McD Asia Pacific LLC v Hungry Jack's Pty Ltd
[2023] FCA 1412
•16 November 2023
FEDERAL COURT OF AUSTRALIA
McD Asia Pacific LLC v Hungry Jack’s Pty Ltd [2023] FCA 1412
File number(s): NSD 967 of 2020 Judgment of: BURLEY J Date of judgment: 16 November 2023 Catchwords: TRADE MARKS – infringement – Trade Marks Act 1995 (Cth) s 120 – deceptive similarity – consideration of intention to mislead or deceive – infringement not established.
TRADE MARKS – application for cancellation of trade mark registration – Trade Marks Act 1995 (Cth) ss 44, 60 and 88 – no ground for cancellation established.
TRADE MARKS – cross-claim for removal of trade mark from the Register for non-use – Trade Marks Act 1995 (Cth) s 92(4)(b) – consideration of discretion under s 101(3) to permit mark to remain registered in respect of certain goods.
CONSUMER LAW – misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law – whether representation as to comparative weight of meat product misleading or deceptive – contravention established.
Legislation: Competition and Consumer Act 2010 (Cth) Schedule 2, s 18
Trade Marks Act 1995 (Cth) ss 44, 44(1), 60, 62A, 88, 88(1)(a), 88(2)(a), 88(2)(c), 92(4), 92(4)(b), 100(1), 101(3), 120, 120(1), 120(2), 122(1)(e)
Federal Court Rules 2011 (Cth) r 34.50(2)(b)
Cases cited: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2011] FCA 1254
Australian Woollen Mills Limited v FS Walton & Co Ltd [1937] HCA 51; (1937) 58 CLR 641
Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592
Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12; (2000) 202 CLR 45
Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd [1952] HCA 15; (1952) 86 CLR 536
Delfi Chocolate Manufacturing S.A. v Mars Australia Pty Ltd [2015] FCA 1065; (2015) 115 IPR 82
Global Sportsman Pty Ltd v Mirror Newspapers Ltd [1984] FCA 167; (1984) 2 FCR 82
Hashtag Burgers Pty Ltd v In-N-Out Burgers, Inc [2020] FCAFC 235; (2020) 385 ALR 514
Health World Ltd v Shin-Sun Australia [2010] HCA 13; (2010) 240 CLR 590
Johnson & Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited [1991] FCA 402; 30 FCR 326
Jones v Dunkel [1959] HCA 9; (1959) 101 CLR 298
Mark Foy’s v Davies Co-op Ltd [1956] HCA 41; (1956) 95 CLR 190
MID SydneyPty Ltd v Australian Tourism Co Ltd [1998] FCA 1616; (1998) 90 FCR 236
National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90; (2004) 61 IPR 420
New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd [1989] FCA 124; (1989) 86 ALR 549
PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2021] FCAFC 128; (2021) 285 FCR 598
Peter Bodum A/S v DKSH Australia Pty Ltd [2011] FCAFC 98; (2011) 280 ALR 639
Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83; (2017) 251 FCR 379
Pioneer Computers Australia Pty Ltd v Pioneer KK [2009] FCA 135; (2009) 176 FCR 300
Qantas Airways Limited v Edwards [2016] FCA 729; (2016) 338 ALR 134
Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020; (1999) 93 FCR 365
Rodney Jane Racing Pty Ltd v Monster Energy Company [2019] FCA 923; (2019) 370 ALR 140
S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd [1998] FCA 1463; (1998) 168 ALR 396
SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1821; (1999) 169 ALR 1
Saville Perfumery Ltd v June Perfect Ltd (1939) 58 RPC 141
Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; (2023) 408 ALR 195
Singtel Optus Pty Limited v Optum Inc [2018] FCA 575; (2018) 140 IPR 1
Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd [1954] HCA 82; (1953) 91 CLR 592
The Agency Group Australia Limited v H.A.S. Real Estate Pty Ltd [2023] FCA 482
The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407
Trident Seafoods Corp v Trident Foods Pty Ltd [2019] FCAFC 100; (2019) 143 IPR 1
Unilever Aust Ltd v Karounos [2001] FCA 1132; (2001) 113 FCR 322
Wingate Marketing Pty Ltd v Levi Strauss & Co [1994] FCA 163; (1994) 49 FCR 89
Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; (2001) 107 FCR 166
Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Trade Marks Number of paragraphs: 219 Date of last submission/s: 4 May 2023 Date of hearing: 5 – 8 December 2022 Counsel for the Applicants: Mr C Dimitriadis SC with Ms E Whitby Solicitor for the Applicants: Spruson & Ferguson Lawyers Counsel for the Respondent: Ms S Goddard SC with Ms B Oliak Solicitor for the Respondent: Addisons Lawyers ORDERS
NSD 967 of 2020 BETWEEN: MCD ASIA PACIFIC LLC
First Applicant
MCDONALD'S AUSTRALIA LIMITED
Second Applicant
AND: HUNGRY JACK'S PTY LTD
Respondent
AND BETWEEN: HUNGRY JACK'S PTY LTD
Cross-Claimant
AND: MCD ASIA PACIFIC LLC
Cross-Respondent
ORDER MADE BY:
BURLEY J
DATE OF ORDER:
16 NOVEMBER 2023
THE COURT ORDERS THAT:
1.The parties confer and supply to the chambers of Justice Burley by 4pm on 7 December 2023 draft short minutes of order giving effect to these reasons and a proposed timetable for the resolution of any further matters for determination, including costs.
2.Insofar as the parties are unable to agree to the terms of the draft short minutes of order referred to in Order 1, the areas of disagreement be set out in mark-up.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
1 INTRODUCTION
[1]
1.1 The proceedings
[1]
1.2 The Registered Trade Marks
[8]
1.3 Summary of conclusions
[11]
2 THE WITNESSES
[13]
2.1 McDonald’s
[13]
2.2 Hungry Jack’s
[19]
3 TRADE MARK INFRINGEMENT CASE
[23]
3.1 Introduction
[23]
3.2 Law regarding deceptive similarity
[31]
3.3 The use of BIG JACK and MEGA JACK
[60]
3.4 The evidence of Mr Baird
[71]
3.5 The deceptive similarity arguments
[83]
3.6 Consideration of deceptive similarity
[93]
3.6.1 Introduction
[93]
3.6.2 BIG JACK and BIG MAC
[95]
3.6.3 Intention
[109]
3.6.4 MEGA JACK and MEGA MAC
[118]
4 THE VALIDITY CHALLENGE TO THE BIG JACK MARK
[128]
4.1 Introduction
[128]
4.2 The section 44 challenge
[134]
4.3 The section 60 challenge
[139]
4.4 The section 88 challenge
[149]
4.5 Conclusion in relation to the challenge to the BIG JACK registration
[151]
5 CROSS CLAIM FOR REMOVAL OF MEGA MAC
[152]
5.1 Introduction
[152]
5.2 The evidence of use - hamburgers
[158]
5.3 Discretion in relation to non-hamburger goods
[173]
6 THE ACL CLAIM – “25% MORE AUSSIE BEEF”
[182]
6.1 Introduction
[182]
6.2 The representation made
[189]
6.2.1 The submissions
[189]
6.2.2 The relevant law
[192]
6.2.3 Consideration of the 25% more Aussie beef representation
[198]
6.3 The evidence of the weight of the meat
[208]
7 CONCLUSION
[218]
BURLEY J:
1. INTRODUCTION
1.1 The proceedings
This is a dispute about trade marks, misleading or deceptive conduct and hamburgers.
The applicants are McD Asia Pacific LLC and McDonald’s Australia Limited (collectively, McDonald’s). They are respectively the licensor and authorised user of the branding associated with the McDonald’s chain of quick service restaurants which first opened in Australia in 1971 and by 2020 had over 890 outlets operating in Australia. As at 2020, McDonald’s and its various affiliated franchisees and licensees operated over 35,000 McDonald’s restaurants in over 100 countries and territories around the world. The BIG MAC hamburger was first sold in the United States of America in 1968 and has been sold in Australia since operations commenced here. McD Asia is the registered owner of trade marks for the words BIG MAC and MEGA MAC.
The respondent is Hungry Jack’s Pty Ltd. It is a franchisee of Burger King Corporation, a United States entity, and trades under the name HUNGRY JACK’S and associated branding. It is a competitor of McDonald’s in the quick service restaurant business, in Australia and worldwide, and has also operated in Australia since 1971. In early 2020, Hungry Jack’s began to sell hamburgers by reference to the names BIG JACK and MEGA JACK.
McDonald’s contends that:
(a)Hungry Jack’s has infringed its BIG MAC and MEGA MAC trade marks in breach of s 120 of the Trade Marks Act 1995 (Cth) by using the signs BIG JACK and MEGA JACK in relation to its hamburgers;
(b)orders should be made for the removal from the Trade Marks Register of Hungry Jack’s BIG JACK trade mark; and
(c)Hungry Jack’s has misrepresented to consumers that its BIG JACK hamburger contains 25% more Aussie beef than the BIG MAC hamburger (the 25% more Aussie beef representation) in breach of the provisions of the Australian Consumer Law (ACL) (Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL claim).
Hungry Jack’s denies that it has infringed McDonald’s’ trade marks and contends that its BIG JACK mark should remain on the Register, the consequence of which is that it has a complete defence to the infringement allegation pursuant to s 122(1)(e) of the Trade Marks Act. Hungry Jack’s contends in its cross-claim that McDonald’s’ MEGA MAC trade mark should be removed from the Register for non-use pursuant to s 92(4)(b) of the Trade Marks Act. It also contends that the 25% more Aussie beef representation is correct and that the ACL claim must be dismissed.
A significant issue in the case is whether or not the impugned Hungry Jack’s trade marks are deceptively similar to the McDonald’s trade marks as prescribed by ss 10 and 120 of the Trade Marks Act. At the time of the hearing, one relevant issue was the extent to which the reputation is relevant to such an enquiry. That question was then pending for decision by the High Court and the parties submitted that the decision in the present case should await that decision. Judgment in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; (2023) 408 ALR 195 was later delivered and the parties have subsequently made written submissions as to its effect, which I have taken into account in these reasons.
By orders made on 19 March 2021, issues of loss and damage and quantum of the pecuniary relief sought were to be heard and determined after and separately from all other issues in the proceeding. Accordingly, this judgment addresses only questions of liability.
1.2 The Registered Trade Marks
McD Asia is the registered owner of two registrations for the words BIG MAC, being trade mark Nos 271329 and 271330, both of which were filed on 14 August 1973. The first is in respect of goods in class 29 and the second is in respect of goods in class 30. The goods relevant to the infringement case are emphasised in bold:
Class 29: Meat, poultry and game, including hamburger patties, meat extracts; preserved, dried and cooked fruits and vegetables, eggs, milk and other dairy products; edible oils and fats, preserves, pickles
Class 30: Hamburgers; coffee, tea, cocoa, rice, coffee substitutes; flour and preparations made from cereals; bread, biscuits; yeast, baking powder; salt, mustard, pepper, vinegar, sauces, spices
McD Asia is also the owner of trade mark No 1539657 for the words MEGA MAC filed on 7 February 2013 in class 30 for:
Edible sandwiches, meat sandwiches, pork sandwiches, fish sandwiches, chicken sandwiches, biscuits, bread, cakes, cookies, chocolate, coffee, coffee substitutes, tea, mustard, oatmeal, pastries, sauces, seasonings, sugar
Hungry Jack’s is the registered owner of trade mark No 2050899 for BIG JACK, filed on 14 November 2019, in respect of the following goods:
Class 29: Hamburgers and burgers; meat burgers; vegetable burgers; cheese burgers; hamburger patties; meat, poultry, fish and game; meat extracts; sausages; meat products; chicken products; prepared vegetable products; chicken nuggets; fried chicken; grilled meat; sandwich fillings, being meat or cheese based; preserved, frozen, dried and cooked fruits and vegetables; potato chips; vegetable salads; fruit chips; fruit salads; pickles prepared from fruits and vegetables; potato and onion products included in this class; vegetable patties; eggs, milk and milk products including milk shakes and malted milks; beverages having a milk base; beverages made from yoghurt; fruit flavoured beverages having a milk base; preserves, pickles and relishes; jams, jellies
Class 30: Hamburgers and burgers (sandwich with filling); steak sandwiches and sandwiches; preparations made from bread; sandwiches containing meat including steak and hamburgers; steaks and burgers contained in bread rolls; hamburgers in buns; bread buns; foodstuffs made from cereals, corn, dough, farinaceous products, maize, oats, rice, sugar or flour; beverages made from cereals, chocolate, cocoa, coffee or tea; bread; biscuits; pastries; cakes; confectionery; prepared desserts (chocolate based); prepared desserts (confectionery); prepared desserts (pastries); flavoured toppings for desserts; salts included in this class, pepper, mustard, sauces, spices, vinegar, sauces (condiments); baking powder, yeast; salad dressings; fruit sauces, relishes; coffee, tea, cocoa, coffee substitutes; sugar; ices; sandwiches containing cheese
1.3 Summary of conclusions
For the reasons set out below, I have concluded that:
(a)BIG JACK is not deceptively similar to BIG MAC within s 120 of the Trade Marks Act;
(b)MEGA JACK is not deceptively similar to MEGA MAC within s 120 of the Trade Marks Act;
(c)As a consequence of (a) and (b), McDonald’s has not established that the impugned use of the Hungry Jack’s trade marks infringes its registered trade marks;
(d)The Hungry Jack’s BIG JACK mark is not liable to be removed from the Register pursuant to any of ss 44, 60 or 88 of the Trade Marks Act, as a result of which Hungry Jack’s has an additional defence to the infringement allegation pursuant to s 122(1)(e) of the Trade Marks Act;
(e)The McDonald’s MEGA MAC mark is not liable to be removed from the Register for non-use, save that the registration should be amended to remove the following goods: biscuits, cakes, cookies, chocolate, coffee, coffee substitutes, tea, mustard, oatmeal, pastries, sauces, seasonings, sugar;
(f)Hungry Jack’s has engaged in misleading or deceptive conduct in breach of s 18 of the ACL by making the 25% more Aussie Beef representation.
I will make orders requiring the parties to provide short minutes of order giving effect to these reasons and addressing any residual issues, including costs.
2. THE WITNESSES
2.1 McDonald’s
Tim Kenward has been Marketing Manager of McDonald’s Australia since July 2017. He has been associated with McDonald’s Australia since 2011, when he worked as a marketing consultant to the company from January 2011 until November 2012. He was then appointed National Brand Manager and, in 2015, Senior Brand Manager before being appointed to his present position.
Mr Kenward provided three affidavits. In his first he gives evidence about: McDonald’s business and trade marks; the BIG MAC hamburger; the BIG MAC Tagline “two all-beef patties, special sauce, lettuce, cheese, pickles, onions – on a sesame seed bun”; the BIG MAC build, being the club sandwich styled three tiered sesame seed bun with two beef patties; the MEGA MAC hamburger; and Hungry Jack’s activities which led to the commencement of these proceedings. In his second affidavit he responds to the affidavit of Scott Baird. In his third affidavit he provides supplementary evidence to his first affidavit in response to some objections taken to his first affidavit concerning the use by McDonald’s of the BIG MAC and MEGA MAC marks. Mr Kenward was cross examined.
Amandeep Dhanju has since January 2022 been Head of Business Insights and Analytics at McDonald’s Australia. She has a Bachelor of Science degree majoring in mathematics and computer sciences and has worked in the field of data analytics since 2007. Her current role is to lead a team providing advice on sales information about the performance of McDonald’s products, including providing regular reports and campaign analysis, including historical data analysis to management. Ms Dhanju explained the process of extracting data from McDonald’s’ records for the preparation of spreadsheets relied upon for the purpose of demonstrating use of the MEGA MAC mark. She was not cross examined.
Scott Balshaw is Systems Co-ordinator of Agrifood Technology in Victoria, a position he has held since 2013. He commenced working for Agrifood in 1992 as an analyst in the food safety laboratory. Mr Balshaw was provided with a test protocol for use in the conduct of tests to weigh BIG MAC and BIG JACK hamburger meat patties and conducted tests on 14 July 2021 in support of the ACL claim. He describes the testing that he carried out on patties acquired from 10 Hungry Jack’s restaurants and 10 McDonald’s restaurants located in Melbourne and reports on the results. Mr Balshaw was cross examined.
Ruma Prestney is Team Leader at Agrifood. She holds a PhD in analytical chemistry. Dr Prestney provided two affidavits. In her first affidavit, she gives evidence of testing that she conducted on various BIG MAC and BIG JACK hamburgers acquired from 20 locations in Brisbane to ascertain their weight. She reports on her results. In her second affidavit, Dr Prestney gives evidence of further testing that she conducted on 13 June 2021 in accordance with a protocol emailed to her by the solicitors engaged by McDonald’s, Spruson & Ferguson Lawyers Pty Ltd (SFL), and reports on the results. Dr Prestney was cross examined.
Lucy Hartland is a solicitor in the employ of SFL. Ms Hartland provided two affidavits. In her first affidavit, she exhibits correspondence with the solicitors representing Hungry Jack’s (Addisons), the trade marks in suit, and screen shots and reproductions of the impugned advertisements released by Hungry Jack’s. In her second affidavit, she annexes the results of searches of the Register for certain trade marks. Ms Hartland was not cross examined.
2.2 Hungry Jack’s
Scott Baird has since January 2015 been the Chief Marketing Officer of the respondent. He reports to the Chief Executive Officer of Hungry Jack’s. He gives evidence of the history of Hungry Jack’s in Australia and its position as a franchisee of Burger King. He explains that when Hungry Jack’s commenced operations in Australia it could not adopt the name BURGER KING because of trade mark issues with a third party and so elected to trade under the HUNGRY JACK’S trade mark, which had been registered in Australia since 1963. He gives evidence about the Hungry Jack’s outlets in Australia and the development of the BIG JACK and MEGA JACK hamburgers. Mr Baird was cross-examined.
Jennifer Jin is a primary school teacher who had been employed at McDonald’s on a casual basis from 2014 until 2016. She gives evidence about her experience of cooking hamburgers at McDonald’s and aspects of nomenclature. She was not cross examined.
Justine Munsie is a solicitor in the employ of Addisons, who represent Hungry Jack’s. She exhibits the results of various trade mark searches and gives evidence about how various restaurants promote the sale of meat products by reference to weight. She was not cross examined.
Brodie Campbell is a solicitor in the employ of Addisons. He gives evidence of the steps he took to make online purchases of Hungry Jack’s and McDonald’s hamburgers and exhibits screenshots from various websites and packaging. He was not cross examined.
3. TRADE MARK INFRINGEMENT CASE
3.1 Introduction
Although its pleaded case is broader, in closing submissions McDonald’s infringement case was confined to reliance on s 120(1) of the Trade Marks Act.
Section 120(1) and (2) provide (notes omitted):
120When is a registered trade mark infringed?
(1)A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
(2)A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(a)goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or
(b)services that are closely related to registered goods; or
(c)services of the same description as that of services (registered services) in respect of which the trade mark is registered; or
(d)goods that are closely related to registered services.
However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.
McDonald’s alleges that its trade marks have been infringed in two ways.
First, it contends that Hungry Jack’s’ use of the words BIG JACK involves infringement of its registered trade marks for BIG MAC. In refining its case in its closing submissions, McDonald’s submits that its registered trade mark No 271330 for BIG MAC for “hamburgers” in class 30 has been infringed by Hungry Jack’s’ use of the BIG JACK name because it is a sign that is deceptively similar to the BIG MAC mark.
Secondly, it contends that Hungry Jack’s’ use of the words MEGA JACK involves infringement of its registered trade mark No 1539657 for MEGA MAC for “edible sandwiches, meat sandwiches” in class 30 because it is a sign that is deceptively similar to the MEGA MAC mark.
McDonald’s pleads that Hungry Jack’s deliberately adopted the BIG JACK and MEGA JACK marks for the purpose of promoting in the mind of consumers a connection or affiliation between BIG MAC and MEGA MAC hamburgers and those (respectively) marked BIG JACK and MEGA MAC. Hungry Jack’s denies this allegation.
Hungry Jack’s does not dispute that its use of the impugned marks is use “as a trade mark” in relation to the sale of hamburgers or that those goods are “goods or services in respect of which the trade mark is registered” within s 120(1). As a consequence, the only relevant issue for determination is whether or not the impugned signs are deceptively similar to the McDonald’s trade marks.
The term “deceptively similar” is defined in section 10 of the Trade Marks Act:
For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.
3.2 Law regarding deceptive similarity
In Australian Woollen Mills Limited v FS Walton & Co Ltd [1937] HCA 51; (1937) 58 CLR 641 at 658, Dixon and McTiernan JJ described the test for deceptive similarity as follows:
But, in the end, it becomes a question of fact for the court to decide whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained.
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 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.
Their Honours emphasised that the determination for the court is one of estimation and evaluation (at 659):
The main issue in the present case is a question never susceptible of much discussion. It depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs.
The summary provided by Windeyer J in The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407 at 415 (Shell Oil) also encapsulates the approach required by s 120(1):
On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant’s television exhibitions.
In Hashtag Burgers Pty Ltd v In-N-Out Burgers, Inc [2020] FCAFC 235; (2020) 385 ALR 514 (Nicholas, Yates and Burley JJ), the Full Court noted at [64] that the distinction between consideration of whether one mark is deceptively similar to another, rather than substantially identical, lies in the point of emphasis on the impression or recollection which is carried away and retained of the registered mark, when conducting the comparison. In this context, the Full Court said:
…allowance must be made for the human frailty of imperfect recollection. In New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd [1989] FCA 124; 86 ALR 549, in a passage in his judgment not affected by the proceedings on appeal, Gummow J said at 589:
In determining whether MOO is deceptively similar to MOOVE, the impression based on recollection (which may be imperfect) of the mark MOOVE that persons of ordinary intelligence and memory would have, is compared with the impression such persons would get from MOO; the deceptiveness flows not only from the degree of similarity itself between the marks, but also from the effect of that similarity considered in relation to the circumstances of the goods, the prospective purchasers and the market covered by the monopoly attached to the registered trade mark: Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414–15; Polaroid Corp v Sole N Pty Ltd [1981] 1 NSWLR 491 at 498. The latter case is also authority (at 497) for the proposition that the essential comparison in an infringement suit remains one between the marks involved, and that the court is not looking to the totality of the conduct of the defendant in the same way as in a passing off suit.
This passage was approved by the Full Court in C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539; 52 IPR 42 (Ryan, Branson, Lehane JJ) at [44].
In Self Care, the High Court summarised the position as follows (citations omitted):
[28]The question to be asked under s 120(1) is artificial – it is an objective question based on a construct. The focus is upon the effect or impression produced on the mind of potential customers. The buyer posited by the test is notional (or hypothetical), although having characteristics of an actual group of people. The notional buyer is understood by reference to the nature and kind of customer who would be likely to buy the goods covered by the registration. However, the notional buyer is a person with no knowledge about any actual use of the registered mark, the actual business of the owner of the registered mark, the goods the owner produces, any acquired distinctiveness arising from the use of the mark prior to filing or, as will be seen, any reputation associated with the registered mark.
[29]The issue is not abstract similarity, but deceptive similarity. The marks are not to be looked at side by side. Instead, the notional buyer's imperfect recollection of the registered mark lies at the centre of the test for deceptive similarity. The test assumes that the notional buyer has an imperfect recollection of the mark as registered. The notional buyer is assumed to have seen the registered mark used in relation to the full range of goods to which the registration extends. The correct approach is to compare the impression (allowing for imperfect recollection) that the notional buyer would have of the registered mark (as notionally used on all of the goods covered by the registration), with the impression that the notional buyer would have of the alleged infringer's mark (as actually used). As has been explained by the Full Federal Court, "[t]hat degree of artificiality can be justified on the ground that it is necessary in order to provide protection to the proprietor's statutory monopoly to its full extent".
(Emphasis added.)
Deceptive similarity must be assessed on the basis of whether there is a real, tangible danger of deception or confusion occurring. It is enough if the notional buyer would entertain a reasonable doubt as to whether, due to the resemblance between the marks, the two products come from the same source; Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd [1954] HCA 82; (1953) 91 CLR 592 at 595; Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020; (1999) 93 FCR 365 at [50]; Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45 at [83]. As the High Court noted in Self Care at [32], there must be “a real likelihood that some people will wonder or be left in doubt about whether the two sets of products… come from the same source”.
The question of intention to deceive or cause confusion is material to the present case. In this regard, the leading authority is again the decision of Dixon and McTiernan JJ in Australian Woollen Mills at 657:
The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive.
As this passage makes clear, the question of whether or not an infringing use was intentional is but one factor for the court to take into account in determining whether there is a reasonable probability of deception or confusion; Self Care [30]; Hashtag Burgers at [67] – [68].
In resolving a long-standing controversy on the subject, the High Court determined in Self Care that reputation based on actual use of the registered trade mark should not be taken into account when assessing deceptive similarity under s 120(1); Self Care at [3], [36], [46], [47], [51]. That conclusion was explained by reference to the fact that it is the registration of a mark in respect of particular goods or services that confers monopoly rights on the registered owner, and the scope of that right is not to be varied by reference to inherently uncertain notions concerning whether or not the user of the mark has developed a reputation in it, which notions were antithetical to the type of certainty that the Register was designed to nurture; Self Care [37] – [40], [48]. For that reason, the Court explained at [49] that it is impermissible to attribute to the notional buyer any familiarity with the actual use of a registered trade mark:
…The inquiry under s 120(1) is directed to avoiding deception and confusion between trade marks, and protecting the registered owner's trade mark rights in relation to the particular goods covered by the registration. It is not concerned with and does not seek to protect "the commercial value or 'selling power' of a mark"
However, the reasoning in Self Care has ignited a further dispute between the parties concerning what the High Court meant in the passage at [29], as emphasised above at [35], (and elsewhere) by its reference to “actual use” on the part of the alleged infringer.
In its supplementary submissions, Hungry Jack’s contends that the High Court made it clear that deceptive similarity for the purpose of s 120(1) infringement analysis is to be assessed in the context of the respondent’s actual use of the accused mark, including usage of other aspects of packaging. It disputes the submission advanced by McDonald’s to the effect that particular or idiosyncratic circumstances surrounding the alleged infringer’s use are not relevant. By emphasizing “actual use”, Hungry Jack’s submits that the High Court conveyed that idiosyncratic circumstances of a particular respondent’s use are to be taken into account. Hungry Jack’s submits that the Court should now consider such matters as the presence of the Hungry Jack’s trade marks and livery on its restaurants. In this regard, it submits that Self Care has the effect of expanding the inquiry beyond that envisaged in earlier authority, because not only are generalised trade circumstances to be taken into account, what were previously considered to be (and Hungry Jack’s accepted were, prior to the decision in Self Care) extraneous and irrelevant matters such as the presence of other trade marks used on or in relation to the goods, are now to be taken into account. It relies in this respect on the High Court’s treatment of the facts in Self Care to demonstrate how the comparison should be made.
For the following reasons, I am unable to accept that submission.
In Self Care at [29], [33] it is apparent that the Court was referring to the actual use of the impugned trade mark in the sense of the use of the impugned sign alone, rather than the broader context of use. The Court was contrasting that use in fact (of the impugned mark) with the notional use of the registered mark on goods within the class of registration. That is the comparison that has long been established by the authorities. Several matters lead me to this view.
First, the focal point of the High Court’s consideration was on the relevance of reputation within the statutory test for deceptive similarity under s 120(1). In reaching its conclusions on that subject, the Court provided a succinct review of about a century of law on the subject of deceptive similarity, addressing briefly topics that have been the subject of detailed consideration by other Courts. It would be surprising if the Court intended to overrule or change well-established principle in the manner contended without addressing it squarely and in such short form. The better view is that it did not do so.
Secondly, the three cases cited in support of the proposition made in [29] were Shell Oil at 415, WingateMarketing Pty Ltd v Levi Strauss & Co [1994] FCA 163; (1994) 49 FCR 89 at 128 and MID SydneyPty Ltd v Australian Tourism Co Ltd [1998] FCA 1616; (1998) 90 FCR 236 at 245. Examination of those cases, and the passages cited, demonstrate the context of the reference to “actual use”.
A passage from Shell Oil (Windeyer J) at 415 is set out above. That familiar case concerned a dispute between two well-known companies that sold petrol and oils about whether Shell had infringed Esso’s trade mark for a “humanized oil drop” (described as the “Esso oil-drop man”) in a television commercial. The novelty of the case at the time arose because before that date (1961), moving images in a film had not been found to constitute trade mark infringement. The two short commercials displayed an animated oil drop man. Windeyer J found the man not to be substantially identical with the Esso oil drop man mark but that he was deceptively similar to it, reciting the legal test at 415 which is set out above at [33]. Significantly, in both of the impugned animations it was clear from the voiceover and the word SHELL appearing on the animated oil drop that the oil drop man was associated with Shell, not Esso. Nevertheless, the comparison of the “actual use” of the mark led Windeyer J to the conclusion that the impugned Shell oil drop man was deceptively similar to Esso’s trade mark. The presence of what might be said to amount to disclaimers of any connection with Esso was not relevant.
It is in this context that reference to the comparison of the impression based on recollection of the registered trade mark and “the impressions that such persons would get from the defendant’s television exhibitions” must be understood. Windeyer J was not, in referring to use of the impugned mark, implicitly including the application by the defendant of the word “SHELL” in connection with the animated figure. The only “actual use” was the use of the impugned mark.
In MID Sydney, Burchett, Sackville and Lehane JJ similarly observed at 245 that it is irrelevant that the respondent may “by means other than its use of the mark, make it clear that there is no connection between its business and that of MID”, citing the established position set out in Mark Foy’s v Davies Co-op Ltd [1956] HCA 41; (1956) 95 CLR 190 at 205 where Williams J (Dixon CJ agreeing) adopted the following statement of Lord Greene MR in Saville Perfumery Ltd v June Perfect Ltd (1939) 58 RPC 141 at 161:
In an infringement action, once it is found that the defendants mark is used as a trade mark, the fact that he makes it clear that the commercial origin of the goods indicated by the trade mark is some business other than that of the plaintiff avails him nothing, since infringement consists in using the mark as a trade mark, that is, as indicating origin.
In Wingate Marketing at 128, Gummow J addressed the comparison for the purposes of deceptive similarity, noting that it must be between the mark registered on the one hand “and the mark as used by the defendant on the other”. However, this cannot be taken to refer to aspects of the defendant’s use beyond the impugned mark itself. The reason for this was explained by his Honour in the passage that followed at pages 128 – 129:
(i) The comparison is between any normal use of the plaintiff’s mark comprised within the registration and that which the defendant actually does in the advertisements or on the goods in respect of which there is the alleged infringement, but ignoring any matter added to the allegedly infringing trade mark; for this reason disclaimers are to be disregarded,…(ii) However, evidence of trade usage in the sense discussed above, is admissible but not so as to cut across the central importance of proposition (i)…
(Emphasis added.)
Thirdly, the approach taken by Hungry Jack’s, in my view, is contrary to a correct reading of Self Care, where the Court said at [33] (footnotes included):
In considering the likelihood of confusion or deception, "the court is not looking to the totality of the conduct of the defendant in the same way as in a passing off suit"81. In addition to the degree of similarity between the marks, the assessment takes account of the effect of that similarity considered in relation to the alleged infringer's actual use of the mark82, as well as the circumstances of the goods, the character of the likely customers, and the market covered by the monopoly attached to the registered trade mark83. Consideration of the context of those surrounding circumstances does not "open the door" for examination of the actual use of the registered mark, or, as will be explained, any consideration of the reputation associated with the mark84.
(Italics in original. Emboldening added.)
The reference in the second sentence to “actual use of the mark” is again a limited reference to the impugned mark itself, not surrounding marks or disclaimers. This is apparent from the first sentence which in footnote 81 refers to the passage in New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd [1989] FCA 124; (1989) 86 ALR 549 at 589, which I have set out above at [34]. It is clear that the Court is here reciting long-established authority that the whole of the conduct of the respondent is not taken into account when considering deceptive similarity. Footnote 82 repeats the citations identified in [29] which I have reviewed in relation to the second point above. It is plain that the High Court continues to focus on the “actual use” only of the respondent’s mark, not on the actual surrounding circumstances, which may include disclaimers or other marks. The relevant “surrounding circumstances” are confined to consideration of the way in which goods of the relevant kind are typically bought and sold.
Fourthly, Hungry Jack’s relies on passages in the High Court’s reasoning where it applies the facts. In that case the relevant question was whether PROTOX was deceptively similar to the registered trade mark BOTOX.
The Court said:
[69]Allergan was correct to submit that, as the Full Court accepted, there are visual and aural similarities between the two marks. The word PROTOX uses two short consonants, "p" and "r", to make the syllable "pro", which is visually and aurally similar to "bo"; both "pro" and "bo" are "sounded through the lips together"; and the word "otox" is "distinctive and identical" between PROTOX and BOTOX and is an "identical rhyme". But, as the Full Court correctly said, "[c]onsumers would not have confused PROTOX for BOTOX". The words are sufficiently different that the notional buyer, allowing for an imperfect recollection of BOTOX, would not confuse the marks or the products they denote. The visual and aural similarities were just one part of the inquiry.
[70]The question, then, was whether these similarities "imply an association" so that the notional buyer would be caused to wonder whether it might not be the case that the products come from the same source. The alleged deceptiveness was said to flow not only from the degree of similarity itself, but also from its effect considered in relation to the circumstances of the goods and the prospective purchaser and the market covered by the monopoly – anti-wrinkle creams in class 3. It is to be assumed that the products would be sold in similar trade outlets, including pharmacies, as well as through websites. The notional buyer has a recollection of the BOTOX mark being used on anti-wrinkle creams in class 3 in that context. The notional buyer sees the PROTOX mark used on a similar product – a serum which is advertised on its packaging and website to "prolong the look of Botox®". While the reputation of BOTOX cannot be considered, the relevant context includes the circumstances of the actual use of PROTOX by Self Care. "[P]rolong the look of Botox®" may suggest that Protox is a complementary product. However, as was observed by the primary judge, "it will be the common experience of consumers that one trader's product can be used to enhance another trader's product without there being any suggestion of affiliation".136 In this case, the back of the packaging stated in small font that "Botox is a registered trademark of Allergan Inc" and, although the assumption is that Botox is an anti-wrinkle cream, the website stated that "PROTOX has no association with any anti-wrinkle injection brand".
[71]Applying the applicable principles,137 there is no real risk of confusion or deception such that the notional buyer will be caused to wonder whether it might be that the products come from the same source. What is required is a "real, tangible danger" of confusion or deception occurring.138 As explained, the marks are sufficiently distinctive such that there is no real danger that the notional buyer would confuse the marks or products. The similarities between the marks, considered in the circumstances, are not such that the notional buyer nevertheless is likely to wonder whether the products come from the same trade source. That conclusion is reinforced by the fact that the PROTOX mark was "almost always used in proximity to the FREEZEFRAME mark" and that there was "no evidence of actual confusion".
Hungry Jacks relies on these paragraphs to support the contention that Self Care should be read to endorse the concept that in considering deceptive similarity under s 120(1) it is relevant to take into account disclaimers and other features of the packaging of the defendant’s use. I do not consider that, taken in the context of the whole of the judgment, this is the correct conclusion.
The analysis at [69] is consistent with the statements of principle to which the Court earlier referred and adopted, the Court noting that the correct approach was to consider the notional use of BOTOX against the actual use of the PROTOX mark. Paragraph [70] includes parts that might suggest that the Court took into account factors that went beyond a comparison of the marks and had regard to extraneous features of the packaging. However, [71] commences with the statement that the Court is applying the “applicable principles”, cross-referencing (as footnote 137 identifies) to [26] – [33] which endorse the long-established principles identified above. In those circumstances, it appears to me that the relevant reasoning on the facts is to be found in third and fourth sentences of [71] as follows:
…As explained, the marks are sufficiently distinctive such that there is no real danger that the notional buyer would confuse the marks or products. The similarities between the marks, considered in the circumstances, are not such that the notional buyer nevertheless is likely to wonder whether the products come from the same trade source….
That conclusion picks up the comparison of the marks identified in [69]. Having reached that conclusion, the statement that the conclusion is “reinforced” by the proximity of the impugned use to the FREEZEFRAME mark may be regarded as obiter dicta, the legal conclusion having already been provided to the effect that regardless of the presence of the FREEZEFRAME mark, the impugned mark was not deceptively similar to BOTOX. To take a different view would render significant parts of the earlier reasoning in Self Care otiose in circumstances where it is apparent that no argument before the High Court involved the contention that any of the prior cases referring to the subject were incorrectly decided, and the High Court expressly adopted those authorities.
To the extent that passages in [70] might be taken to indicate a broader view of context as part of the ratio decidendi, the aspects of packaging on the Self Care product that were emphasised in that paragraph are concerned with the proximity of the impugned PROTOX mark to the registered BOTOX® mark. That is not the situation in the present case, which may be distinguished from the conclusions reached in Self Care for that reason.
Accordingly, I do not consider that the decision of the High Court in Self Care leads to the conclusion for which Hungry Jack’s contends.
I note that in The Agency Group Australia Limited v H.A.S. Real Estate Pty Ltd [2023] FCA 482, Jackman J addressed the interpretation of Self Care. For the reasons set out above, I respectfully agree with his Honour’s observations at [56] – [59].
3.3 The use of BIG JACK and MEGA JACK
Hungry Jack’s accepts that since March 2020 it has promoted and offered for sale hamburgers under and by reference to the words BIG JACK and at about the same time started to use the words MEGA JACK in relation to a different hamburger offering. Examples of such use are set out in the evidence and appear in similar forms on the Hungry Jack’s website, in print advertising, social media platforms and television advertising:
The BIG JACK and MEGA JACK marks have been applied in Hungry Jack’s quick service restaurants. The meals offered at Hungry Jack’s outlets are comparatively low cost and service at physical outlets is swift. The purchaser selects the meal or menu item of interest and orders it at the counter. The meal is likely to be eaten more or less immediately.
The evidence indicates that Hungry Jack’s has operated such restaurants in Australia since 1971 under the brand name HUNGRY JACK’S and that there are over 400 such restaurants in Australia. The Hungry Jack’s quick service restaurants are located within food courts in shopping centres, in drive-through sites which offer eat in or take away drive-through facilities, in stand-alone stores which offer sit down service only and in co-branded sites, which are located within premises that have other branding, such as service stations (including BP, United Ampol and Shell service stations).
An example of a food court store frontage is set out below:
An example of the shop frontage of a drive-through store is as follows:
An example of a co-branded store is as follows:
Hungry Jack’s products can also be purchased through the Hungry Jack’s website and app. They can also be purchased using third party apps such as Uber Eats, Menulog and Deliveroo. Included within the options are the hamburgers identified by reference to the words BIG JACK and MEGA JACK. A typical version of the home page for the Hungry Jack’s website is as follows:
In the case of the UberEats, Menulog and Deliveroo apps the user must first select from a list of cuisines and restaurants and then select Hungry Jack’s as an option. An example is as follows:
Consumers then click through various menu options presented. Below, on the left, is an example of what appears on the Hungry Jack’s website. On the right is an example of an available selection from a third-party app, being an UberEats menu:
Various prompts are then followed to complete the transaction. Similar processes, and similar displays, appear in the various other online purchasing options available.
Whether a consumer acquires hamburgers from a restaurant (in person) or online, they are all supplied in cooked form.
3.4 The evidence of Mr Baird
The evidence of Mr Baird was relied upon by McDonald’s to support the case that Hungry Jack’s deliberately adopted the impugned trade marks for the purpose of appropriating McDonald’s’ reputation.
In his affidavit, Mr Baird gave evidence that he and those reporting to him in the Hungry Jack’s marketing team decided to offer a club-style sandwich – being a hamburger with an extra layer of bread to separate two hamburger patties – as a direct competitor product to McDonald’s’ BIG MAC, which would meet a gap in Hungry Jack’s offering. In around July 2019, he instructed Andrew McCallum, Marketing Director, and Andrew Cheong, New Product Development Manager, to develop a product in a trial market which was to adopt a 5”, club-style sandwich form, being a 5” club BIG KING hamburger. The BIG KING is a hamburger sold in Burger King outlets overseas, but not available in Australia. He gave evidence that adopting the club style made the product more distinctive within the Hungry Jack’s product range whilst the addition of two patties sandwiched between three pieces of bread mirrored other ingredients and the design of the Big King hamburger offered internationally, namely cheese melted on top of the patties, lettuce, pickles, sliced onions and a new sauce called “King Sauce”.
Mr Baird gave evidence that he did not consider that any of the trade marks available to Hungry Jack’s in Australia were suitable, and the name BIG KING as used elsewhere internationally was not, as he understood it, relevant in Australia where the HUNGRY JACK’S brand, not BURGER KING, is used. Instead, he considered that the name JACK or JACK’S would be suitable, as it would in part be a reference to the corporate branding and the name of the Hungry Jack’s founder, Jack Cowan and in part a flow-on from the chain of cafés that Hungry Jack’s had launched (attached to Hungry Jack’s restaurants) called JACK’S CAFÉ, of which there are now about 246 outlets (with 200 more planned). He gave evidence of other references to “Jack’s” or “Jacks” in limited promotional offers and internal training.
In his affidavit Mr Baird said:
I was aware that there was an element of cheekiness in naming the product BIG JACK, due to the rhyming of “Jack” and “Mac” in BIG MAC. I was aware that the name would likely be perceived as a deliberate taunt of McDonald’s. The use of cheeky “taunts” is common in overseas markets where McDonald’s and Burger King compete… Given the well-established level of competition between Hungry Jack’s and McDonald’s, together with the use of distinctive branding by both outlets, the separate trade channels operated by each of them, the common use of BIG and MEGA (as discussed below) together with Hungry Jack’s association with the name Jack, I did not consider there to be any risk that consumers would confuse the trade source of the Big Jack Hamburger with the source of the Big Mac Hamburger.
Prior to the launch of the BIG JACK hamburger, Hungry Jack’s secured a trade mark registration for the BIG JACK trade mark. Mr Baird noted that McDonald’s did not oppose that registration.
In relation to the MEGA JACK, as part of the same limited time offering of the BIG JACK, Hungry Jack’s trialled a larger sized variant of the BIG JACK with two larger (4oz) meat patties and a bigger (5”) bun which was named MEGA JACK. Hungry Jack’s had previously used the word MEGA for its two products MEGA MILKSHAKES and MEGA MEALS for promotional deals. Mr Baird gave evidence that the MEGA JACK hamburger was designed to provide a much bigger burger alternative to the BIG JACK hamburger. At that time, he was not aware that McDonald’s had registered the trade mark MEGA MAC and had never heard of a product of that name being sold or promoted by McDonald’s. Indeed, he first learned of that trade mark when Hungry Jack’s received a letter before action from Spruson & Ferguson dated 21 August 2020.
In cross examination, Mr Baird accepted that in adopting a club style hamburger form, Hungry Jack’s was following a BURGER KING strategy, in terms of how BURGER KING intentionally competes against the BIG MAC by having a type of hamburger that is similar to the BIG MAC. He gave evidence that this choice of name was part of the naming convention, following the international use of BIG KING, but adapting it for the Australian market where there was no recognition of KING, but recognition of HUNGRY JACK’S. He resisted the proposition that the name BIG JACK was chosen because of its similarity with BIG MAC, instead saying that it was coincidental that the names were similar (particularly in that they rhyme) and that the choice of JACK came about because the word JACK is a “property” of Hungry Jack’s. I take this to mean that as far as Hungry Jack’s is concerned, JACK is part of its recognised brand, which I find is plainly correct. Having said that, Mr Baird readily accepted that there are “obvious links between the two name[s], you can’t move away from that”, a point that he and other decision makers at Hungry Jack’s recognised. It was this that he considered gave the choice “an element of cheekiness”.
As developed in cross examination, Mr Baird’s evidence was:
And so the element of cheekiness was something that you were aware of at the time you were considering what to call the Big Jack?---Correct.
And it was something that you took into account in naming the product Big Jack, wasn’t it?---Moving – as we moved forward, correct.
And the cheekiness that you refer to in paragraph 40 was entirely intentional, wasn’t it, Mr Baird?---I think there was – I think there – we had gone through due process and we were looking for how we could actually leverage the name. And, as I said, it was – there was obviously – we understood that there would be some – that there would be that element of cheekiness between the two names.
So the element of cheekiness was deliberate in your choice, so far as you were concerned - - -?---Correct.
- - - of the name Big Jack, correct?---Correct.
And you also intended that consumers, seeing the name Big Jack or encountering it as the name of a hamburger, would call to mind the Big Mac because of that similarity, correct?---Correct.
Mr Baird did not accept that the absence of use of the apostrophe “s” at the end of JACK in the BIG JACK mark made any relevant difference, because the “naming convention” (and, I interpolate, the “leverage” mentioned in the above passage) was based on what he considered to be Hungry Jack’s “ownership” of the word “Jack”. He resisted the proposition that Hungry Jack’s wanted to leverage off consumer recognition of the BIG MAC brand, giving evidence that it was not his intention to do so, saying “[w]e wanted to ensure that we were trying to get people to buy the BIG JACK product”. Mr Baird accepted that he and those at Hungry Jack’s wanted there to be a recollection of the BIG MAC brand when they saw BIG JACK.
Mr Baird confirmed in his oral evidence that his view that there would be no consumer confusion as a result of the choice of BIG JACK was for several reasons: that there was an established level of competition between McDonald’s and Hungry Jack’s; that both businesses use distinctive branding, such as their logos and names; and the differences in the word marks.
Mr Baird was directly challenged on the question of intention as follows:
Now, Mr Baird, in proceeding with the launch of the product using the name Big Jack you knew, didn’t you, that there was a possibility that some consumers who encountered the words Big Jack as the name of hamburger might wonder whether it came from the source as the Big Mac?---No.
…
In particular, you knew that there was a possibility that consumers of that kind, that is, consumers who were only occasional consumers of QSR products, and had a limited familiarity with the Big Mac, might be cause to wonder whether a hamburger called the Big Jack came from the same source as the Big Mac?---In – I can’t see how that’s – how that’s conceivable.
And I suggest that in adopting the name Big Jack, so far as you were concerned, you intended to take advantage of that possibility in using that name for a Hungry Jack’s hamburger?---No. Incorrect. The research, as part of the discovery documents, showed that switchers, who were – who we were actually targeting as the core target – and there’s a reference there – were looking for variety, and variety and adding to our burger range would actually attract those consumers.
I consider that Mr Baird gave honest evidence and that the answers given in this passage represent his genuinely held view.
3.5 The deceptive similarity arguments
McDonald’s submits: that there are significant visual and aural similarities between the BIG MAC and BIG JACK; that the “idea” conveyed by the respective marks is similar with the word BIG being coupled with the name of a person with the latter being strong and colloquial or familiar names leading to the idea being that it is a large burger, perhaps personified or referable to a person, citing Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd [1952] HCA 15; (1952) 86 CLR 536 at 539; and that the “surrounding circumstances” which are relevant are that the goods are ready-to-eat and relatively low-priced food and that this increases the prospect that consumers will not subject the marks to detailed analysis and may be caused to wonder as to their origin by reason of their imperfect recollection. McDonald’s submits that there is at least a real, tangible danger of confusion, or of consumers being caused to wonder whether it might not be the case that the two products come from the same source, in the surrounding circumstances that the authorities permit to be taken into account in the infringement analysis, emphasising that the authorities do not permit consideration to be taken of Hungry Jack’s’ use of its HUNGRY JACK’S house mark and other distinguishing indicia.
For the enquiry under s 18, it is necessary to identify the impugned conduct and then to consider whether that conduct, considered as a whole and in context, is misleading or deceptive or likely to mislead or deceive; Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73 (Allsop CJ) at [38] (ACCC v Coles).
Conduct is misleading or deceptive or likely to mislead or deceive if it has the tendency to lead into error and if there is a sufficient causal link between the conduct and the error on the part of the person exposed to the conduct. The causing of confusion or questioning is insufficient; it is necessary to establish that the ordinary or reasonable consumer is likely to be led into error; ACCC v Coles at [39]. As the Full Court (French, Heerey and Lindgren JJ) said in SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1821; (1999) 169 ALR 1 at 14 [51]:
… The characterisation of conduct as “misleading or deceptive or likely to mislead or deceive” involves a judgment of a notional cause and effect relationship between the conduct and the putative consumer’s state of mind. Implicit in that judgment is a selection process which can reject some causal connections, which, although theoretically open, are too tenuous or impose responsibility otherwise than in accordance with the policy of the legislation.
A representation is likely to mislead or deceive if it may be expected to or has a capacity or tendency to mislead or deceive. In such a case, “likelihood” means a real and not remote chance or possibility of having that effect; Global Sportsman Pty Ltd v Mirror Newspapers Ltd [1984] FCA 167; (1984) 2 FCR 82 at 87 (Bowen CJ, Lockhart and Fitzgerald JJ). It is necessary to view the conduct as a whole and in its proper context. This may include consideration of the type of market, the manner in which such goods are sold, and the habits and characteristics of purchasers in such a market. The context will also include relevant disclaimers or explanations; Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 at 608 [49] (Gleeson CJ, McHugh, Kirby, Hayne and Heydon JJ). In assessing advertising material, the “dominant message” of the material will be of crucial importance; ACCC v Coles at [42]. The dominant message of an advertisement may be the only one which a consumer takes in, and it is therefore important, as a first step, to identify that message; Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2011] FCA 1254 at [43] (Murphy J). In many cases it will be necessary to consider the class of persons to whom the representation was directed; S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd [1998] FCA 1463; (1998) 168 ALR 396 at 362.
In ACCC v Coles Allsop CJ said at [46]:
Half-truths may be misleading by the insufficiency of information that permits a reasonably open but erroneous conclusion to be drawn: Fraser v NRMA Holdings Ltd (1994) 124 ALR 548 at 563; Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 at 50. In Tobacco Institute, Hill J referred to the valuable observations of Sheldon J and Sheppard J (when the latter was a member of the Industrial Court) in CRW Pty Ltd v Sneddon (1972) AR (NSW) 17 at 28, as well as making pertinent and valuable observations of his own. Hill J said the following at 50:
However, as was observed by Sheldon and Sheppard JJ in CRW Pty Ltd v Sneddon (1972) AR (NSW) 17 at 28 (the context was the Consumer Protection Act 1969 (NSW):
“An advertisement published in a newspaper is not selective as to its readers. The bread is cast on very wide waters. The advertiser must be assumed to know that the readers will include the shrewd and the ingenuous, the educated and the uneducated and the experienced and inexperienced in commercial transactions. He is not entitled to assume that the reader will be able to supply for himself or (often) herself omitted facts or to resolve ambiguities. An advertisement may be misleading even though it fails to deceive more wary readers.”
Where the advertisement is capable of more than one meaning, the question of whether the conduct of placing the advertisement in a newspaper is misleading or deceptive conduct must be tested against each meaning which is reasonably open. This is perhaps but another way of saying that the advertisement will be misleading or likely to mislead or deceive if any reasonable interpretation of it would lead a member of the class, who can be expected to read it, into error: Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 at 81 per Northrop J and cf the approach taken by Mason J in Parkdale.
Where the effect contemplated is on a class of consumers (as in the present case), the effect of the conduct on reasonable members of the class is to be considered; Campomar at [103] (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ). The focus of the inquiry is on whether a not insignificant number within the class have been misled or deceived or are likely to have been misled or deceived by the respondent’s conduct. If reasonable members of the class would be likely to be misled, then such a finding carries with it the conclusion that a significant proportion of the class would be likely to be misled; National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90; (2004) 61 IPR 420 at [70] and [71] (Jacobson and Bennett JJ). The question may be put slightly differently as whether a “not insignificant number” of “reasonable” or “ordinary” members of that class of the public would, or are likely to, be misled or deceived; Peter Bodum A/S v DKSH Australia Pty Ltd [2011] FCAFC 98; (2011) 280 ALR 639 (Greenwood, Tracey and Buchanan JJ) at [204] – [210] per Greenwood J.
6.2.3Consideration of the 25% more Aussie beef representation
The first TVC provides imagery first of a BIG JACK hamburger ready to eat with French fries and a soft drink with a dynamic flame in the background. It then cuts to a scene of meat patties in the process of being cooked over a flame grill. Centrally superimposed over a close-up of the meat is a circular “stamp” or device which includes the prominent words “25% MORE AUSSIE BEEF”. The imagery is of meat patties in an advanced stage of cooking, with the meat having been darkened by a flame grill. The cooking scene concludes with the device fading and the patties being either removed or flipped by a spatula. The third scene is similar to the first, depicting a ready to eat hamburger with fries and a soft drink with flames flickering the background. The voiceover is set out in section 6.1 above.
The second TVC has a similar first scene to the first TVC. The second scene is again of cooking meat, but this time shows multiple patties, one being turned by barbeque tongs. All of the patties appear to be at an advanced stage of cooking, with grill marks visible. The device or stamp is set to the right-hand side and remains visible during the second scene, which shows the patties on the grill, but is not present in the final scene, which depicts a ready to serve BIG JACK. The voiceover is as set out above.
I have in section 3.6.1 identified that the typical consumer of hamburgers from quick service restaurants will be a member of the public who is likely to make a purchase based on convenience, taste and value. The target market for Hungry Jack’s was said by Mr Baird to be people aged between 18 and 39, although no doubt the age range of those who attend Hungry Jack’s outlets is wider. As I have noted, because people will eat hamburgers, they are likely to pay some attention to make sure that they get the right product. Unlike other relatively inexpensive items, persons consuming food will want to know what they are getting. They are not likely be particularly careless or inattentive.
Nevertheless, this is an advertisement that is likely to be viewed in circumstances other than in a Hungry Jack’s restaurant and most likely not at the time when the viewer intends to make a purchase. It is likely that it will be forced upon the viewer, either in a commercial break during a television show or pushed via social media. It will possibly be an uninvited distraction. The viewer is unlikely to pay close attention to every aspect of it, but will form a general impression of its message, which is, simply put, that the BIG JACK has 25% more Australian beef in it that the McDonald’s equivalent, the BIG MAC. I do not think that the consumer will pay much regard to the distinction between cooked and pre-cooked weight. To the extent that they do, many are likely to form an impression that it is cooked weight. That impression is supported by the images of the patties being at an advanced stage of cooking, and the concluding image of a ready to eat hamburger meal. In my view, the message is that when you eat this meal, you will be eating 25% more Aussie beef than when you eat the competitor’s product.
In this regard, I consider that the evidence of menus and weighing regulations provided by Hungry Jack’s is tangential to the message conveyed by the whole of the advertisements themselves. It is adduced in order to demonstrate that consumers are somehow acclimatised to the fact that meat is sold by reference to its pre-cooked weight. However, it is the impression carried away from the commercial itself that matters.
I am not persuaded that viewers would consider that the commercials are to be viewed in the same way that they would consider an a la carte menu at a hotel, a number of which were exhibited. In any event, most of those menus displayed clarifying messages. For instance, Hungry Jack’s relied heavily on McDonald’s’ promotion of its QUARTER POUNDER hamburger, which promoted “…a whole quarter pound* of 100% Aussie beef”. But the * draws attention to a disclaimer: “*Weight before cooking”.
Similar footnotes or disclaimers are present on many of the menus in evidence. Far from suggesting that consumers are generally alert to meat being promoted on the basis of pre-cooked weight, in my view, this evidence supports the proposition that most consumers need to be told when the weight of the meat being promoted or sold in a meal is the pre-cooked weight. An inference readily available is that consumers would tend to assume that, unless the disclaimer is present, it will be the post-cooked weight or that there is an element of ambiguity about whether it is pre-cooked or not, and that this is best resolved by the disclaimer.
I am fortified in this conclusion by the fact that, in an internal Hungry Jack’s email dated 31 January 2020, Mr McCallum wrote to Mr Baird including comparative information of the cooked weight of the then proposed 5” and 4” BIG JACK patties as against the BIG MAC, thereby suggesting that this was a metric used within Hungry Jack’s.
I consider the evidence of Mr Baird that some regulations require pre-cooked weight to be displayed when selling meat products to be irrelevant to the message that consumers would take from the impugned commercials.
Accordingly, I consider that a not insignificant number of reasonable consumers in the class likely to see the advertisements would consider that they convey the message that the cooked weight of the meat in the hamburgers being advertised is 25% greater than that of the comparator hamburger.
6.3 The evidence of the weight of the meat
The evidence adduced of the comparative cooked weight of the BIG JACK and BIG MAC meat patties was detailed and extensive.
Dr Prestney, who holds a PhD in analytical chemistry, gave evidence as to the steps that she took on 12 November 2020 to measure the weight of the meat patties in question which may be summarised as follows:
(1)She went to six Hungry Jack’s restaurants located in Brisbane and ordered two BIG JACK hamburgers from each, asking that they be supplied without the cheese and condiments. A colleague did the same for a further four restaurants;
(2)On the same day, she went to five McDonald’s restaurants and ordered two BIG MAC hamburgers from each, asking that they be supplied without the cheese and condiments. The same colleague did the same for five further restaurants;
(3)All of the acquisitions above took place between 8am and 2pm on the same day;
(4)Back at the testing laboratory, the wrapping was removed and the meat patties were separated from the balance of the hamburgers;
(5)The patties were weighed on an Fx-5000i calibrated balance over a period of 2 hours on the same day as the purchases between about 2pm and 3pm;
(6)A spreadsheet was created setting out the weights. One sample hamburger (sample 2 from McDonald’s restaurant 9) was supplied with condiments, which Dr Prestney carefully removed before weighing.
In her second affidavit, Dr Prestney gives evidence of further testing that she conducted in Brisbane in accordance with a test protocol the subject of Orders made pursuant to r 34.50(2)(b) of the Federal Court Rules 2011 (Cth). She took the following steps:
(1)She and her colleague went to 10 Hungry Jack’s restaurants between them and ordered five BIG JACK hamburgers at each, without the cheese and condiments;
(2)She and her colleague went to 10 McDonald’s restaurants and purchased five BIG MAC hamburgers, without the cheese and condiments;
(3)All of the acquisitions were made on the same day, between 8am and 2pm;
(4)Weighing of the patties took place progressively during the morning and later in the day, using a NATA accredited balance;
(5)A set of spreadsheets was created recording the results of the testing and a statistical analysis of the results.
Mr Balshaw, who has worked as an analyst in the food industry since 1992, also conducted testing in accordance with the same protocol that was the subject of Orders on hamburgers acquired from restaurants located in Melbourne. He gave evidence of taking the following steps:
(1)He and a colleague went to 10 Hungry Jack’s restaurants and 10 McDonald’s restaurants and acquired five BIG JACK and BIG MAC hamburgers at each, ordering them without the cheese and the condiments;
(2)The acquisitions were made on 14 July 2021 between 8am and 1.30pm;
(3)At about 2pm he disassembled the hamburgers and used a NATA accredited top loading balance accurate to two decimal places to weigh the patties;
(4)A set of spreadsheets was created to record the results together with a statistical analysis of the results.
Hungry Jack’s levelled a series of criticisms at the processes described above based on evidence adduced during cross examination of Dr Prestney and Mr Balshaw. It submitted that by removing the condiments and cheese, the testing had violated the integrity of the hamburgers such that it was neither a cooked BIG JACK nor a cooked BIG MAC hamburger patty that was being weighed. It contended that the protocols provided no sequence in which the respondents were to be visited or timeframe between the acquisition and weighing, with the consequence that the patties were not weighed immediately after purchase. Nor was account taken for moisture loss from the patties to the bun or for moisture lost by heat dissipation over time which might have altered the results. Furthermore, the protocol did not require that after acquisition the hamburgers be refrigerated and, in fact, for all but ten of the hamburgers acquired by Dr Prestney, they were left in the car in the bags that they were purchased in until they were tested, with many sitting in the car for a number of hours before being taken to the testing laboratory. Finally, Mr Balshaw gave evidence that the bun on the BIG JACK tended to stick to the patties and bun remnants had to be removed by him with a paper towel.
I do not consider that any of these criticisms are likely to have a material bearing on the results recorded which, as I set out below, indicate that the cooked weight of the respective patties demonstrates that the weight of the meat in the BIG JACK is far short of being 25% greater than the meat in the BIG MAC.
If the hamburgers had been ordered with cheese and condiments, then those ingredients would in any event have had to be removed to weigh the patties. A measurement taken without the condiments is more likely to provide an accurate weight of the meat. Whilst loss of moisture either through evaporation or absorption into the bun might have had a slight bearing on the actual weight of the patties, there is no suggestion that the BIG JACK patties were treated any differently to the BIG MAC patties, with the consequence that it is reasonable to expect that any moisture loss is likely to have been equivalent. Mr Balshaw gave his opinion that the bun remnants present would be unlikely to have a material effect on the weight recorded.
The results are telling:
Brisbane sample #1
(Dr Prestney)Brisbane sample #2
(Dr Prestney)Melbourne sample
(Mr Balshaw)Average combined weight of BIG JACK patties
64.92g
64.18g
61.98g
Average combined weight of BIG MAC patties
57.26g
55.86g
53.17g
Difference (g) in combined weight
7.66g
8.32g
8.81g
Difference (%) in combined weight
12.5%
13.9%
15.3%
The relevant question is whether or not it was a misrepresentation for the advertisements to tout that the BIG JACK contained 25% more Aussie beef than the BIG MAC. The above results demonstrate, with a very considerable margin of error, that the weight difference is significantly less than 25%. Hungry Jack’s chose not to elicit any evidence in response to the testing evidence to which I have referred.
Accordingly, I conclude that the misrepresentation case is made out.
7. CONCLUSION
I have concluded that McDonald’s’ trade mark infringement case fails, as does its challenge to the validity of the BIG JACK registered trade mark. However, McDonald’s succeeds in its ACL claim. Hungry Jack’s has succeeded in defending the trade mark infringement case, but failed in its endeavour to secure the revocation of the MEGA MAC registered trade mark, with the exception of some goods, which must be removed from its registration.
I will direct that the parties confer and provide short minutes of order giving effect to these reasons, including a timetable for the resolution of any dispute as to costs and any residual issues for determination.
I certify that the preceding two hundred and nineteen (219) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley. Associate:
Dated: 15 November 2023
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