Nylex Corporation Ltd v Ogden Industries Pty Ltd

[1986] FCA 573

523- (NOT FOR DISTRIBUTION)

IN THE FEDERAL COURT OF AUSTRALIA	) )
VICTORIA DISTRICT REGISTRY	) VG No. 374 of 1986
1
GENEFfAL DIVISION	)
)
BETWEEN:

N Y L M CORPORATION LIMITED Applicant

and

OGDEN INDUSTRIES PTY LTD Respondent

MINUTES OF ORDER

m: Woodward J.

DATE: 9 December 1986

PLACE: Melbourne

THE COURT ORDERS THAT:

1. The notice of motion be dismissed with costs

2. The directions hearing be adjourned to 19 December 1986.

(m: Settlement and entry of orders I s dealt with by 0.36 of

the Federal Court Rules).

IN THE FEDERAL COURT OF AUSTRALIA	) )
VICTORIA DISTRICT REGISTRY	)
GENERAL DIVISION
BFIWEEN:

NYLEX CORPORATION LIMITED Applicant

and

OGDEN INDUSTRIES PTY LT0 Respondent

m: Woodward S.

m: 9 December 1986

PLACE: Melbourne

-

REASONS FOR JUDGMENT

This I s an application for Interlocutory injunctions

arising from the way in which the respondent labels coils of

garden hose, with fittings attached, which It is presently selling

in the course of its business.

The respondent is a company which sells, under the trade

name Neta, brass hose fittings among other things. In order to

increase its share of the market it decided that, in the present

season, It would sell some hoses with the fittings attached.

For some years it has used green and gold as its

preferred colours for advertising purposes, and most of its

products are either a natural brass colour or painted in a similar

- 2 -

colour. It is therkfore understandable that it decided to use a

green relnforced hose wlth gold strlpes along it and brass fittings attached, and to call the complete hose 'Neta Gold'. I do not know whether it was influenced, in deciding on the gold stripe, by the fact that he applicant had for several years been

successfully marketing a green reinforced hose with similar gold

stripes.

As it began to promote this new product to the trade, in

about April this year, it learned for the first time that the

applicant was also proposing to highliqht the word 'Gold' in its

sales campaign by using the expression 'Premier Gold'.

The respondent took advice from a firm of patent

attorneys, a5 a result of which it decided not to proceed with its

plan for a hose with a gold stripe, but to use a plain green

reinforced hose instead. However it saw no reason to resile from

its decision to use the name 'Neta Gold'. The only other decision

it had to make was whether to go ahead with the use of labels,

\

which it had had printed, which showed a hose with a gold stripe.

It decided to use the stocks it had, before changing to a fresh

label which, presumably, will show a plain green hose. It will

certainly not show a hose with gold stripes.

The result is that, until now, the respondent's hoses

have been sold with a label attached containing the words 'Neta

Gold' in large letters, a certain amount of written information

- 3 -

and a picture of a green hose with a gold stripe. It is

immediately obvious, because the hose is not wrapped in any	way,
that the hose itself bears no stripes.

There is evidence before me that the stocks of labels

showing the gold-striped hose are almost exhausted, though I was

not informed how many of them are attached to hoses	in the
respondent's stores.

Counsel for the respondent stated formally to the Court

that "the respondent does not intend hereafter to manufacture OK

sell a garden hose bearing a gold stripe". This served to clarify

any possible ambiguity in the affidavit filed on behalf of the

respondent, in which its Sales and Marketing Manager said, "In

late June I decided that it was desirable to have a hose which did

not have any stripes but that the colour	of the hose should remain
green".

The action which the applicant has brought against the

respondent is based upon the expectation	that the respondent would
be marketing a hose with a gold stripe.	The only reference In the

application or statement of claim to the use of the word 'gold' in

labelling, arises in the context of the use	of (3old stripes on
hoses.

The relief claimed in the notice of motion before me is

also directly related to the use of a gold-striped hose. When

this was pointed out by counsel for the respondent in his final

- 4 -

address, counsel for the applicant sought to amend the notice	to
add a claim for relief In these terms

"That the Respondent ... be restralned untll

the hearing of this proceeding or until further

order from .... manufacturing, selling and offering	to sell whether by way of wholesale or retail
anywhere in Australia .... green garden hose under
or by reference to the name 'Gold' . . . . ' I
Counsel for the respondent objected to the amendment on

the ground that it raised a different case, in which the appllcant

was claiming, in effect, a monopoly in relation to the word 'gold'

in respect of all garden hoses.

I am prepared to allow the amendment to the notice of

motion because I don't believe any injustlce is thereby done to the respondent, the relevant issues having been fully argued, and it is obviously desirable to resolve all issues as fully as possible at this stage.

In a recent decision (unreported, 25 November 1986) in

the related cases of Nvlex Corporation Ltd v Sabco Ltd (VG 331 of

1986) and Nvlex Corporation Ltd v Dawn Plastics Ptv Ltd (VG 366 of

19861, I found that the applicant could ultimately succeed in

actions against competitors marketing a green reinforced hose with

gold stripes, but its case was not strong because of distinctive

labelling. I held, while expressing some doubts, that there was a

serious question to be tried.

However, in the present case I have no doubts. It is my

clear view that the applicant has no prospect of success. It was

only beginning to use the brand name 'Premier Gold' at about the

- 5 -

same time as the respondent was launching 'Neta Gold'. It had previously, over several years, referred in Its advertising to its 'gold strlpe' but It could not possibly show that it has already

acquired a reputation in the single word 'gold' associated with

hoses. 'Neta Gold' is nothing like 'Premier Gold', and the

separate brand names 'Neta' and 'Nylex' are both well established

and clearly shown on their respectlve hose labels.

I do not believe any potential purchasers could be

misled or deceived by the label on the respondent's hoses. There

is no serious issue to be tried.

The question of convenience therefore does not arise.

If it did I would resolve it in favour of the respondent because

of the trouble it would cause - at a very important and difficult

time of the year - to recover and relabel whatever hoses are still

in the respondent's control. Further, the respondent has based

its marketing campaign for the season on the name 'Neta Gold' and,

for reasons which I gave in the 25 November decision (above), I

think it is best, in cases such as these, to allow competition

between the parties to take its course.

The notice of motion should be dismissed with costs and the directions hearing adjourned to 19 December 1986.

- 6 -

I certify that the five (5) preceding pages are a true

and accurate copy of the

Reasons for Judgment herein	of
The Hon Mr Justice Woodward

u Associate

Dated: 9 December 1986

Counsel for the Applicant: Mr J.G. Larkin QC & Mr M.W. Shand

Solicitors for the Applicant: Messrs Clayton Utz

Counsel for the Respondent: Mr A.J. Myers

Solicitors for the Respondent: Messrs Darvall McCutcheon