourne and in two Victorian provincial cities. The applicant commenced selling by retail in one shop in Moorabbin. There are now about eleven retail shops in Victoria conducted by the applicant. Agents sell the applicant's goods in Morwell and Shepparton. The applicant trades also in Queensland and South Australia. The applicant's turnover in 1992 was about $20,000,000, of which about nine twentieths was in retail activity. The applicant advertises extensively its retail activities, and the advertisements give prominence to the word "Regency", almost invariably in the type face in which it - and the words "Riceys Glass and Security Door Maintenance" - are printed above, which type face is called Harlow Solid, with the addition of the horizontal underlining since 1989. In 1992 the applicant's advertising expenditure was stated to be:
   

"Local papers $ 200,000 Melbourne Age $ 30,000 Yellow Pages $ 200,000 Herald Sun $ 30,000 Magazine $ 25,000 Brochures $ 20,000 Home Shows x 2 $ 30,000 Television $ 70,000 Radio $ 40,000 Sponsorship $ 20,000 $ 665,000"

A person who obtains a building permit for renovation work is sent one of the applicant's brochures shortly afterwards, and then receives a phone call, by an employee of the applicant, designed to induce sales of the applicant's products. About sixty of the applicant's motor vehicles are travelling about Melbourne each business day, all carrying the word "Regency", in Harlow Solid and underlined, as a prominent part of the signage on the exterior. The applicant has exhibited its products each year at public exhibitions of residential fittings and furniture, commonly called home shows, at a stand where the same trade name, printed in red Harlow Solid and underlined, is prominently and repetitively displayed. In the Yellow Pages of the telephone directory the same colouring, prominence and repetition of the name is employed to advertise the applicant's products under the "Shower Screens" and "Wardrobes" classifications. The name is also prominently displayed outside and within the applicant's shops and other premises.

1. The respondent Stephen Donald Rice ("Mr. Rice") began to carry on business in December 1987, under the business name "Glass and Security Door Maintenance Services", from his home in East Bentleigh. The first-named respondent, of which Mr. Rice and his wife, the third-named respondent, are the only shareholders and directors, was incorporated in September 1988 and thereafter conducted the business under the same business name. The business is repairing glass sliding doors and windows and security doors and flywire doors and shower screens and shop fronts. The applicant also repairs shower screens and has advertised its repair service. The whole of the evidence fails to persuade me to a finding that repairing is a service that the applicant has sought in recent years strongly to promote. But a vendor of new shower screens who seeks to install what he sells to consumers, as the applicant does, is in competition with the repairer of shower screens. Mr. Rice represented the first-named respondent and himself as seeking custom only as repairers, and as resorting to replacement of shower screens reluctantly and without expectation of any worthwhile profit, but merely, as he deposed, "to enable us to offer a complete service". But when in early November 1992 the respondents moved the business from Mr. Rice's home to business premises at 232-257 Wickham Road Moorabbin it was agreed between Mr. Rice and Harry Mrocki, one of the applicant's directors, that a display of Regency shower screens would be set up by Mr. Mrocki in the respondent's show room at those premises in time for the formal opening of the premises which was to be held about a month later. Each of Mr. Rice and Mr. Mrocki swore that it was the other's proposal that the display should be set up. Whoever made the proposal, I am persuaded that Mr. Rice was not indifferent to combining installation of new shower screens with repairing shower screens as one means of expanding the volume of the respondent's business, which was Mr. Rice's avowed object in moving to business premises. I am unable to accept Mr. Rice's evidence that "the First Respondent has no interest in the new product. The company's policy is to move heaven and earth to repair a product, rather than replace it with a new product. It is very much against our interests to replace any old products with new products. Repairing is our goal because that is where we make our profit. I personally feel that if I have to replace a product, I have failed. If I am forced to put in a new shower screen, it needs to be bought from a company supplying new products such as the Applicant and there is no profit in it for our company".

2. In September 1990 Mr. Rice had consulted one of his neighbours, John Finney, who conducts a signwriting business, with a view to having the business name of the respondent painted on a utility motor vehicle which Mr. Rice had acquired for business use. Mr. Finney recommended what he described as a "free-flowing" style. Mr. Rice selected from samples provided by Mr. Finney the Harlow Solid type, and the words "Glass and Security Door Maintenance" were painted on the utility in that type.

3. The Harlow Solid type face was popular in the eighth decade of this century in Victoria, but is now little used. There are several hundred type faces which may be described as free-flowing and thousands of available type faces. Mr. Harry Mrocki swore, but Mr. Rice denied on oath, that shortly after the utility motor vehicle was adorned with the sign in Harlow Solid Mr. Rice drew the sign to Mr. Mrocki's attention and said that the script was like the script in which Regency was printed. I am not persuaded that Mr. Rice said that, nor persuaded that Mr. Rice realised that the scripts were the same or very similar until 1992.

4. Both Mr. Rice and his brother the fourth-named respondent ("Mr. Dean Rice") have for a nickname the word "Ricey". Both have a strong association with the St. Kilda Football Club and Mr. Dean Rice was in 1992 and still is a member of that Club's team. As a player he is commonly called "Ricey" by club supporters. Mr. Dean Rice works in the business. The brothers decided to use the nickname as a name of the business. The business name "Ricey's" was registered on 15 December 1992. The nature of the business was stated to be "Manufacturer and Repair Doors and Windows". The person stated to be carrying on the business was Mr. Dean Rice. But the respondent company commenced to use the name, without the apostrophe, from early December, usually in association with the words "Glass and Security Door Maintenance". Both those words and the word "Riceys" are printed in Harlow Solid type. The word "Riceys" is ordinarily larger than the other words, and so placed in relation to the other words as to be visually dominant. Usually the word "Riceys" is in a different colour (commonly red) from the colour of the other words. Commonly the colouring of the words and background achieves the colour combination of the St. Kilda Football Club's colours.

5. The word "Riceys" is underlined in a way that is similar to, although not identical with, the manner in which the word "Regency" is underlined by the applicant. Mr. Finney deposed that he designed the underlining in response to Mr. Rice's request that the name "Riceys" be "tizzed up", and without any thought to the underlining of the word "Regency". Mr. Finney was not cross-examined. I accept that evidence.

6. Mr. Rice swore that he required the same type face for the word "Riceys" as for the other words in order to have the combination in the same type face, and without thought to the similarity of the type face he had chosen to that in which the applicant printed the word "Regency".

7. A few days before the formal opening of the respondent's new premises Mr. Mrocki saw the word Riceys prominently displayed on those premises and expressed his concern to Mr. Rice that the word, in Harlow Solid, would mislead people into thinking that the business thus identified was the applicant's business, they failing to remember the differences between Regency and Riceys and being thus misled by the visual similarity of the two words. Mr. Rice agreed in evidence that that concern was expressed, but denied that his response was at all to the effect alleged in evidence by Mr. Mrocki. Mr. Rice swore that he told Mr. Mrocki that no such a mistake would be induced and he further swore that for a time Mr. Mrocki appeared to abandon his complaint. Mr. Rice swore that the conversation on that topic concluded when Mr. Mrocki said that as long as the respondent bought shower screens from the applicant he would be content. Mr. Mrocki on the other hand swore that he at all times maintained his objection, and that Mr. Rice responded to that objection by declaring that he wanted to copy the look and style of the business carried on by the applicant, and by suggesting that the success of the respondent's business would benefit the applicant by increasing the respondent's requirement of the applicant's products. A few days later Mr. Leon Mroki, another director of the applicant, and Mr. Rice had a conversation in which Mr. Leon Mroki expressed the same concern and swore that Mr. Rice's response was substantially as it had been to Mr. Harry Mroki. Mr. Rice swore that that had not been his response.

8. I am not persuaded that Mr. Rice at any time believed that potential customers would be misled, into approaching his premises or his employees under the impression that they would be dealing with the entity which traded under the name "Regency", by a mistaken identification of the word "Riceys" as the name of that entity. On the contradictory evidence as to the conversations I am unable to find on the balance of probability that the versions given by Harry and Leon Mroki are to be preferred to those of Mr. Rice. Not being persuaded of an intention on the part of a respondent to deceive, I have not that aid to an inferred finding that deception will result which that intention has been said to provide. (See Telmak Teleproducts (Australia) Pty. Ltd. v. Coles Myer Ltd. (1988) 84 ALR 437 at 444-448). Nor do I feel so confident of the obviousness of the conclusion I am hereafter to state, that the use of the respondent's name in Harlow Solid and underlined does contravene s.52 of the Trade Practices Act 1974 and constitutes a passing off, that I regard Mr. Rice as now shutting his eyes as to the reasonable consequences, upon facts known to him, of what he is doing by using that name in that way. (See Conagra Inc. v. McCain Foods (Aust.) Pty. Ltd. (1991) 33 FCR 302 at 363).

9. Mr. Mrocki did not at any time object to the respondents' use of the word "Riceys". His objection was, and is, to the use of Harlow Solid type face, and particularly in combination with the underlining of the word.

10. Upon a consideration of the two logos, as they may both be called, in the light of the evidence I have summarised, I find that the respondent's logo is likely to mislead some persons into the belief that the business of the respondent is the business of the applicant. They are within a class of persons who have seen the applicant's logo in circumstances which associate that logo with a business involving the sale of shower screens and security doors or of one of those products and who have retained a memory, albeit imperfect, of the logo and of the association between the logo and one or other or both of those products. Some of the members of that class will, as I find, be misled, by the sight of the respondent's logo, in circumstances which associate that logo with one or other or both of those products, and by their imperfect memory of the applicant's logo, into the belief that the respondent's logo is that of which they have that memory. A person whose memory includes the sound of the word "Regency" as well as a visual image will not be misled, for the sounds of "Regency" and "Riceys" are quite dissimilar. But the memory will in many instances be merely visual. The occasions are not many on which a person will contemplate the acquisition or the repair, as a consumer, of a shower screen or a security door. When the time comes for such a contemplation, a memory of a commercial entity dealing in such things in a substantial way, imprinted by substantial and repetitive advertising of the kind which the applicant has for five years deployed in Melbourne, is likely to arise in the mind and to incline the consumer to begin his exploration of the market in those things by communicating with that entity. If a potential purchaser had another or a further reason to patronise the applicant rather than another business (as for example by reason of a recommendation of the applicant or by reason of some experience of the applicant's goods or services) reasonable care of his own interests might be expected to lead him to assure himself, when he saw the word "Riceys", that that was the logo of the business which he had that reason to patronise. But the person who merely seeks to deal with, or to approach first, a supplier in a substantial way of business could not in my opinion be regarded as failing to take reasonable care of his own interests if he failed to search his memory critically to assure himself that in the respondent's logo he had found the mark of such a supplier. Many such a person would act, without any anxious reflection, on the mistaken impression conveyed by the visual similarities of the two logos, as I find. If the similarities initially induced not a mistake, but a wondering whether what was seen (the respondent's logo) was the logo of which the mind of the observer carried an imperfect memory (the applicant's logo), it might be said that in failing to resolve the doubt thus induced the observer had failed to take reasonable care of his own interests. My finding is that a not insignificant number of persons would make the mistake and be untroubled by a doubt. Lawyers and others much given to reading might be a very small proportion of that number. But there are many literate persons whose attention to the written word is cursory. My conclusion is that the use by the respondent of his logo is conduct likely to deceive and mislead, within s.52 of the Trade Practices Act 1974, and that use constitutes also a passing-off of the respondent's business as that of the applicant.

11. Use of the word "Riceys" or "Ricey's" in Harlow Solid type or any type closely resembling that type will be enjoined. The proceeding will be adjourned for consideration of the orders to be made after the parties' advisers have had an opportunity to consider these reasons for judgment.