Nickhun Pty Ltd v Grifkam Pty Ltd - [2004] FMCA 994

FEDERAL MAGISTRATES COURT OF AUSTRALIA

NICKHUN PTY LTD v GRIFKAM PTY LTD

[2004] FMCA 994

TRADE PRACTICES – Misleading and deceptive conduct – passing off.

TRADE MARKS – Whether respondent’s mark substantially identical or deceptively similar to applicant’s trade mark – ‘Sunliner’ – ‘Sunlander’.

Trade Practices Act 1974, ss.52, 82, 86
Trade Marks Act 1995, ss.10, 17, 120

Typing Centre of New South Wales Pty Ltd v Northern Business College Ltd (1989) 13 APR 627
FAI General Insurance Co v RAIA Insurance Brokers Ltd (1992) 108 ALR 479
Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302
Faessler v Neale and Others (1994) 20 IPR 1
Shell Co of Australia v SA Standard Oil (Australia) Ltd (1963) 109 CLR 407
Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd & Anor (2003) 204 ALR 90

Applicant:

NICKHUN PTY LTD (trading as Sunliner Recreational Vehicles) (ACN 005 256 468)

Respondent:

GRIFKAM PTY LTD (trading as Sunlander Caravans) (ACN 104 048 384)

File No:

MLG 931 of 2004

Delivered on:

17 December 2004

Delivered at:

Melbourne (by video link to Brisbane)

Hearing Date:

19 October 2004

Date of Last Submissions:

8 November 2004

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr M Goldblatt

Solicitors for the Applicant:

Kahns Lawyers

Counsel for the Respondent:

Mr A Duffy

Solicitors for the Respondent:

Hinterland Lawyers

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 931 of 2004

NICKHUN PTY LTD (trading as Sunliner Recreational Vehicles) (ACN 005 256 468)

Applicant

and

GRIFKAM PTY LTD (trading as Sunlander Caravans)
(ACN 104 048 384)

Respondent

REASONS FOR JUDGMENT

Introduction

In this matter an application was filed on 19 July 2004 by Nickhun Pty Ltd (the Applicant) trading as "Sunliner Recreational Vehicles". The applicant seeks injunctive relief and an account of profits flowing from what was alleged to be passing off of a business associated with that of the applicant by Grifkam Pty Ltd trading as "Sunlander Caravans" (the Respondent).
In its claim the applicant relied as a statutory basis for jurisdiction upon s.52 of the Trade Practices Act 1974 ("the TPA"). Specifically, in terms of remedies it relied upon s.82 and 86 of the TPA and otherwise the accrued jurisdiction of the court to hear a related passing‑off claim.
The applicant subsequently relied upon an amended application filed 19 July 2004. When the matter came before the court on 27 August 2004 orders were made for the parties to file and serve further affidavits to be relied upon and that the trial should proceed on affidavit evidence. The matter was then listed for hearing before the court on 19 October 2004. After a brief hearing the parties were then given the opportunity to provide further written submissions. The applicant had already relied upon an outline of submissions dated 19 October 2004. The respondent relied upon an outline of submissions dated 27 October 2004 with the applicant then providing submissions in reply which were filed on 8 November 2004.
In support of its application the applicant relied upon affidavits sworn by Nicholas James Hunter, general manager of the applicant, sworn 16 July 2004 (exhibit A1), 28 September 2004 (exhibit A2) and 14 October 2004 (exhibit A3). The applicant relied upon an affidavit of Raymond Gerard McCoy sworn 14 October 2004.
In its response filed 25 August 2004 the respondent simply sought an order that the application be dismissed and at the time other orders were sought in relation to change of venue which is now no longer relevant. In support of the response the respondent relied upon an affidavit of James Deakin, managing director of the respondent, sworn 17 September 2004.
It should be noted that in its amended application the applicant seeks to further rely upon an action for the infringement of a trade mark pursuant to s.120 of the Trade Marks Act 1995 (the Trade Marks Act). The claim for relief based upon the Trade Marks Act was that the "Sunlander" mark utilised by the respondent is substantially identical with or deceptively similar to the applicant's trade mark number 487547 for the name "Sunliner" in a device.

Background

The applicant is in the business of manufacturing and distributing recreational travel vehicles throughout Australia and I accept it has an extensive distribution network in Queensland. The applicant was registered in November 1976 and the "Sunliner" trade mark number 487547 has a priority date of 20 May 1988. The trade mark which is exhibit NJH-1 the affidavit of Mr Hunter sworn 16 July 2004, was filed in class 12 which refers to the following products:
Class 12 vehicle, automobile bodies and chassis, motorbuses, car bodies, motor cars, motor coaches, motor campers, motorhomes, campervans, camp trailers, caravans, parts and accessories in this class for the aforesaid, and all other goods in class 12.
In his affidavit sworn 16 July 2004 Mr Hunter notes further that the applicant had established a considerable "goodwill nationally in the recreational vehicle industry and also enjoys a high profile reputation nationally, including Queensland". He claims that the applicant is "one of the largest manufacturers of recreational vehicles across Australia". He gives the following particulars:
(a)the applicant has manufactured and distributed recreational vehicles since 1974 and for the past seven years has sold such vehicles throughout Queensland turning over $6.5 million worth of product in that state alone during the last financial year;
(b)the proprietors of the applicant have used the Sunliner name in a number of company and business registrations over the years, including Sunliner Recreational Vehicles, Sunliner Promotions, Sunliner Sales and Sunliner Camp Mobiles, with the effect of establishing the name in the industry;
(c) the applicant advertises nationally in five monthly magazines: "Caravan World", "Campervan and Motorhome Trailer", "Aussie RV Trader", "Caravan and Motorhome" and "On The Road" in addition to advertising its products via its web sites;
(d) the Sunliner trade mark is clearly displayed on all of its vehicles to be seen by members of the public;
(e) the applicant displays its products at shows and events throughout Australia, including Queensland, the most recent being the Brisbane Caravan Show during June 2004.
Mr Hunter claims that he first became aware of the respondent marketing caravans under the name "Sunlander" when he came across an advertisement in the April-May edition of "Caravan and Motorhome".
It is appropriate at this point to set out examples of the name of the respective parties. The first is the image for trade mark 487547 of the applicant as follows:

The second image is that of the respondent which was part of an advertisement exhibited in Mr Hunter's affidavit sworn 16 July 2004 (exhibit A1) and was marked "NJH-2". The image of the respondent appears as follows:

It is useful to set out the following paragraphs from the Hunter affidavit sworn 16 July 2004 where he deposes:
“6.Due to the similarity in price, function and composition, customers of the Applicant frequently inspect both caravans and campervans/motorhomes when looking to purchase a vehicle in which to travel around Australia. The recreational vehicle industry is a single market and includes campervans, motorhomes and caravans. The vehicles are almost identical in their function, in that they all provide a mobile form of accommodation for the purpose of recreational travel, with the minor variation that the mode of transport is inbuilt in the campervans and motorhomes, a difference which the Applicant sees as negligible. In addition, organisations such as the Caravan Industry Association of Australia Inc., of which the Applicant is a member, represent the interests of both caravan and motorhome manufacturers and distributors.
7.I believe that the auditory and written manifestations of the word Sunlander are not sufficiently different to those of Sunliner for the terms to be readily distinguished by members of the public. I believe that the Respondent has deliberately chosen the term Sunlander with the intention that the two business names will be confused, so as to benefit from the Applicant's high profile in the market place.”
Whether it is necessary for the applicant to assert and/or prove intention on the part of the respondent was an issue agitated at the hearing of this matter. In my view, for present purposes proof of intent is not necessary in the context of this application for reasons which will become apparent.
In his affidavit Mr Hunter further refers to agencies of the applicant and the significant proportion of its business conducted in Queensland and either the potential or reality for confusion in the minds of the consumer. He claims that the applicant is "currently in pre-production of a line of caravans to be badged "Sunliner caravans" and they are to be released in the Queensland market within a matter of weeks.
The applicant's solicitors by letter dated 31 May 2004 demanded the respondent take steps to cease using the business name "Sunlander Caravans" and within 30 days rebrand all caravans displaying the Sunlander logo, if necessary recalling those already sold. The response from the solicitors for the respondent was forwarded by facsimile transmission dated 10 June 2004. In the response the solicitors for the respondent state the following:
(1) Our client is selling a different product (ie caravans, not campervans);
(2) Our client's name and logo are clearly different to that of your clients and easily distinguishable from your client; and
(3) Our client is selling its product in a different territory to your client.
We do not believe that there is any claim by your client that our client's brand name and logo could 'create confusion in the mind of the public'.
…
The respondent in the affidavit of Mr Deakin sworn 17 September 2004 rejected any suggestion of confusion in the marketplace between the name Sunliner and Sunlander. He deposed that Sunliner does not manufacture caravans and that the marketplace for the sale of recreational vehicles in Queensland is substantial, though the share by Sunliner is "very small". He deposed that caravans are a different market to the existing Sunliner range of products and that Sunliner does not have a relevant reputation. He further deposed the name and logo of Sunlander are clearly distinguishable from the Sunliner name and logo. He otherwise denies on behalf of the respondent any suggestion that the respondent has passed its products off as those of the applicant or made any other actionable representation. He claims the first occasion when the brand name Sunliner in connection with recreational vehicles came to his attention was when he received the letter of demand from the solicitors of the applicant to which reference has already been made dated 31 May 2004.
He refers to the reason for the choice of the name "Sunlander" as being derived from a Queensland train which runs along the coastline and that that name was chosen from a marketing perspective. He claims that in the 18 months of retailing caravans the respondent had never been asked about Sunliner and there has never been any confusion about the brand names.
Mr Hunter by way of reply to the affidavit of Mr Deakin stated the applicant has held back the release of its Sunliner range of caravans until early 2005 in order to maximise the impact of its launch based on seasonal factors. He noted it has already advertised its Sunliner caravans range as "soon to be released" in national magazines. He refers to the recreational vehicle industry as being a "single market" and otherwise referred to web-based form for advertising whereby "recreation vehicles" defined as "any form of living accommodation that is, or can be combined with a vehicle" and included in the definition is "motorhomes, bus conversions, campervans, fifth wheelers, caravans, pop-tops, slide-ons, rooftop campers, camper trailers and trailer tents" (see exhibit NH10 to the affidavit of Mr Hunter sworn 28 September 2004).
Further, Mr Hunter deposes that manufacturers and distributors of motorised and non-motorised recreational vehicles advertise in the same industry publications, attend the same shows and exhibitions and are members of the same associations referred to in his earlier affidavit.
Mr Hunter claimed in his affidavit that the applicant has built up its profile by contributing to the caravan industry Australia national marketing fund and has been a member of the Caravan Trades and Industries Association since 1999 with Mr Hunter serving on the association's board from 2000 to 2004.
Mr Hunter specifically refers to exhibit NH2 of his first affidavit and notes that the respondent promoted itself as trading as "CarMart caravans". Mr Hunter further exhibits as exhibit FJH14 to his affidavit sworn 28 September 2004 a copy of a business name extract which indicated that the respondent had only registered "Sunlander Caravans" as a business name in September 2003.
In his further affidavit sworn 14 October 2004 Mr Hunter seeks to establish the profile of the applicant by exhibiting correspondence from either suppliers or customers and deposes that a proposed manufacturing facility of the applicant under consideration is at Kawana Junction in Queensland which he asserts is approximately 35 kilometres from the respondent's premises in Morayfield.
The applicant further relied upon the affidavit of Raymond Gerard McCoy sworn 14 October 2004 (exhibit A4). Mr McCoy is an employee of Brisbane Motor Camper Centre and an agent of the applicant distributing the applicant's "Sunliner" brand of recreational vehicles in all areas of Queensland and from interstate. He deposes that in July 2004 he received a number of telephone calls from people inquiring about "Sunliner" caravans. He was aware the applicant intended to introduce a line of caravans onto the market and on the basis of the calls assumed it had already done so. He made an inquiry with the applicant as to whether Brisbane Motor Camper Centre would be offered the opportunity to sell Sunliner caravans. A fax dated 15 July 2004 from Mr McCoy to Mr Hunter is exhibited to the Hunter affidavit sworn 16 July 2004 (exhibit NJH3) and in part states the following:
“COULD YOU PLEASE DISPELL MY CONFUSION. HAVE YOU OPENED A CARAVAN OUTLET AT CABOOLTURE? SUNLINER OR SUNLANDER? ARE SUNLINER CARAVANS GOING TO BE OFFERED TO B. M. C. C?"
I HAVE HAD A NUMBER OF PHONE CALLS NOW ON SUNLINER CARAVANS, SO I AWAIT YOUR REPLY.”
Mr McCoy deposes that he was subsequently advised by Mr Hunter that the applicant had not yet released its new line of caravans and that Mr Hunter was aware of an outlet in Morayfield, namely CarMart Caravans which distributed caravans branded with the name "Sunlander".

The issues

Passing off and/or breach of section 52 of the Trade Practices Act

The applicant relied upon the background of its business both in terms of use of the name "Sunliner" as a trade mark and in the sale and distribution of its recreational vehicles, combined with the annual turnover and market activities, particularly in the state of Queensland. Reliance was placed upon the advertising and business activities set out earlier in this judgment based primarily upon the Hunter affidavits. It was submitted that caravans are not in a different market to the existing "Sunliner" range of products. In support of the submissions concerning passing off and/or breach of s.52 of the TPA, it was submitted that the court should note that the trade mark "Sunliner" is an invented word and not in any way generic or descriptive of the products being sold by the applicant or the respondent.
A key issue in these submissions was that the word "Sunlander" is substantially identical and deceptively similar to the applicant's mark "Sunliner". It was argued that the respondent could have utilised an infinite number of other marks to brand this particular line of products. By choosing a mark so close to that of the applicant's, it was argued the respondent intended to represent to consumers an association with the applicant's business. In the alternative, even if no such intention existed it was argued the closeness between the two marks would lead and has led people into believing there is a connection in the course of trade between the two businesses.
Whilst relying upon the trade mark as part of the evidence, it was noted in submissions by the applicant that the test in relation to the trade mark issue is different to the test for passing off or breach of the TPA. It was argued the applicant has made out the elements to establish a case in passing off. The representation is the use of the mark "Sunlander" and the question of whether that constitutes unfair trading is a matter for the court. It was argued that the confusion as set out in the evidence would inevitably lead to a loss of sales by the applicant in respect of people believing they are buying the applicant's product but in fact buying a product of the respondent. It was argued a claim for breach of s.52 of the TPA has also been made out and there is evidence of actual or likely damage to the applicant's business as demonstrated in the evidence (see Typing Centre of New South Wales Pty Ltd v Northern Business College Ltd (1989) 13 APR 627; FAI General Insurance Co v RAIA Insurance Brokers Ltd (1992) 108 ALR 479).
The respondent submitted that the passing off and trade practices claims both appear to rest upon the same basis as a trade mark infringement claim. For present purposes I am prepared to accept that they at least have the same evidentiary basis, though I accept that as a matter of law different tests apply in relation to the different causes of action.
I note and incorporate the authority in relation to passing off referred to by the respondent of Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 308-9 where Lockhart J states the following:
“29.That the underlying rationale of the tort of passing off is to prevent commercial dishonesty finds further support from Lord Diplock's speech in the Advocaat Case where his Lordship described the question arising in that case as "essentially one of legal policy" (at 739) and he found that the facts disclosed "a case of unfair, not to say dishonest, trading of a kind for which a rational system of law ought to provide a remedy to other traders whose business or goodwill is injured by it" (at 740).
30A passage from the speech of Lord Diplock has come to be regarded as the authoritative statement of the necessary elements to establish passing off. His Lordship said (at 742):
"My Lords, A.G. Spalding and Bros v A.W. Gamage Ltd and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him,(4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of a trader by whom the action is brought or (in a quia timet action) will probably do so."
The other members of the House concurred in this statement as they did with the speech of Lord Fraser of Tullybelton. The speech of Lord Fraser contains at 755-6 a narrower statement of the cause of action in these terms:
"It is essential for the plaintiff in a passing off action to show at least the following facts:
(1) that his business consists of, or includes, selling in England a class of goods to which the particular trade name applies;
(2)that the class of goods is clearly defined, and that in the minds of the public, or a section of the public, in England, the trade name distinguishes that class from other similar goods;
(3) that because of the reputation of the goods, there is goodwill attached to the name;
(4) that he, the plaintiff, as a member of the class of those who sell the goods, is the owner of goodwill in England which is of substantial value;
(5) that he has suffered, or is really likely to suffer, substantial damage to his property in the goodwill by reason of the defendants selling goods which are falsely described by the trade name to which the goodwill is attached."

The respondent argued that the elements set out in the decision of Lockhart J have not been made out in the present case. There was no evidence of commercial dishonesty or unfair trading in the present case, nor any evidence of any relevant representation on the part of the respondent. Further, it was argued whilst there may be some suggestion about the possibility of loss or damage by the respondent's use of its registered business name or logo, there is simply no satisfactory evidence from which the requisite degree of satisfaction can be drawn that damage is likely.
The respondent argued that the trade practices claim is not made out as there is no relevant misleading or deceptive conduct. There is no evidence, according to the respondent's submission, of reliance by or inducement of any person based upon any conduct and there is no evidence of actual or likely damage caused by any such conduct.

The trade marks claim

The applicant submits the issue of intention is not relevant as to whether the respondent's mark is substantially identical or deceptively similar to the applicant's trade mark and accordingly infringes the applicant's trade mark pursuant to s.120 of the Trade Marks Act.
It is useful in considering this issue to set out s.120 of the Trade Marks Act which provides as follows:
“120.When 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.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(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.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(3) A person infringes a registered trade mark if:
(a) the trade mark is well known in Australia; and
(b) the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(i) goods (unrelated goods) that are not of the same description as that of the goods in respect of which the trade mark is registered (registered goods) or are not closely related to services in respect of which the trade mark is registered (registered services); or
(ii) services (unrelated services) that are not of the same description as that of the registered services or are not closely related to registered goods; and
(c) because the trade mark is well known, the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the registered owner of the trade mark; and
(d) for that reason, the interests of the registered owner are likely to be adversely affected.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: For well known in Australia see subsection (4).
Note 4: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(4) In deciding, for the purposes of paragraph (3)(a), whether a trade mark is well known in Australia, one must take account of the extent to which the trade mark is known within the relevant sector of the public, whether as a result of the promotion of the trade mark or for any other reason.”
It is relevant to note that in deciding whether a mark is substantially identical to a registered mark a question of fact is involved and the two marks must be compared side by side. It is useful to set out the principles as applied by Drummond J in Faessler v Neale and Others (1994) 20 IPR 1 where at page 6 his Honour applies the test from Shell Co of Australia v SA Standard Oil (Australia) Ltd (1963) 109 CLR 407 in the following extract:
“The test here, again taken from Windeyer J's judgment in Shell Co. of Australia Ltd., at p. 415, is:
‘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 ... 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 have from the defendant's (get-up)."
In the same judgment Drummond J goes on to state the following:
“15.Insofar as the applicant submitted that he has an arguable case of infringement because of the respondent's use of what the applicant said was an essential feature of his registered mark, viz., the words "St. George Grapes", the applicant faces real problems, quite apart from the express limitation on the rights conferred on him by registration of his mark. As Fitzgerald J emphasised in Angoves Pty. Ltd. v Johnson (1982) 43 ALR 349 the reason why a mark that incorporates what is held to be an essential feature only and not the whole of a registered mark will still infringe the registered mark is that confusion is likely to result: see page 371 and 372. At page 372, after referring to de Cordova v Vick Chemical Co., his Honour said:
"However, it is of importance to observe that the reason given in that case why use of the mark which incorporated the essential feature of a registered trade mark constituted an infringement was that confusion was likely; in the language of s.62(1) the mark held to infringe was 'deceptively similar'.
The relevant definitions which appear in s.6 of the Trade Marks Act are as follows:
"deceptively similar" has the meaning given by section 10.
"registered trade mark" means a trade mark whose particulars are entered in the register under this act.
"sign" includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.
"trade mark" has the meaning given by section 17.
Section 10 of the Trade Marks Act provides as follows:
“10.Definition of deceptively similar
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.”
Section 17 of the Trade Marks Act provides as follows:
“17.What is a trade mark?
A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.”
There was some argument in this matter about whether the respondent's sign is substantially identical with the applicant's trade mark, though in my view applying the "side by side" test as set out in the Shell Co of Australia Ltd case and other decisions it is clear to me that the two signs which have been reproduced earlier in this judgment could not be claimed to be "substantially identical". The get-up is different and indeed there are other dissimilarities in terms of the print. The more significant issue, however, in relation to the trade marks matter, in my view, appears to relate to the question of whether or not it could properly be claimed pursuant to section 10 of the Trade Marks Act that the sign of the respondent is "deceptively similar" to the trade mark.
The court was referred to the decision of Bennett J in Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd & Anor (2003) 204 ALR 90 where in that case in dealing with the issue of whether the respondent's sign is "deceptively similar" the court states the following:
“64.Counsel accepted that the onus is on Sportswear to establish deception or confusion and properly conceded that, if I am left unsatisfied or unsure as to whether or not confusion is likely to emerge, the onus is not satisfied and the THORPEDO mark should be registered. He did, however, emphasise that there was no need to establish actual confusion and that the standard was a `reasonable likelihood'.
…
72 The question of deceptive similarity involves a number of different and additional considerations. The question is whether the normal use of the THORPEDO mark in relation to the class of goods specified in the application would be likely to cause deception and confusion in the face of Sportswear's normal use of its marks.
73 A different comparison is made than that for substantial identity. Here the question is one of impression based on recollection of the mark (Shell at 415). While it is not necessary to prove actual deception, neither is a mere possibility of confusion sufficient: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954 91 CLR 592 (`Southern Cross'); there must be real, tangible danger of confusion occurring (Woolworths). It is sufficient if, by reason of use of the mark, a number of people would wonder if two products came from the same source (Southern Cross). In Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 (`Woollen Mills'), Dixon and McTiernan JJ apparently considered both the visual and aural use of the marks there in question; the reference by their Honours to the effect produced in the course of the ordinary conduct of affairs would include aural use, where the evidence was that the mark was applied to goods that were regularly referred to orally by name (at 658).
74 The task is one requiring the application of common sense and impression, which can depend on a combination of visual and aural impression and the estimation of the effect likely to be produced in the ordinary conduct of affairs (Anheuser-Busch Inc v Budejovicky Budvar (2003) 56 IPR 182 at 217.
75 I was referred to a number of cases in which words were compared and conclusions drawn as to whether or not there was deceptive similarity. It is, of course, helpful to see the process of reasoning applied in each case but, of necessity, much turns on the individual words under consideration. It is not necessarily helpful to trawl through decided cases to examine how different decision makers have formed conclusions, based on their own impressions, as to whether or not confusion or deception arises when two specific words are compared visually and aurally. In this regard, I refer to the words of Windeyer J in Re Bali Brassiere Co Inc's Registered Trade Mark and Berlei Limited's Application (1968) 118 CLR 128 at 139:
`Cases were cited to me from passages in judgments dealing with marks held to be, or held not to be, by reason of similarities, deceptive or confusing. I have read these cases, and others. I do not think I need discuss them. The governing principles are not in dispute; and little is to be gained by the quotation of enunciations and elaborations of them in other cases. The difficulty is always in their application to the facts of the case in hand.'
76 Much depends on the words themselves, their origins and meanings and the surrounding circumstances of their use. What an examination of the cases where similar words are compared visually and aurally show, is that each such comparison depends on matters such as the pronunciation of the words, their meaning and the categories of goods to which the marks are to be applied.
77 There is little dispute as to the principles to be applied although it must be remembered that previous decisions frequently turned on the question of onus, which has changed under the Act.
…
79The test of `resemblance' for the purposes o s.6(3) of the the Trade Marks Act 1955 was summarised by Lindgren J in Gardenia Overseas Pte Ltd v The Garden Co Ltd (1994) 29 IPR 485 (`Gardenia') at 493:
`"Resemblance" with s.6(3) of the [1955] Act involves an assessment by the court of the visual and aural impressions made by the two marks when compared, but the likelihood of deception or confusion referred to in that subsection involves an assessment of what would be the probable visual and aural impressions on customers and potential customers which would arise if the marks were being used properly and within the scope of the registration, that is to say, it involves the concept of "notional normal and fair use."'
80 This was approved by the Full Court in The Coca-Cola Company v All-Fect Distributors Ltd (t/as Millers Distributing Company) (1999) 47 IPR 481 at 496 in respect of the Act. In Gardenia, Lindgren J found sufficient difference in the words `garden' and `gardenia', including differences in `syllabic structure and pronunciative emphases' of the respective words, bearing in mind that the test of aural impression is not one of supposing the two words are said one after the other. I have already noted the slight difference in `pronunciative emphasis' of `Thorpedo' and `Torpedoes'. His Honour concluded in Gardenia that it may be possible that a person would be caused to wonder but that there was no `real tangible risk' of confusion occurring.”
It was submitted on behalf of the respondent that applying the test set out in the decision of the court in the Torpedoes Sportswear case that there is no deceptive similarity between the respondent's logo and the applicant's trade mark. It was further argued that the applicant does not have any extensive distribution network in Queensland. It was further argued that there was no evidence that the trade mark had become synonymous with recreational vehicles manufactured by the applicant and it was noted that Mr Hunter for the applicant when cross‑examined referred to the applicant having a model name "Benetton". It was argued that Mr Hunter seemed reluctant to state whether or not "Benetton" was a trade mark of the applicant. It was argued that despite suggestions that the applicant was seeking to negotiate the establishment of a manufacturing facility in Queensland, that the present state of the market is that the applicant is what is described as being "a long way from manufacturing and distributing caravans". The evidence of the applicant suggest that it is currently "in pre-production of a line of caravans to be released" and therefore any suggestion about confusion between the name had to be viewed in that context.
Drawings claimed to be plans to manufacture a caravan (exhibit NJH9 to the Hunter affidavit sworn 28 September 2004) were noted to bear the dates 19 May 2004 and 24 August 2004. It was submitted they appear from a casual observation to be what might be described as "very preliminary drawings at best".
The respondent criticised the evidence concerning confusion in the marketplace and noted that the evidence of Mr McCoy did not refer to a potential customer but rather that he had received some phone calls "on Sunliner caravans". The chronology of correspondence was raised as an issue in relation to the correspondence from Mr McCoy

post-dating correspondence from the respondent's solicitors to the applicant's solicitors. It was submitted that the effect of McCoy's evidence would appear to be that it is well known the applicant does not manufacture caravans as he appears to express surprise at the fact that the applicant might already be doing so, hence his letter referred to earlier in this judgment.
It was argued that Mr Deakin in his sworn evidence indicates he has not received any calls from customers and no customer has come forward to provide evidence of having made an inquiry or complaint or indeed having any confusion about the matters which are relevant to the application. No explanation is offered as to why no customers have been brought forward to give that evidence. It was argued therefore that the inference is that either there are no such customers or there were no such inquiries made or otherwise that evidence that any of those customers may give would not assist the applicant's case.
It was further submitted that there is no evidence of any potential sales loss by the applicant by reason of any alleged confusion or any damage to the reputation of Sunliner vehicles by reason of any perceived association with the respondent. There was no comparative analysis of the 6.5 million turnover claimed to have been achieved by the applicant in the last financial year with other distributors of similar vehicles.
It was claimed that the only argument put forward in support of the applicant's allegation that the word "Sunliner" and "Sunlander" are substantially identical or at least deceptively similar would appear to be alleged confusion. In the circumstances it was submitted there is no "serious evidence of confusion".

Reasoning

Passing off and trade practices claim

In my view, applying the principles in relation to passing off and the relevant law in relation to any breach of the TPA requires the court to at least consider whether or not the conduct of the respondent in using the name "Sunlander" itself would constitute either passing off and/or a breach of s.52 of the TPA. In my view, the image for the trade mark used by the applicant and its get-up in the various forms of advertising exhibited before the court could not be claimed to be similar in terms of get-up to the signage and name as used by the respondent.
The more important issue, in my view, is whether the words themselves, that is, the spelling, which I note involves only two additional letters in the word "Sunlander", compared with the word "Sunliner, namely the letters "A" and "D". Further, I am satisfied and find that the two words have a similar sound. It is the combination of the spelling and the sound of the words which in my view provide a basis for finding that there is a similarity of a kind which provides a basis upon which the court finds both for the purposes of passing off and a breach of s.52 of the TPA that there has been a misrepresentation in the course of trade by the respondent to at least prospective customers of the applicant where it will be reasonably foreseeable that this may injure the business or goodwill of the applicant. It is not necessary to advance the case further to establish current extensive damages, but rather that in all probability, and I so find, that such damage may occur in the future.
A significant issue, however, in the present case is whether or not the applicant currently operates an extensive distribution network in Queensland. In my view, it is established, sufficiently for the present purposes, by the applicant that it does have an extensive distribution network across Queensland and I am satisfied that the turnover of $6.5 million for the last financial year of itself is sufficient evidence that it has a market presence in relation to recreational vehicles, both in Queensland and, as deposed, nationally. I make that finding based not simply on the annual turnover in the last financial year but also based upon the evidence of the applicant's extensive advertising and attendance at various trade shows.

In my view, the arguments advanced for and on behalf of the respondent that the applicant not yet being a producer of caravans or being what is described as "a long way from manufacturing and distributing caravans" is misconceived. I accept the submissions by the applicant that in fact the recreational vehicle market is a market which clearly covers caravans, and to that extent, a brand name in that market for recreational vehicles having been established as being a market in which the applicant is a significant participant is sufficient for the present purposes of the claim made by the applicant against the respondent. The mere fact that the applicant has not yet pursued the manufacture and distribution of "caravans" in the recreational vehicle market does not, in my view, detract from the submissions made for and on behalf of the applicant which I accept that the applicant conducts a significant portion of its business in Queensland selling recreational vehicles both directly and through agents. It is clear to me that the registered trade mark "Sunliner" of the applicant in respect of class 12 referred to earlier in this judgment provides further evidence which assists the applicant in establishing its passing off and/or trade practices claim.
Although it was argued by the respondent there is no evidence of any relevant representation on the part of the applicant , it is my view that the representation may be constituted by the use of a logo and name on a product being only one of a number sold and distributed by the respondent which of itself may be capable of constituting a representation.
Whilst it is true that there is little current evidence of direct damage, it is not necessary in an application for injunctive relief in the present case that the applicant should wait for the launch of any new product and wait to determine whether the confusion in the marketplace is of a kind that causes damage to its business. It is sufficient that it demonstrates as a result of the misleading and deceptive conduct and/or passing off, which I found exists as a result of the similarity in the name, that there would be potential for damage arising directly out of the conduct of the respondent. It is clear to me from the chronology of events starting with the registration of the trade mark and the more recent registration of the business name by the respondent that the applicant has established in the marketplace its name over a longer period of time and to a greater extent than the respondent which appears to be a relatively new marketplace participant.
It is not necessary, in my view, for the applicant to establish an intention on the part of the respondent. In the circumstances I am satisfied that the mere use of the mark "Sunlander" given its similarity to "Sunliner", which I have found, is sufficient to constitute unfair trading. I am further satisfied that although there is obviously not a great deal of evidence as to market confusion, given the applicant does not yet distribute caravans, there is sufficient evidence of confusion, in my view, to lead the court to conclude that the conduct of the respondent constitutes both passing off and/or misleading and deceptive conduct for the purpose of the TPA. Again, in my view, it is not necessary for an applicant in these circumstances to simply wait for many months or perhaps years to determine whether confusion really exists.
Whilst the proceedings may in one sense be regarded as pre-emptive, there is a public benefit in an application of this kind being brought to the notice of courts at an earlier rather than later stage. That benefit is to ensure that any confusion is minimised, and of course there is a direct benefit to a respondent as any damages now sought to be claimed likewise would be minimal. However, the mere fact that damages are minimal does not preclude the court from reaching a finding, as it has in this case, that the conduct of the respondent in the use of the mark "Sunlander" constitutes misleading and deceptive conduct and/or passing off.

Trade marks claim

It is probably not necessary for me to formally make a finding in relation to the trade mark claim. However, out of an abundance of caution and in the event that I am in error in relation to my finding concerning the passing off and/or trade practices claim, it is appropriate that I address the issue of the extent to which it might be claimed that the use of Sunlander by the respondent can be regarded as a breach of section 120 of the Trade Marks Act. In the present case I do not accept, as indicated earlier, that the respondent's logo could be regarded as substantially identical with the trade mark of the applicant. I do find, however, that consistent with my earlier findings as to the actual word used and its sound that it may be regarded as deceptively similar to the trade mark of the applicant. I make that finding given the court is dealing with a single word with similar spelling and, as I have indicated already, very similar sound. It is a word to be affixed to a particular recreational vehicle product which in the case of the respondent's current market is a "caravan" and in the case of the proposed market for the applicant the exact same item.
In all of the circumstances I am satisfied that there is sufficient similarity to lead to what might in my view be an effect or impression created in the minds of customers that the products produced by both parties are in fact produced by one party. That arises by both the spelling of the words and, as indicated, their sound. I am satisfied that persons of ordinary intelligence and memory in all probability would find the two names confusing given that both will be applied to the recreational vehicle market, which in my view is the relevant market in this application. There would be confusion in relation to the respective caravans produced by the respondent and soon to be produced by the applicant accepting, as I do, the evidence of the applicant of the proposed launch of the new product as part of its range of recreational vehicles.

Conclusion

In finding the causes of action made out on behalf of the applicant

I stress that my finding is one not simply of a mere possibility of confusion but rather what I have found having analysed the two words, including their sound and spelling, that there is in fact a real and tangible danger of confusion occurring. Whilst this may only be a matter of impression and recognising the difficulty in making what might be described as an aural comparison, I am satisfied on the material before me that the applicant's claim has been established in relation to each and every cause of action set out in the amended application.
In the circumstances where the respondent may be described as a new entrant to the recreational vehicle market in Queensland and elsewhere and having found that that market is the relevant market in which the applicant has already established a significant ongoing presence with the imminent introduction of a "caravan" line of products, it is my view that the injunctive relief sought by the applicant should be granted.

I shall consider the precise wording of the injunctive relief after hearing submissions from counsel in relation to that matter and any other matters arising from this judgment.

I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 17 December 2004