Melbourne's Cheapest Cars Pty Ltd v Melbourne Street Cars
[2004] FMCA 606
•15 September 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MELBOURNE'S CHEAPEST CARS PTY LTD v MELBOURNE STREET CARS | [2004] FMCA 606 |
| TRADE PRACTICES – Section 52 – passing off – signage – words, design, layout and color – registered trade mark – corporate and business name – presence in market of used car business – whether passing off or breach of s.52 – injunction granted. |
Trade Practices Act 1974 (Cth), s.52
Taco Co of Australia & Anor v Taco Bell Pty Ltd & Ors (1982) 42 ALR 177
Hornsby Building Information Centre Pty Ltd & Anor v Sydney Building Information Centre Ltd [1977-1978] 140 CLR 216
Prospero Publishing Pty Ltd v Rumcoast Holdings Pty Ltd (2000) ATPR 41-762
Dairy Industry Marketing Authority and Others v Southern Farmers Co-operative Ltd (1982) ATPR 40-273
Targetts Pty Ltd v Target Australia Pty Ltd (1993) ATPR 41-231
Cadbury Schweppes Pty Ltd & Ors v Pub Squash Co Pty Ltd (1980) 2 NSW LR 851
Irish Distillers Ltd & Os v Smith & Son Pty Ltd & Anor (1986) 7 IPR 509
Lumley Life Ltd & Anor v IOOF Victoria Friendly Society (1989) 16 IPR 316
| Applicant: | MELBOURNE'S CHEAPEST CARS PTY LTD (ACN 086 996 036) |
| Respondent: | CONGEO NOMINEES PTY LTD trading as MELBOURNE STREET CARS (ACN 077 188 357) |
| File No: | MLG 544 of 2004 |
| Delivered on: | 15 September 2004 |
| Delivered at: | Melbourne |
| Hearing Date: | 23 August 2004 |
| Judgment of: | McInnis FM |
REPRESENTATION
| Counsel for the Applicant: | Mr M Klemens |
| Solicitors for the Applicant: | Kahns Lawyers |
| Counsel for the Respondent: | Mr M Goldblatt |
| Solicitors for the Respondent: | J Kotsifas & Associates |
ORDERS
The Respondent within 30 days of the date of this order alter the signage on its business premises situated at 181-183 Princes Highway Dandenong in the State of Victoria (the premises) by either:
(a)changing the words “Cheapest Cars in Melbourne” to words which are substantially different and not deceptively similar to those words; or
(b)changing the colours red and yellow used at the premises to colours which are different and not deceptive similar to those colours.
The Respondent shall pay the Applicant’s costs of its application for injunctive relief, such costs to be taxed in default of agreement pursuant to Order 62 of the Federal Court Rules based upon Schedule 1 of the Federal Magistrates Court Rules.
The application be adjourned for directions on 15 October 2004 at 9.45 a.m.
Liberty is granted to the parties to apply.
Pursuant to Rule 21.15 of the Federal Magistrates Court Rules the Court certifies that it was reasonable for the parties to employ an advocate to appear in the proceeding.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 544 of 2004
| MELBOURNE'S CHEAPEST CARS PTY LTD (ACN 086 996 036) |
Applicant
and
| CONGEO NOMINEES PTY LTD trading as MELBOURNE STREET CARS (ACN 077 188 357) |
Respondent
REASONS FOR JUDGMENT
In this application Melbourne's Cheapest Cars Pty Ltd (the applicant) seeks an injunction against Congeo Nominees Pty Ltd (the respondent) based upon a claim that the respondent has contravened s.52 of the Trade Practices Act 1974 (Cth) (the TPA) or that it has engaged in passing off its business as being associated with that of the applicant.
The parties agreed that the hearing would be conducted on the affidavit evidence without the need for any viva voce evidence and that the only issue to be determined at this stage was whether or not an injunction should be granted.
In the application filed 17 May 2004 the applicant seeks the following orders which are relevant to this application for injunction:
“1.An order that the Respondent:
(i)remove all signage bearing any deceptive or misleading similarity to the signage of the Applicant's business.
(ii)redecorate its business premises in colours sufficiently different to that of the Applicant's premises.
(iii)cease distribution of all advertisements, regardless of manner of form, that feature any signage, image, wording or other matter which is deceptively or misleadingly similar to the Applicant's business.
(iv)refrain in future from engaging in any deceptive or misleading conduct which could be construed as passing off its business as being associated with that of the Applicant.
2.An order that the Respondent in future refrain from:
(i)displaying any signage bearing any deceptive or misleading similarity to the signage of the Applicant's business.
(ii)decorating its business premises in a colour scheme not sufficiently different to that of the Applicant's business premises.
(iii)advertising in any manner or form which makes use of any signage, image, wording or other matter which is deceptively or misleadingly similar to the Applicant's business.
(iv)engaging in any deceptive or misleading conduct which could be construed as passing off its business as being associated with that of the Applicant.”
Background
For approximately 12 years the applicant has engaged in the business of selling used motor vehicles. It originally had one car yard at South Road, Moorabbin in the State of Victoria and since 2002 commenced operating a second car yard a short distance from the first one in Keys Road, Moorabbin. The car yards between them sell approximately 5000 used vehicles per annum and it is claimed concentrate on what is described as the lower end of the market, namely, vehicles worth on average $15,000, with the emphasis of one of the premises on vehicles worth less than $6000. It would appear the applicant has always sold vehicles from the Moorabbin premises, although it is noted that it had shifted premises from one part of South Road in Moorabbin to another part.
In the affidavit material the applicant through its director Edvins Abelnica claimed that the applicant's business enjoys a substantial "public profile" and that the applicant has invested heavily to establish its market identity including regular television and print media advertisements. It referred to having spent in excess of $6 million advertising the business in the past three financial years and claimed to have a reputation through a variety of media, including regular advertisements in both regional and metropolitan television and print advertisements. The applicant advertises via a web site which it claimed recorded 21,000 hits in the seven-month period between September 2003 and March 2004. It otherwise claims to have raised its profile through various community and sporting sponsorships.
Of significance in the present application is the applicant's business premises which currently feature a bright red and yellow colour scheme with the words "MELBOURNES CHEAPEST CARS" displayed in large block lettering on various signs around the premises. An example of the sign, albeit with the limitation of black and white reproduction or printing which will occur if the judgment is reproduced in black and white rather than color as set out below. It should be noted that the words are in white against a red border which itself is set against a yellow background.
PHOTOGRAPH 1
A further example of the applicant’s signage is found in the example below which depicts another sign and it will be noted that the director's
name is not evident on that sign.
PHOTOGRAPH 2
It is claimed by the applicant that the dominant words used in its signage are "MELBOURNES CHEAPEST CARS". The words, signs and colour scheme, according to the applicant's affidavit, have been used by the applicant since commencing its business as a sole trader in 1992. The business name and signage was registered as a trade mark on 20 June 2003. The image for the relevant trade mark 958698 of the applicant appears below.
PHOTOGRAPH 3
Arising out of the trade mark and signage it was submitted on behalf of the applicant that as well as the colour scheme used, that the dominant words in the signage may be broken up as follows:
a)Cheapest;
b)Melbourne;
c)Cars.
The words used in what was a registered business name then became incorporated with the name and signage now being a registered trade mark owned by the applicant.
The claim against the respondent is that it commenced using words dominant in its signage at premises in Dandenong including "CHEAPEST CARS IN MELBOURNE" some time after August 2002, approximately 10 years following the date upon which the applicant commenced using the same words.
It is claimed that the respondent's words "Melbourne Street Cars" is in small lettering with the dominant words clearly as follows:
a)Cheapest;
b)Melbourne;
c)Cars.
An example of the signage of the respondent is set out below.
PHOTOGRAPH 4
The above sign has the words "MELBOURNE STREET CARS, CHEAPEST CARS IN MELBOURNE" in red on a yellow background. At another point of the premises the words "CHEAPEST CARS IN MELBOURNE" are printed in black on a yellow background.
It is claimed by the applicant that the colour scheme of the respondent with its dominant yellow is substantially similar to that of the applicant. It is submitted that the intention of the applicant is irrelevant for the purposes of these proceedings. Both the applicant and the respondent sell used cars at the lower end of the market and, it was submitted, the question for the court is whether or not the respondent's conduct, that is, by way of its signage, amounts to a misrepresentation. It was submitted that the court should find that it is misleading and deceptive or likely to mislead or deceive. It was claimed that potential purchasers of used cars sold by the applicant may be misled into believing that the respondent's car yard is associated with the applicant's business.
The trade mark also appears in newspaper advertisements for and on behalf of the applicant which may be in a black and white form or in one instance before the court (Exhibit R1) appears to be white lettering on a red background.
The use of the signage by the applicant and registration of business name, together with the trade mark registration, are not matters which are in issue before the court.
What is claimed on behalf of the applicant, however, is that the dominant words, signage and colour scheme of the respondent is substantially similar to that used by the applicant and accordingly is misleading or deceptive and/or sufficient to constitute passing off.
Affidavit material filed in support of the application by the applicant referred to claimed instances of members of the public referring to "the Dandenong premises" of the applicant when at all times the applicant's premises were located in Moorabbin, with the inference being drawn that the persons making the inquiry had confused the respondent's premises in Dandenong with those of the applicant in Moorabbin. It is not necessary to further analyse that material in this application.
It is further noted that upon discovering the signage of the respondent the applicant instructed solicitors to make demands upon the respondent to redecorate the premises sufficiently to remove any similarity to the applicant's signage and to otherwise withdraw advertising which may constitute misleading and deceptive conduct. The letter dated 1 March 2004 from the applicant's solicitors to the respondent recite the allegations referred to previously and seeks the remedy stated earlier, together with payment of costs then said to be $250. As indicated earlier in this judgment, the issue of damages by agreement is not to be decided at this stage of the proceedings.
The respondent has denied liability and in correspondence dated 10 March 2004 claims the respondent had been trading for a period "in excess of six years with the same business logo and colouring". It otherwise denied any breach of the Trade Practices Act. In the applicant's material a further photograph was produced which, according to the deponent on behalf of the applicant, provided evidence of the signage used by the respondent prior to 2003. The following is an example of the signage at the respondent's previous premises as claimed by the applicant.
PHOTOGRAPH 5
The respondent relied upon an affidavit of Con Andrianopoulos who deposed that he established the respondent's business with the business name "Melbourne Street Cars" in or about October 1997. He claims the business name of "Melbourne Street Cars, Cheapest Cars in Melbourne" was first registered in November 2002. In October 1997 he commenced trading from premises in Murrumbeena and in August 2002 purchased the current respondent's premises in Dandenong. He then engaged on behalf of the respondent sign-writer services, the result of which are set out in the examples of the respondent's signage referred to earlier in this judgment.
It is claimed that the design and colour scheme were recommended by the sign-writer, and further claimed that there are substantial differences in the colour scheme. In particular, it is claimed that the colour scheme of the applicant is a "burgundy red with white writing on a yellow background with a white border around the wording 'Melbourne's Cheapest Cars'". The respondent's premises feature a yellow background with red writing and no border. Otherwise, the respondent denies it has taken advantage of the applicant's profile and reputation in Melbourne, and, as indicated earlier, denies any breach of the Trade Practices Act or that it is guilty of passing off. Some attempt was to made to distinguish the marketplace of the two businesses by reference to the average price of vehicles sold, although in the circumstances that issue did not seem to be pressed too strongly for reasons which are apparent; namely, that both businesses seem to operate in the lower end of the used car market.
The respondent relied upon an affidavit of the sign-writer to corroborate the assertion that he determined the colour scheme and design of the signage and painting, and further relied upon a subcontractor who claimed to be present when the instructions were given by the respondent to the sign-writer. The instructions and discussions concerning signage for the respondent were claimed to have occurred "on or about August 2002".
Whilst some objection was taken to affidavit material filed in support of the application as to what other parties may have said to the applicant's representative, it is sufficient for present purposes to simply note that there is evidence that the signage issue was made known to the applicant's representative by third parties. It is obviously a matter for the court to consider whether or not there is a similarity of a kind which would persuade the court to grant an injunction. At one point during submissions and consideration of the various colour photographs the court was invited to consider the possibility of a view of the respective premises if indeed the issue before the court was to turn on the shade of a yellow background used by the parties. So that there be no confusion, I am satisfied that it is not necessary to view both premises, although note that some photographs appear to be taken when the signs have been in shade whilst others are in full sunlight. The irrefutable fact remains, however, that both parties use a bright yellow background. For present purposes, it is sufficient to draw that conclusion and the view on that issue is not necessary. Likewise, the distinction between the shades of red used in both signs with the applicant's red being somewhat darker than the respondent's red colouring does not justify a view. I am able to draw that conclusion from the photographs.
Against the factual background both parties made submissions, particularly after a comparison of the respective photographs at the premises of the applicant compared with those of the premises of the respondent. I was referred by both counsel to the Full Court of the Federal Court decision in Taco Co of Australia & Anor v Taco Bell Pty Ltd & Ors (1982) 42 ALR 177 (Taco). It is noted in that case the court held that it is essential to passing off that there be injury or potential injury to the goodwill and damages or likelihood of damage to the plaintiff. A party seeking relief for passing off, it was held, must have goodwill in the geographical area for which the injunction is sought and damage or likelihood of damage to that goodwill must be proven.
It is relevant to set out the following passage from the joint judgment in Taco of Deane and Fitzgerald JJ at page 201 where their Honours state the following:
“As has already been noted, the High Court in Hornsby Building Information Centre v Sydney Building Information Centre, supra, held that the respondent's use of a name similar to the name of the applicant did not, in the particular circumstances of that case, offend s.52(1). The names there were descriptive and thus not distinctive of any particular business. However, the possibility of confusion was recognized and the conclusion was arrived at, notwithstanding evidence that persons had been led, by the similarity of names, to believe that the Hornsby Centre was a branch of, or otherwise associated with, the Sydney Centre. …”
In the matter of Hornsby Building Information Centre Pty Ltd & Anor v Sydney Building Information Centre Ltd [1977-1978] 140 CLR 216 at 230 (Hornsby) Stephen J said:
“… Evidence of confusion in the minds of members of the public is not evidence that the use of the Hornsby Centre's name is itself misleading or deceptive but rather that its intrusion into the field originally occupied exclusively by the Sydney Centre has, naturally enough, caused a degree of confusion in the public mind. This is not, however, anything at which s.52(1) is directed.”
In Taco the majority judgment of the court provided a number of propositions which may provide guidance in a case such as that one where the suggested misrepresentation was not expressly made and it was alleged that the relevant deception or misleading either is likely to be of the public. The following extract setting out four propositions is relevant:
“First, it is necessary to identify the relevant section (or sections) of the public (which may be the public at large) by reference to whom the question of whether conduct is, or is likely to be, misleading or deceptive falls to be tested (Weitmann v Katies Ltd (1977) 29 FLR 336, per Franki J at 339–40, cited with approval by Bowen CJ and Franki J in Brock v Terrace Times Pty Ltd (1982) 40 ALR 97 at 99; [1982] ATPR 40-267 at 43,412).
Second, once the relevant section of the public is established, the matter is to be considered by reference to all who come within it, “including the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations”: Puxu Pty Ltd v Parkdale Custom Built Furniture Pty Ltd (1980) 31 ALR 73, per Lockhart J at 93: see also World Series Cricket v Parish, supra, per Brennan J (16 ALR at 203).
Thirdly, evidence that some person has in fact formed an erroneous conclusion is admissible and may be persuasive but is not essential. Such evidence does not itself conclusively establish that conduct is misleading or deceptive or likely to mislead or deceive. The court must determine that question for itself. The test is objective (see, generally, Annand & Thompson Pty Ltd v Trade Practices Commission (1979) 25 ALR 91 per Franki J at 102; Sterling v Trade Practices Commission (1981) 35 ALR 59, per Franki J (with whom Northop J agreed) at 66 and per Keely J at 69; Snoid v Handley (1981) 38 ALR 383, per the court (Bowen CJ, Northrop and Morling JJ); and Brock v Terrace Times, supra per Bowen CJ and Franki J).
Finally, it is necessary to inquire why proven misconception has arisen: Hornsby Building Information Centre v Sydney Building Information Centre (18 ALR at 647140 CLR at 228). The fundamental importance of this principle is that it is only by this investigation that the evidence of those who are shown to have been led into error can be evaluated and it can be determined whether they are confused because of misleading or deceptive conduct on the part of the respondent.”
It is appropriate to refer to the decision of the High Court in the Hornsby case which was considered by the Federal Court in the Taco decision. In Hornsby the majority of Stephen, Jacobs and Murphy JJ held that s.52 is not confined to conduct that is intended to mislead or deceive. Stephen J in his judgment relevantly states the following in relation to a claim of breach of s.52 of the Trade Practices Act:
“19.When, as in s.52(1), the focus is upon the misleading of others rather than upon the injury to a competitor, it becomes of particular importance to identify the respect in which there is said to be any misleading or deception. The particular feature of the Hornsby Centre's conduct of which the Sydney Centre complains as being misleading and deceptive is not simply the use of its corporate name, so similar in part to its own name, but rather that by that use others are led to believe that the Hornsby Centre is a branch of, or is otherwise associated with, the Sydney Centre. (at p228)
20.The Sydney Centre tendered some evidence that persons had been misled in this way and for present purposes I will assume that this has occurred. But to determine whether there has been any contravention of s.52(1) it is necessary to inquire why this misconception has arisen in the minds of others. This necessarily leads one to examine the name of the Sydney Centre. The name which it adopted as its own consists of three descriptive words, prefixed by a word of locality, the whole of which it uses as its trade and corporate name. Having done so it cannot, as it acknowledges, claim any monopoly in the descriptive words; yet it does in fact seek to impose conditions upon another's use of those words, the condition being that an explanatory disclaimer should accompany that use. The Court, of course, has gone much further, it has granted to the applicant an interim monopoly in those words, despite the fact that the Sydney Centre neither claimed that monopoly nor now seeks to retain in that extreme form the injunctive relief which it has now obtained below. (at p229).”
It is further relevant to set out the following extract from the judgment of Stephen J in Hornsby where His Honour states:
“23. If this be so in the case of passing off actions the case of s.52(1), concerned only with the interests of third parties, is a fortiori. To allow this section of the Trade Practices Act to be used as an instrument for the creation of any monopoly in descriptive names would be to mock the manifest intent of the legislation. Given that a name is no more than merely descriptive of a particular type of business, its use by others who carry on that same type of business does not deceive or mislead as to the nature of the business described. Thus both the Hornsby and the Sydney Centres are building information centres and no one is being deceived as to the nature of the service which is available there. Any deception which does arise stems not so much from the Hornsby Centre's use of the descriptive words as from the fact that the Sydney Centre initially chose descriptive words as its title and for many years thereafter was the only centre in Sydney which answered the description which those words provide. In consequence members of the public have come to associate its particular business with that type of activity. Evidence of confusion in the minds of members of the public is not evidence that the use of the Hornsby Centre's name is itself misleading or deceptive but rather that its intrusion into the field originally occupied exclusively by the Sydney Centre has, naturally enough, caused a degree of confusion in the public mind. This is not, however, anything at which s.52(1) is directed. (at p230)”
It was submitted on behalf of the applicant that the applicant and the respondent both trade in what is described as the south-eastern suburbs of Melbourne and that the applicant has demonstrated that over a number of years it has been engaged in selling used cars in the lower end of the market, and indeed has sold a high volume of those cars. In referring to the matters raised earlier as part of the claim, it was further submitted during the course of argument by counsel for the applicant that the court should take into account the combination of the words, layout and colour scheme or what was described as "the total package of signage" that the court should consider in addition to the specific wording. The use by the applicant of a white border does not detract, according to the applicant's submissions, from the similarity between the respective signage.
Counsel for the applicant referred the court to the decision of the Supreme Court of Western Australia in the matter of Prospero Publishing Pty Ltd v Rumcoast Holdings Pty Ltd (2000) ATPR 41‑762 (Prospero). In that case the respondent had been the publisher of a lifestyle magazine in Western Australia called "Scoop". It was a semi‑glossy magazine published quarterly on good-quality paper and featured artistic, sporting and other events taking place in Western Australia. It was distributed to up-market hotels in Western Australia and sold by newsagents and by subscription.
The appellant had commenced publication of a weekly magazine called "The Scoop". It was directed at young men and contained numerous photographs of naked women. The Scoop was sold at newsagents in a sealed clear plastic envelope. At first instance Templeman J found that the appellant had engaged in misleading and deceptive conduct and passing off and the appeal was dismissed. In dismissing the appeal the Full Court referred to the trial judge's reasons and did not otherwise seek to challenge the principles of tort referred to by the trial judge in relation to the question of passing off. In dismissing the appeal the Full Court did not challenge the trial judge's findings which were referred to by counsel for the applicant and may conveniently be set out as follows:
“Trial Judge's reasons and a consideration of those grounds relating to establishing a cause of action
5.Templeman J considered, firstly, the question of passing off. His Honour set out the well-established principles of the tort and the grounds of appeal do not bring this aspect into question. The first element his Honour considered was whether the respondent, as plaintiff, had established a reputation for its magazine. His Honour found that the respondent had established both in Western Australia and elsewhere in Australia a reputation sufficient to ground the action. The grounds of appeal do not now challenge his Honour's finding as to the reputation within Western Australia but they do challenge the finding as to the reputation extending elsewhere in Australia. The latter challenge is important as to the extent of the injunction and will be considered later.
6.The next question his Honour examined was whether the appellant's conduct amounted to a misrepresentation. It was not pleaded that the applicant was aware of the existence of the respondent's publication. His Honour said that there was no question of fraud and that in the absence of fraud, the question was whether persons in the relevant class are likely to be misled into believing that an association exists between the two products. His Honour, after examining the evidence in detail, said that he considered that the word "Scoop" had become distinctive of the respondent's magazine and that the use by the appellant of the same word amounted to a misrepresentation that the appellant is or may be in some way associated with the respondent. His Honour also said that the appellant's conduct constituted a misrepresentation because purchasers or potential purchasers of the respondent's magazine, who were aware of the existence of the appellant's magazine, may conclude that the two have come from the same source. …”
As I understand the submission on behalf of the applicant, the fundamental finding of a reputation has been established in the present case sufficient to ground the action. On the evidence before me I am prepared to make that finding and although the evidence appears to relate to the business of the applicant in the south-eastern suburbs of Melbourne, I am satisfied that the marketplace, having regard to the advertising and the breadth of advertising, extends at least to the Melbourne metropolitan area and perhaps beyond given the existence of a web site and other material which would tend to indicate advertising to a national market. It is otherwise noted that the applicant asserts that the respondent's signage may lead consumers to believe that the respondent is in some way associated with the applicant's business. The conclusion in relation to that matter would depend upon the court's reasoning as to the comparative signage.
The Applicant's counsel further referred to the decision of Lockhart J in the matter of Dairy Industry Marketing Authority and Others v Southern Farmers Co-operative Ltd (1982) ATPR 40-273 (Dairy Industry). In that case the court had to consider milk products and whether packs of milk products were deceptively similar. It further had to consider whether conduct amounted to passing off. The court was taken to Lockhart J's decision and the following passage at page 43,467:
“In my opinion, the packs of the applicants and of the respondents are not substantially the same or deceptively similar to each other. In fact, I think they are quite different. There is no real possibility of confusion between the two packs. The fact that both the applicants and the respondents stress that their respective products embody wholesome, natural goodness is not to the point.”
Counsel for the applicant submitted that the decision of Lockhart J is relevant to the extent that in that case there was a finding that the respective packs were not deceptively similar and no real possibility of confusion with the applicant's pack being predominantly brown and the respondent's white. It was submitted that the case in fact reinforces the applicant's case in the present application because in this application there is a possibility of confusion as a result of the colour schemes between the two parties.
Counsel for the applicant also noted that in the Dairy Industry decision of Lockhart J, unlike, it was claimed, the circumstances of the present case, the court found there was little in common between the design and get-up of the two packs. Specific reference was made to the following passage of his Honour's judgment where he states:
“There is little in common between the design and get-up of the two packs. The applicants on their pack and in their advertisements stress that the product of the applicant is "good one". The respondent emphasised its product as "malt 'N' honey". There is no likelihood or reasonable possibility of confusion between the two.”
Counsel for the applicant further referred the court to the decision of Heerey J in Targetts Pty Ltd v Target Australia Pty Ltd (1993) ATPR 41-231 (Targetts). In that case the court had to consider the applicant's claim that it had for many years carried on a retailing clothing and footwear business in Launceston, Tasmania. The respondent, Target Australia Pty Ltd, operated a large number of discount department stores throughout mainland Australia and proposed to commence trading in Launceston near the Targetts' store. It was held in that case in relation to passing off that the existence of a reputation of Targetts in Launceston and the likelihood of deception amongst its customers and potential customers by the use of a deceptively similar name and logo by Target would constitute the tort of passing off action in one of the suits on Targetts. A restraining order was made. It was noted in that case that His Honour referred to the decision of the Federal Court in the Taco decision to which reference has been made earlier. It was submitted that decision was supportive of the applicant's current claim, namely, that there are sufficient similarities between the signage to support the applicant's position.
Counsel for the respondent analysed in some detail the comparative signage and invited the court to conclude there was insufficient similarity for the injunction to be granted. It was submitted that what the applicant is seeking to do in the present case is to obtain a monopoly of the two colours yellow and red or gold and burgundy and the three words "cheapest", "Melbourne" and "cars". It was argued that the applicant should not be permitted to have a monopoly over either the colour scheme or the words.
It was noted that the cases referred to do not involve descriptive words, save, it was conceded, that the use of the word "scoop" in the Prospero case was said to have become descriptive of the applicant's product.
A distinction was sought to be made between descriptive or generic words as opposed to invented words. Reference was also made to the High Court decision in Hornsby referred to earlier in this judgment. Counsel further referred to the decision of Cadbury Schweppes Pty Ltd & Ors v Pub Squash Co Pty Ltd (1980) 2 NSW LR 851 where the court had referred to the relevant extracts of the judgment of Stephen J in the Hornsby case and other decisions and then he went on to state the following at page 859:
“... As always in a 'passing off' action the ultimately critical question was one of fact. The critical question in the case proved to be: were customers or potential customers led, by the similarities in the get-up and advertising of the two products, into believing that ‘Pub Squash’ was the Cadbury-Schweppes product? Or, if no deception be proved, was there a real probability of deception? The trial judge addressed himself to this question of fact, first, when considering the claim in ‘passing off’, and secondly, when stating his conclusions on the alternative claim of unfair trading. …”
It was submitted that a court might be more likely to draw an adverse conclusion against the respondent where it is able to draw an inference that its conduct was deliberate, and, as I understand the respondent's submissions, it is argued that there is insufficient evidence in the present case for the court to draw that conclusion.
Other decisions referred to by the respondent provided examples where a court has refused to grant an application including Irish Distillers Ltd & Os v Smith & Son Pty Ltd & Anor (1986) 7 IPR 509. In particular, the court was referred to the following extracts from the judgment of Jackson J where His Honour states at p. 511 the following:
“It is clear, of course, that some possibility of confusion or uncertainty will not suffice to prove misleading or deceptive conduct (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; 42 ALR 1) and that in deciding the question raised by s 52(1) one must, in looking at a particular section of the public, treat it as including ‘the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations’ (Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202).”
It was submitted in the present case in applying the authorities (including the High Court decision in the Puxu case) the court needs to consider whether or not any confusion or uncertainty is due to misleading and deceptive conduct.
Reference was made to the decision of the Federal Court in Lumley Life Ltd & Anor v IOOF Victoria Friendly Society (1989) 16 IPR 316 where the application was dismissed. It is noted in that case that the court held that intention to mislead or deceive or to pass off is not an essential element in the proof of a breach of s.52 or of passing off. The proof of an intention to mislead, however, may lead the court to infer more readily that there has in fact been conduct which is misleading and deceptive. However, as the court states in that case:
“Such an inference will not be automatically drawn.”
It is noted in that case that the court analysed the use of words "flexi" and "bond", both of which it was held appear to be a descriptive word. The court relevantly states the following at page 322:
“It is, of course, possible for a descriptive word to nevertheless become distinctive by its association with a particular product or producer; Reddaway v Banham [1896] AC 199 (‘Camel Hair Belting"); B M Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 51 ALJR 254; Communication Credit Union Ltd v National Westminster Finance Australia Ltd (1983) 1 IPR 507; (1983) ATPR 40-410. This case is not an example of this proposition.”
In the present case, as I understand the respondent's submissions, the court should likewise find that there is insufficient similarity between the design and signage of both parties' premises and the words used by the respondent are merely descriptive and would not lead to confusion of a kind which in turn may lead the public to associate the respondent with the applicant.
Reasoning
In my view, the applicant has clearly established a reputation for its car yard in the Melbourne metropolitan area, including the south‑eastern suburbs specifically.
It is also clear, and I find, that the applicant has engaged in extensive advertising and including in that advertising is the use of what was formerly a business name and now a trade mark; namely, "Melbourne's Cheapest Cars". Hence, there are three words, namely, "cheapest", "Melbourne" and "cars", used by the applicant initially in a registered business name and then as part of its corporate name and registered trade mark.
A comparative analysis of the photographic evidence, and in particular a comparison between the applicant's signage as depicted in Photograph 1 compared with the respondent's signage as depicted in Photograph 4 set out in the body of this judgment, in my view, having regard to a combination of the words, the size and layout of print and colour schemes, taken in combination would be properly regarded as conduct that is misleading or deceptive or likely to mislead or deceive. In particular, I note the layout of the three words as they appear on the respondent's signage together; namely, "MELBOURNES CHEAPEST CARS". Although those three words are in the context of two separate lines in Photograph 4, I am satisfied that those words, taken together with the colour scheme, which is similar to the colour scheme of the applicant, is likely to mislead or deceive the public. It is important to appreciate that the Court had the benefit of a number of enlarged color photographs which are clearer than some of those reproduced in this judgment. Viewers of this judgment by electronic means should be presented with the color version.
This is not a case where the applicants seek to claim or are indeed entitled to claim a monopoly on any colour scheme or indeed descriptive words. The finding that the design and words used, including words which are now part of the corporate name and trade mark of the applicant, is a finding based on a combination of those words and colour scheme together with the relevant layout and design. The size of the lettering, in my view, when taken together with the actual words and colour scheme is sufficient to find that there would be at least a likelihood that consumers would be misled or deceived. The words "Melbourne's Cheapest Cars" I am satisfied are associated with the applicant's car yard business, and accordingly, provide a basis for relevant misrepresentation.
The words, however, taken alone without the combination of the colour scheme and layout may not necessarily provide an appropriate basis for the relevant misrepresentation either in relation to a passing off action or the action pursuant to s.52 of the Trade Practices Act. I stress it is the combination of the words and colour scheme which on balance
I have found provide a sufficient basis for the contravention as alleged by the applicants. The issue of a distinguishing border around the applicant's sign does not, in my view, assist the respondent's case. That border is incidental to the overall presentation of both the words, colour and design which is an issue in this case. I note, for example, that in the Targetts' case Heerey J did not resist the application for an injunction in circumstances where there was a clear difference between the logos used by the applicant and the respondent. Likewise, in the present case I cannot see a sufficient distinguishing feature of the applicant's signage with the border to lead me to draw a conclusion that in the present case the applicant has not made out the basis for its claim of passing off and/or breach of s.52 of the Trade Practices Act.
I am satisfied on a proper viewing and consideration of the respective signage that members of the public would be likely to believe that there was some arrangement and/or connection between the applicant's established business and the more recent business of the respondent.
Unlike the Dairy Industry case the signage in the present application is substantially the same or deceptively similar leading to possible confusion.
It accordingly follows that an order should be made in similar terms to that sought by the applicant in this application and I will hear the parties in relation to the precise form of the wording and any other matters which arise from this judgment.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 15 September 2004
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