RJB Wolfe Pty Ltd v Mornington Peninsula Eye Clinic Pty Ltd
[2019] VSC 27
•8 February 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S ECI 2018 02738
| RJB WOLFE PTY LTD (ACN 006 514 290) (TRADING AS PENINSULA EYE CENTRE) | Plaintiff |
| v | |
| MORNINGTON PENINSULA EYE CLINIC PTY LTD (ACN 006 514 290) (TRADING AS MORNINGTON PENINSULA EYE CLINIC) | First Defendant |
| EDWARD ROUFAIL | Second Defendant |
| ANTON AURET VAN HEERDEN | Third Defendant |
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JUDGE: | Sifris J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 16 to 17 January 2019 |
DATE OF JUDGMENT: | 8 February 2019 |
CASE MAY BE CITED AS: | RJB Wolfe Pty Ltd v Mornington Peninsula Eye Clinic Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2019] VSC 27 |
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TRADE PRACTICES – Misleading or deceptive conduct – Passing off – Use of name ‘Mornington Peninsula Eye Clinic’ – Established business called ‘Peninsula Eye Centre’ – Whether defendants made false representation as to existence of a connection or affiliation with the business of the plaintiff – Where business names use descriptive or functional terms – Plaintiff had not established and maintained distinctive reputation in its business name – Ophthalmologists, optometrists, general practitioners and patients are not likely to be misled into believing that practice of first defendant is associated with that of the plaintiff – Competition and Consumer Act 2010 (Cth) Sch 2 s 18.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | K Anderson | Patrick & Associates |
| For the First and Second Defendants | J Samargis | Moray & Agnew |
| For the Third Defendant | J Samargis | Kennedys |
HIS HONOUR:
Introduction
The plaintiff, a company associated with Dr Richard Wolfe (Dr Wolfe), a leading ophthalmic surgeon, provides a comprehensive range of ophthalmic services under the business name Peninsula Eye Centre. Peninsula Eye Centre was established by Dr Wolfe over 30 years ago in the Mornington Shire.
The first defendant, a company associated with Dr Edward Roufail (Dr Roufail) and Dr Anton Van Heerden (Dr Van Heerden), both ophthalmologists and vitreo-retinal surgeons, and the second and third defendants respectively, has recently established a competing ophthalmology business known as Mornington Peninsula Eye Clinic. Both practices are located on the Nepean Highway, Mornington within a kilometre of each other.
Dr Wolfe complains that the names are similar and apt to confuse. He wants Drs Roufail and Van Heerden, who both at times operated at his surgery, to cease using the word ‘Peninsula’ in their trading name. He is content for the phrase ‘Mornington Eye Clinic’ to be used and contends that the geographical or generic word ‘Peninsula’ after ‘Mornington’ is misleading and apt to confuse.
The plaintiff claims that the defendants have engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of s 18 of the Australian Consumer Law, being Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL). A further claim for passing off is also made.
On 13 December 2018, I declined to grant any interim relief to the plaintiff and fixed the matter for trial on 16 January 2019. Affidavits and submissions were filed, and the trial proceeded on 16 January 2019.
Relevant background
The background facts and matters deposed to in the various affidavits filed, are to a great extent irrelevant and go well beyond the issues in the case. Relevant facts will be referred to where appropriate and necessary.
Peninsula Eye Centre relied on the following affidavits –
(a) Affidavits of Richard James Bowman Wolfe sworn 12 December 2018 (Wolfe 1), 24 December 2018 (Wolfe 2) and 14 January 2019 (Wolfe 3);
(b) Affidavit of Stephen John Bambery sworn 21 December 2018.
Mornington Peninsula Eye Clinic relied on the following affidavits –
(a) Affidavit of Edward Roufail sworn 10 January 2019;
(b) Affidavit of Anton Auret Van Heerden sworn 10 January 2019;
(c) Affidavit of Richard Mark Midgley sworn 11 January 2019.
All witnesses (other than Midgley) were cross examined.
Peninsula Eye Centre
Peninsula Eye Centre commenced trading in 1987. At this time there were two other ophthalmic surgeons in the Mornington Peninsula Shire region, and a small number of other practitioners were seeing patients in the district one day a week. From its inception it has been known as, and has maintained and registered the business name, ‘Peninsula Eye Centre’. Prior to the registration of the first defendant’s business name, none of the other clinics in the area have ever used the word ‘Peninsula’ in their name.
Since 1987, Peninsula Eye Centre has grown, in terms of its size, staff, and number of patients. In 1987, only one doctor practised from the clinic (in addition to four other staff). Now eight doctors practise there (in addition to around 15 other staff). It is, presently, the largest provider of ophthalmic services in the Mornington Peninsula Shire, having performed 13,807 services for patients in 2018.
The practice operates from 937 Nepean Highway, Mornington five days per week between the hours of 8:00 am and 5:00 pm. It is located next to the Beleura Private Hospital. The plaintiff is the sole owner of the business premises, which includes a building from which the clinic conducts its daily operations and small carparks located adjacent to the building on the north-west and south-east sides of the building.
Patients come by referral or directly (that is, without a referral). Most referrals come from local optometrists and, to a lesser extent, general practitioners. Peninsula Eye Centre regularly holds continuing professional development events and seminars, at which it distributes marketing material and referral documents to enable these practitioners to send their patients to the Centre.
In terms of geographical location:
(a) around 85% of patients come from within the Mornington Peninsula Shire area;
(b) around 10% of patients come from within the Frankston area north of the Mornington Peninsula area; and
(c) the remaining 5% of patients come from outside those areas.
Dr Wolfe has practised as an ophthalmic surgeon for over thirty-five years and, as noted, is the director and founder of the Peninsula Eye Centre. He has had a most accomplished career in the area of his sub-speciality, laser eye surgery and vision correction. Dr Wolfe is also the director and founder of Vista Eyes Vision Specialists (VISTAeyes), a laser eye surgery clinic located in Elsternwick.
Wolfe 2 deposes to the Peninsula Eye Centre promoting its business in the following manner:
(a) The internet. Peninsula Eye Centre has a website to promote its business, which it updates with relevant topics and news items. ‘Peninsula Eye Centre’ is consistently ranked highly within the organic Google search results. At present, the Peninsula Eye Centre has approximately 545 independent users visit its site each month. The Centre’s website is also linked to the personal website of Dr Wolfe which highlights his own professional achievements and experiences.
(b) Newspapers. Peninsula Eye Centre has featured in the Mornington News and Southern Peninsula News.
(c) White Pages. Peninsula Eye Centre has maintained a standard entry in the White Pages of the telephone directly since the start of the Centre. The entry is currently under the name ‘Peninsula Eye Centre’ in bold print, with the address and contact number below.
(d) Yellow Pages. Peninsula Eye Centre has maintained an entry in the Yellow Pages of the telephone directory since the start of the Centre. The entry is currently under the name ‘Peninsula Eye Centre’ in bold print, and then with the description ‘Doctors-Medical Practitioners – Mornington, VIC 3931’, and then the address.
(e) Social media. Peninsula Eye Centre maintains a business page on Facebook which it updates with relevant topics and news items.
(f) Clinical trials. Peninsula Eye Centre regularly participates in clinical trials, some of which are advertised to the wider community via radio advertising and Google AdWords. Participating patients are directed to Peninsula Eye Centre (and other participating ophthalmic clinics) to determine suitability.
The logo of the Peninsula Eye Centre is attached as Schedule 1 to these Reasons. It displays the word ‘peninsula’ in a thin, black, lower case font. Next to that is a grey graphic of an eye. Below that are the words ‘EYE CENTRE’ in a bold, red, capitalised font.
Various display signs advertising the Centre are located at the front of the south-eastern side of the premises, on the sides of its building, and throughout the interior of the building. The signs on the sides of the building are small and unremarkable. They display the logo of the business, as described above, on a white background. The sign on the south-eastern side of the premises is more prominent and visible to motorists travelling on the Nepean Highway. That sign stands taller than the building premises. It is black and cast on a tall, rectangular, metal pole. The words, ‘Eye Centre’ are in capital letters and a bold, red font. The word ‘peninsula’ is located on top in a smaller, fainter, white font. Beneath that section of the sign are, in separate rectangular sections, the words ‘Dr Rick Wolfe & Associates’ and then beneath that, the word ‘VISTAeyes’.
Mornington Peninsula Eye Clinic
Dr Roufail is a specialist eye surgeon with particular expertise in the diagnosis and treatment of eye conditions affecting the vitreous, retina and macular. He commenced working with the plaintiff in August 2008 and continued in that position for approximately 10 years until 28 August 2018, at which time his employment was summarily terminated by the plaintiff without notice. Dr Roufail’s work with the plaintiff was contemporaneous with his work elsewhere, including at the Armadale Eye Clinic.
Dr Van Heerden is a cataract and refractive surgeon, retina sub-specialist and comprehensive general ophthalmologist. He previously had an agreement with the plaintiff to perform eye surgery on his own patients, on an ad hoc basis, using the facilities and equipment of the VISTAeyes clinic in Elsternwick. This agreement was terminated by the plaintiff on 29 November 2018. Dr Van Heerden also practises at the Armadale Eye Clinic.
On 23 March 2018, Dr Van Heerden registered the business name, ‘Mornington Peninsula Eye Clinic’. He gave evidence that he ‘chose the name because it was in the same format as “Armadale Eye Clinic”’ and as such, ‘adopted the same logo (in different colours) and branding for both clinics.’
On 19 September 2018, Drs Roufail and Van Heerden established Mornington Peninsula Eye Clinic Pty Ltd. They are each directors of the company and, through their respective companies, hold 50 per cent of the shares of the company.
On 1 November 2018, the company commenced leasing premises located at 956 Nepean Highway, Mornington Peninsula. On 15 November 2018, Dr Roufail commenced practising from these new premises. The premises are approximately one kilometre from those of the plaintiff. Further, it was described in evidence as being located on the other side (from the plaintiff) of the major intersection in the area, next to the local McDonalds and other fast food restaurants.
The signage employed by the first defendant on its premises is generally small and unremarkable. It comprises the name and logo of the practice on the external tenancy board at 956 Nepean Highway. This tenancy board faces the highway and is split into sections for, and shared with, the various occupants of the premises. The name and logo of the practice appears in the fourth section from the top of the sign. The only other signage of which there is evidence, are two A4-sized displays inside the premises and a small laminated paper sign on the front door window.
The website of the first defendant’s practice is not yet operational. A domain name has been registered: The defendants have undertaken to differentiate that website from the plaintiff’s and to refer to the clinic using its full name or by the acronym, ‘MPEC’, and not ‘Peninsula Eye Clinic, Mornington’ as erroneously appeared on the Armadale Eye Clinic website, as noted below.[1]
[1]See paragraph [28(c)].
The logo of the Mornington Peninsula Eye Clinic shares the style used by the Armadale Eye Clinic. The logo of each of these clinics appears, respectively, as Schedules 2 and 3 to these Reasons. The first defendant’s logo displays a circular graphic with a colour scheme of white, greys and blues. A thin vertical line separates the graphic from the words ‘Mornington Peninsula’, which are in a bold, dark, grey font with serifs. The words ‘Eye Clinic’ appear beneath this in a fainter shade of grey but the same font.
Like the plaintiff, the Mornington Peninsula Eye Clinic sources work primarily by way of referrals. These referrals can come from other ophthalmologists, optometrists or general or specialist practitioners.[2] However, there are a number of features which distinguish the manner in which the Mornington Peninsula Eye Clinic sources its work:
(a) Dr Roufail gave evidence that the Clinic does not receive referrals by doctors referring to a location. As a tertiary referral source, he receives referrals directly to him. This means that people will contact him directly, or write referrals specifically to him because of the unique services that he provides. Further, he deposed to all written referrals that he receives as ‘specifically nam[ing him] as the doctor to whom the referral is being made and it [being] extremely rare for the referral to be to only the name of a clinical practice.’[3]
(b) Dr Van Heerden gave evidence that ‘very few’ patients would be seen without a referral. Most of these would be foreigners who are not on the Medicare system (and therefore cannot claim the Medicare rebate associated with a referral). By contrast, Dr Wolfe gave evidence that half of the patients that he sees at the Peninsula Eye Centre (and elsewhere) are not referred.
[2]Dr Roufail gave evidence that since starting at the defendants’ practice on 15 November 2018, he received 32 new referrals. 8 (24%) were from other ophthalmologists, 5 (15%) were from local general practitioners, and 20 (61%) were from local optometrists.
[3]As at 10 January 2019, Dr Van Heerden had not yet commenced practising at Mornington Peninsula Eye Clinic and as such, he had not yet received any referrals. He commenced practising there on 14 January 2019, on which day he saw three patients, all of which were referred to him by his name.
Plaintiff’s submissions
The Peninsula Eye Centre relied on the following as evidence in support of the alleged confusion caused by the first defendant’s use of the business name, Mornington Peninsula Eye Clinic:
(a) Oral evidence and an affidavit sworn on 21 December 2018 by Stephen John Bambery, an ophthalmic surgeon practising at the Southern Eye Centre Day Surgery and Laser Clinic in Frankston. Dr Bambery expressed his opinion that there is a ‘real possibility that referring doctors and optometrists might be misled as to the connection between Peninsula Eye Centre and Mornington Peninsula Eye Clinic.’ He deposed to the following reasons in support of his opinion:
First, it is foreseeable that a GP or optometrist would see “Mornington Peninsula Eye Clinic” (or part of that name) next to Dr Roufail’s name and be misled to believe that the was still working with Dr Wolfe and/or the Peninsula Eye Centre.
Secondly, it is foreseeable that a referrer might see the name see “Mornington Peninsula Eye Clinic” and believe it to be associated with Dr Wolfe, rather than it being a new competitor about whose services, clinic and equipment nothing is known. In particular, “Mornington Peninsula Eye Clinic” may not:
(a)have immediate access at the clinic to the full range of expensive equipment, including cutting edge laser equipment;
(b)provide good patient services and operational systems.
Thirdly, there is a real possibility that a patient would see the name “Mornington Peninsula Eye Clinic” and be misled to believe the clinic is associated with Dr Wolfe and Peninsula Eye Centre. The majority of ophthalmic patients are elderly and many may have memory difficulties.
Fourthly, many patients are not fully aware of the differences between ‘Opthalmologists’ and ‘Optometrists’ and ‘Orthoptists’, and they find this confusing. Adding another layer of confusion to their choice of medical practitioner will make this even more difficult.
Finally, in my experience, referrals are often made by word of mouth, and I believe the name “Mornington Peninsula Eye Clinic” could be easily confused with Peninsula Eye Centre during the course of such communications.
(b) The misdelivery of a parcel by Australia Post, that was intended for Mornington Peninsula Eye Clinic, but delivered to Peninsula Eye Centre.[4] It was submitted that if there is confusion in Australia Post, whose professional job it is to deliver parcels, that confusion must also be present (and indeed, stronger) in the general populace.
[4]The parcel bore the correct name and address of the first defendant. It was delivered to the business premises of the plaintiff.
(c) The website for Armadale Eye Clinic contained a statement to the effect that Dr Roufail also practised at the ‘Peninsula Eye Clinic, Mornington.’[5] It was submitted that shifting the word ‘Mornington’ from the beginning to the end of the name of the first defendant created further confusion.
(d) The Peninsula Eye Centre received a telephone call in January 2019 from the son of a patient of Dr Roufail, who believed that he was speaking to the Mornington Peninsula Eye Clinic. The caller was informed that Dr Roufail no longer practised at the Peninsula Eye Centre and that he had called the incorrect telephone number.[6]
(e) Dr Bambery expressed his opinion, that in a busy general practice or optometrist clinic, or in a patient acute situation, the decision to refer patients is generally done under significant time pressures. It was submitted that if there were two referral pads on the desk of a doctor, one with the name ‘Mornington Peninsula Eye Clinic’ and the other ‘Peninsula Eye Centre’, it would be extremely easy for a doctor to choose the wrong one.[7]
[5]The evidence made clear that this statement was intended to refer to the Peninsula Eye Centre, and not the Mornington Peninsula Eye Clinic. The statement remained on the website for a period of over three years, while Dr Roufail practised at the Peninsula Eye Centre, prior to the establishment of the Mornington Peninsula Eye Clinic, and then also while Dr Roufail practised at the Mornington Peninsula Eye Clinic. This statement was removed by the defendants once the plaintiffs made them aware of it in December 2018.
[6]Of course, the patient is already one of Dr Roufail’s so there can be no wrongful diversion of business or loss. The son already knows that Dr Roufail practises at Mornington Peninsula Eye Clinic and accordingly, any confusion extends only to which telephone number belongs to that clinic.
[7]There was no evidence that any general practitioner or optometrist had erroneously referred a patient to Mornington Peninsula Eye Clinic instead of Peninsula Eye Centre. Dr Wolfe conceded that it would be ‘very difficult, if not impossible’ to discern which patients have been mistakenly referred.
Peninsula Eye Centre submitted that given the similarity to its business name, the use by the defendants of the names, ‘Mornington Peninsula Eye Clinic’ or ‘Peninsula Eye Clinic, Mornington’, was conduct that did, or was likely to, cause significant confusion. This confusion is such that it would mislead the public into believing that the defendants’ business was associated with that of the plaintiff.
It was submitted that the addition of the prefatory word ‘Mornington’ in the first defendant’s business name does not sufficiently differentiate it from the existing business name of the plaintiff. Further, the defendants intentionally adopted the words ‘Peninsula Eye’ in the first defendant’s business name in order to reap the benefits of a purported association with the Peninsula Eye Centre. It was submitted that Dr Roufail created the impression that the two practices were not in competition as he had informed the plaintiff’s patients that he had relocated to a second practice without explicitly informing them of the fact that they would now have a choice between the two practices.
It was submitted that evidence of the plaintiff having already received a parcel delivered by Australia Post, as noted above, clearly addressed to the first defendant, as well as of a relative of one of the Dr Roufail’s patients having incorrectly called the plaintiff assuming that he was speaking to the first defendant, as noted above, are significant in supporting the claim that the first defendant’s business name is confusingly similar to that of the plaintiff. In addition, it was submitted that the first defendant’s choice of business name is likely to mislead given that:
(a) the two practices operate the same type of business - ophthalmic services;
(b) Dr Roufail worked for the plaintiff for approximately 10 years and until very recently; and
(c) the premises of both businesses are located on the same road about 20 lots - or one kilometre - apart.
As a consequence of the misleading conduct, it was submitted that the defendants caused or will cause the plaintiff considerable loss and damage to its reputation and business (in the form of the diversion of patients from the plaintiff to the first defendant).
As it concerns the class of consumers likely to be confused by the first defendant’s business name, it was submitted that these include those who provide referrals to a patient on the Mornington Peninsula, including ophthalmologists, general practitioners and optometrists. In particular, it was noted that ‘a big number of optometrists who come and go’ and who had not been informed of the defendants‘ new practice via the letter, or continuing professional development session or flyer would be easily confused. It was also submitted that general practitioners who are not familiar with the ophthalmologists practising in the area may erroneously refer a patient to the defendants’ practice, particularly as a result of time pressures faced by general practitioners and in acute situations where a referral is required urgently and is made to a clinic and not to a specific ophthalmologist.
Defendants’ submissions
Mornington Peninsula Eye Clinic relied on the following facts and matters to evidence the steps that it had taken to distance or distinguish itself from the name and business of the plaintiff:
(a) Letters sent to optometrists and ophthalmologists. Dr Roufail gave evidence of having informed all of the referring optometrists and ophthalmologists in the area that he:
1. was no longer working at the Peninsula Eye Clinic;
2. had worked at The Bays Eye Clinic; and
3. had established a new practice, Mornington Eye Peninsula Clinic, to which they could refer patients.
Dr Roufail conceded that he has yet to write to general practitioners but that it was his intention to do so in order to similarly inform them of the establishment of his new practice.
(b) Continuing professional development sessions. An educational continuing professional development session was held by the defendants on 5 December 2018, at which Dr Roufail spoke to local optometrists, and introduced them to his practice.
(c) Distinct referral pads. The plaintiff’s referral pad is visually different to that of the first defendant. The first defendant’s referral pad and displays their logo and names Drs Roufail and Van Heerden as ophthalmologists working for the practice. It is A4 in size. The plaintiff’s referral pad is A5 in size and employs a different font, colour scheme and logo.
(d) Logo. It was submitted that the business logos of the plaintiff and the first defendant, attached as Schedules 1 and 2 to these Reasons, respectively, are distinct. The logo and style of the Mornington Peninsula Eye Clinic is shared with the Armadale Eye Clinic, attached as Schedule 3 to the Reasons. I have described these logos earlier. They employ distinct colour schemes and graphics.
(e) Website. The defendants submitted that its website uses a distinctive domain name from that of the plaintiff. That is, there is no similarity between (first defendant) and com.au (plaintiff). The only common denominator is the inclusion of the word ‘eye’. The website of Mornington Peninsula Eye Clinic is not yet operational but undertakings were given to the Court, that once operational, it will be distinct from that of the plaintiff.
Mornington Peninsula Eye Clinic submitted that as the plaintiff’s business name is highly descriptive, that is, descriptive of geographical location (Peninsula) and nature of the business (Eye Centre), and as the law allows for two similar business names to co-exist, the plaintiff’s claims are problematic at law and, in any event, not made out on the evidence.
The defendants cited various cases in which two similar business names were allowed to co-exist.[8] The defendants relied primarily on the case of Hindmarsh Medical Clinic v Hindmarsh Family Practice Pty Ltd (Hindmarsh)[9] where the facts were similar to those at hand and the Court held that the new competitor did not engage in misleading or deceptive conduct. The defendants emphasised, that in Hindmarsh, the descriptive name of a medical practice was applicable to a business of a like kind, not distinctive to the applicant’s business, and the use by the respondent of its similar name was unlikely to mislead the public.
[8]See discussion of authorities below.
[9]Hindmarsh Medical Clinic v Hindmarsh Family Practice Pty Ltd (1997) 38 IPR 616 (‘Hindmarsh’).
The first defendant submitted that its business name was not likely to confuse the public. It was stressed that referrals by optometrists, ophthalmologists and general practitioners are deeply considered decisions made in tandem with the patient and which are usually directed to a specific doctor. In addition, optometrists and general practitioners know who is in the field within and outside an area and the first defendant’s name has already been established in the area through its promotional efforts. Further, the first defendant submitted that its business name is associated with a distinct logo, signage, web address, location and different practising doctors (that is, Drs Roufail and Van Heerdan). It was also noted that, to date, there had not been any instances of actual confusion and that the two cases of misdelivered mail, and of a telephone call to an incorrect telephone number, are properly characterised as mere confusion and not enough to support claims of misleading or deceptive conduct or passing off.
Legal principles
Section 18(1) of the ACL states as follows:
(1)A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
In an action for misleading or deceptive conduct, the plaintiff must establish that the act complained of constitutes a misrepresentation. The representation must have been made by the defendant in such a manner as to deceive consumers (or potential consumers) into believing that the defendant’s goods or services are the same as, or associated with, those of the plaintiff.[10]
[10]Telmak Teleproducts (Aust) Pty Ltd v Coles Myer Ltd (1989) 89 ALR 48, 67 (Wilcox and Einfeld JJ) (‘Telmak’).
Conduct that deceives consumers about a connection between the defendant and the plaintiff must be distinguished from conduct that merely ‘confuses’ the public, causes them to wonder, or creates uncertainty in their minds as to the question of whether there is an association between the two businesses.[11]
[11]Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 42 ALR 1, 6 (Gibbs CJ) (‘Parkdale’); Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216, 230 (Stephen J) (‘Hornsby’); Barry v Lake Jindabyne Reservation Centre (1985) 8 FCR 279, 285 (Toohey J) (‘Lake Jindabyne’); Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 8) [2008] FCA 470 [88] (Heerey J) (‘Cadbury’); Taco Co (Aust) Inc v Taco Bell Pty Ltd (1982) 42 ALR 177, 201 (Deane and Fitzgerald JJ).
The general principles which apply to claims of misleading or deceptive conduct are well-established. They were stated as follows by Hill, RD Nicholson and Emmett JJ in S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd:[12]
[12](1998) 88 FCR 354, 362-3. Quoted with approval in Sydney Medical Co-Operative Limited v Lakemba Medical Services Pty Ltd [2016] FCA 763 [14] (Flick J) (‘Sydney Medical’).
Where the conduct claimed to be misleading or deceptive involves what is said to be a misrepresentation a number of principles applicable are well established. These were summarised in Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 50,943 at 50,950-51 in a passage which has been followed in many cases and which was applied by the learned primary judge. We would restate the applicable principles relevant to the present case as follows:
1. There will be no contravention of s 52 unless the error or misconception which occurs results from the conduct of the corporation and not from other circumstances for which the corporation is not responsible: …
2. Conduct will be misleading and deceptive if it leads into error: …
3. Conduct will be likely to mislead or deceive if there is a "real or not remote chance or possibility" of misleading or deceiving regardless of whether it is less or more than 50 per cent: …
4. Conduct causing confusion or uncertainty in the sense that members of the public might have cause to wonder whether the two products or services might have come from the same source is not necessarily misleading and deceptive conduct: …
5. In a case such as the present an applicant must establish that it has acquired the relevant reputation in the name or get-up such that the name or get-up has become distinctive of the applicant's business or products: …
6. Conduct may be misleading or deceptive or likely to mislead or deceive notwithstanding that the corporation said to engage in that conduct acted honestly and reasonably and did not intend to mislead or deceive: … Logically, a finding that conduct had been intentionally engaged upon will be irrelevant in determining whether that conduct is misleading or deceptive. It may perhaps be imagined that conduct engaged upon with the intent to mislead or deceive may fail in its purpose and not be found misleading or deceptive. Nevertheless, where the intention to mislead or deceive is found, it logically would be likely that a court would more easily find that the conduct was misleading or deceptive: …
7. In many cases it will be necessary to consider the class of persons to whom the representation was directed: … To the extent that it is here necessary so to do that must be the class of persons interested in purchasing magazines concerned with triathlon sport.
8. There is no proposition of law to the effect that intervention from erroneous assumption between conduct and misconception destroys the necessary chain of causation with the consequence that the conduct cannot be regarded as likely to mislead or deceive: …
9. The test of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective one for the Court to determine. It is ultimately a question of fact.
(citations omitted)
Descriptive Names & Secondary Meaning
Difficulty arises, as in the present case, where the basis for the alleged misleading or deceptive conduct (and passing off) is the use of a purported variant of the plaintiff’s business name, in circumstances where the business name is descriptive or functional. A name is descriptive or functional where it describes some quality of the business, the goods or services that it provides, the location of its premises, the area it services, or the origin of the goods it offers.[13] Here, the business name used by the plaintiff consists of a description of the geographical location of the business (Peninsula) and the services that it provides (Eye Centre).
[13]Hornsby (1978) 140 CLR 216, 229-230 (Stephen J); Parkdale (1982) 42 ALR 1, 9-10 (Mason J).
At law, the issue is two-fold. First, an action for misleading or deceptive conduct (and passing off) cannot be used to protect a business name that is purely descriptive or functional, as opposed to a name that is unique, fancy or inventive.[14] Secondly, it will be difficult for a plaintiff to demonstrate the necessary element of deception or misrepresentation (in both actions) where the business name it seeks to protect is descriptive. As the name is no more than a description of the business, those who use a similar name and the same type of business do not deceive or mislead the public as to the nature of the business described.[15] Therefore, a plaintiff who uses descriptive words in their trade name will ordinarily find that ‘quite small differences in a competitor's trade name will render the latter immune from action.’[16]
[14]Ibid.
[15]Ibid; Connect.Com.Au Pty Ltd v GoConnect Australia Pty Ltd (2000) 178 ALR 348, 359-360 [58]-[61] (Emmett J) (‘Connect.Com.Au’).
[16]Hornsby (1978) 140 CLR 216, 229 (Stephen J); Connect.Com.Au (2000) 178 ALR 348, 359 [60] (Emmett J).
However, the fact that a business name uses descriptive terms will not bar an action for misleading or deceptive conduct (or for passing off) where the plaintiff can establish that the name has acquired a ‘secondary meaning’; that is where the descriptive terms have become distinctively associated with the type of business carried out by the plaintiff, in the general locality of that business.[17] This association may be established through the repeated, substantial or exclusive use by the plaintiff of the name over a period of time, or by the use of the name in combination with a distinctive style, dress or get-up.[18]
[17]Lake Jindabyne (1985) 8 FCR 279, 285 (Toohey J); Hindmarsh (1997) 38 IPR 616.
[18]However, in the latter circumstance, it is the combination of the word with that particular style, dress or get-up that becomes distinctive (as opposed to the mere use of the word by the plaintiff), and would have consequences so far as the ACL and tort of passing off is concerned. Connect.Com.Au (2000) 178 ALR 348, 549 [56] (Emmett J).
It is, in practice and as a matter of evidence, easier to establish the necessary element of distinctiveness in the case of a ‘fancy’ or ‘concocted’ name, as opposed to one that is purely descriptive. As Hill J has described, there is a continuum, with purely descriptive names at one end, and completely invented names at the other. It follows, that ‘[t]he closer along the continuum one moves towards a merely descriptive name the more a plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff’.[19]
[19]Equity Access Pty Ltd v Westpac Banking Corp (1989) 16 IPR 431, 445-448 (Hill J).
A number of authorities were cited in the course of argument and were said to be on point. It is useful to briefly discuss them. Each of these concerned the use by the defendant of a descriptive or functional business name that bore similarities to that used by the plaintiff, coupled with the allegation that the use of the name misled or deceived consumers and constituted passing off.
In Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (Hornsby)[20] interim injunctions were granted restraining Hornsby Building Information Centre Pty Ltd (the Hornsby Centre) from carrying on a business under the name ‘Hornsby Building Information Centre’ or any name that included the words ‘building information centre’. On appeal, the High Court dissolved the injunctions because the name ‘Hornsby Building Information Centre’ was not misleading or deceptive, in so far as it suggested some affiliation of the newly established Hornsby Centre with the long established Sydney Building Information Centre (Sydney Centre). Justice Stephen (with whom Jacobs J agreed) said the following on the Sydney Centre’s use of a descriptive business name:[21]
The use by the Sydney Centre of the three descriptive words was no doubt convenient. It thereby acquired a name which at the same time very clearly described its activities. …
There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor's trade name will render the latter immune from action (Office Cleaning Services Ltd. v. Westminster Window and General Cleaners Ltd. (36), per Lord Simonds). As his Lordship said (37), the possibility of blunders by members of the public will always be present when names consist of descriptive words - "So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be." The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe. (emphasis added)
[20](1978) 140 CLR 216.
[21]Hornsby (1978) 140 CLR 216, 229 (Stephen J).
His Honour also said, in relation to the alleged misleading or deceptive character of a name that describes the nature of the business:[22]
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. (emphasis added)
[22]Ibid 230 (Stephen J).
In Barry v Lake Jindabyne Reservation Centre (Lake Jindabyne),[23] the applicants operated a ski resort in Jindabyne under the name ‘Jindabyne Resort Centre’. They alleged that the respondent, through the use of the business names ‘Jindabyne Reservation Centre’ or ‘Lake Jindabyne Reservation Centre’, had misled and deceived the public into believing that its ski resort business was associated with that of the applicants. The claims rested squarely upon the respondent’s use of its business name. Justice Toohey dismissed all claims upon finding that:
[23](1985) 8 FCR 279.
(a) the nature of the two businesses were different and the names were descriptive of their respective businesses;[24]
[24]The applicants’ business consisted primarily of the management of a holiday resort known as ‘Alpine Gables’. Therefore, the name ‘Jindabyne Resort Centre’ was an accurate description of the business. The respondent’s business did not consist of the management of holiday premises, but rather, reservations for facilities in and around Jindabyne, which were not confined to accommodation (i.e. extending to skiing equipment, chair-lifts and equipment). Like the applicants, the respondents’ name was an accurate description of their business. See Lake Jindabyne (1985) 8 FCR 279, 281, 283-284 (Toohey J).
(b) the applicants’ business name had not become distinctive of the services it provided;
(c) the clientele and marketing of the two businesses were different; and
(d) the similarity in names had not given rise to uncertainty in the mind of the public.
Evidence was led that some members of the public had been confused as to the relationship between the applicants’ business and that of the respondent. This included (and as is on point with evidence adduced in the present case), that letters were mistakenly received by the applicants, when they were intended for the respondent, and that telephone calls intended for the respondent were received by the applicants.[25] Justice Toohey said the following:[26]
Some of these examples were simply cases of mis-delivery by the post office; others evidenced a belief in the mind of the writer that he or she was dealing with Jindabyne Resort Centre when in fact it was with Jindabyne Reservation Centre. … In my view the cases of mis-delivery are no more than that. The other examples are of some confusion in the mind of the writer or speaker. It may be that the existence of two names, having some similarity, causes uncertainty in the minds of some persons wishing to organise a skiing holiday in the Jindabyne area. Conduct which merely causes uncertainty does not contravene s 52 of the Trade Practices Act 1974: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191. Conduct is not misleading or deceptive unless it contains or conveys a misrepresentation: see Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177. In my view, the use by the respondent of the name Jindabyne Reservation Centre has done no more than give rise to uncertainty. Viewed objectively, the use of the name contains or conveys no misrepresentation by the respondent and does not constitute conduct that is misleading or deceptive or conduct likely to mislead or deceive. (emphasis added)
[25]Ibid 284 (Toohey J).
[26]Ibid 285 (Toohey J).
Justice Toohey stated the question as follows on whether the name was sufficiently distinctive:[27]
Where a complaint of misleading or deceptive conduct relates to the use of a particular name by a respondent, the applicant must show an association in the minds of the relevant section of members of the public with that particular name, otherwise conduct is not likely to mislead or deceive … (citations omitted)
[27]Lake Jindabyne (1985) 8 FCR 279, 285 (Toohey J).
His Honour found that the respondent had marketed its services ‘more widely and more aggressively’ than the applicants. The nature of its business required it to do so, and in particular, to target its promotional efforts towards individual members of the general public in order to attract business. On the other hand, the applicants relied largely on tour coaches in order to fill rooms, meaning that their contacts were more confined. The applicants did not establish an association with their name, Jindabyne Resort Centre, beyond the management of its resort centre premises, Alpine Gables.[28] That is, it had not established an association of its name with resort centres or reservation services in Jindabyne more generally.
[28]Ibid (Toohey J).
In Hindmarsh Medical Clinic v Hindmarsh Family Practice Pty Ltd, the respondent, Hindmarsh Family Practice Pty Ltd, operated a medical practice in competition with the applicant, Hindmarsh Medical Clinic. The applicant alleged that the respondent’s use of the name, Hindmarsh Family Practice (in conjunction with the close geographical proximity of the two business premises – approximately 1.1 kilometres), was conduct that was misleading or deceptive, or was likely to mislead or deceive the public into thinking that the respondent’s business was associated with that of the applicant. The claim failed as the applicant could not establish that its name had become distinctive of medical practices in the general locality of the Adelaide suburb of Hindmarsh. That is, it could not establish the necessary secondary meaning in its name that gives rise to the cause of action.
Justice Mansfield summarised the claim, as well as what was required from the applicant to succeed in its claim, as follows:[29]
To succeed in that claim, [the applicant] must in effect claim a monopoly in the geographically descriptive word 'Hindmarsh' in respect of businesses of the same or similar nature as its own business and in the same general locality. It thus claims that, irrespective of whether the descriptive words as to the nature of a medical practice are the same as, or similar to, or dissimilar from, its own, so long as one descriptive word in the name is the geographical word 'Hindmarsh' the name will mislead and deceive members of the public in the way alleged.
The applicant's concern is that, if the respondent continues to conduct the business of a medical practitioner at the location at 500 Port Road, Welland under the name 'Hindmarsh Family Practice', it will suffer loss of patients and diminution of its business. It accepts that it must be exposed to competition, and its potential consequences, but only so long as it is fair. The use of the name 'Hindmarsh Family Practice' by the respondent, it asserts, has led and will lead to members of the public being misled that the respondent's business is either the applicant's practice or is in some way related to it so that its patients or its potential patients may be misled into going to the respondent's practice. In the vernacular, it claims that by use of the name, the respondent will pinch its clients.
[29]Hindmarsh Medical (1997) 38 IPR 616, 625-626 (Mansfield J).
On the question of whether a plaintiff has established a secondary meaning in a geographically descriptive name, his Honour said the following:[30]
[30]Ibid 627-628 (Mansfield J).
In the present case the misrepresentation is said to be that the use of the name 'Hindmarsh Family Practice' carries with it the message that it is, or is associated with, the applicant's medical practice conducted under the name 'Hindmarsh Medical Clinic'. Thus it is necessary, as was accepted by counsel for the applicant, that the applicant establish that it has acquired the necessary reputation in the name; that is that its name has become distinctive of its medical practice at least in the general broad locality of Hindmarsh.
…
In Equity Access (above, at 445-448), Hill J reviewed a number of decisions touching on that question. I respectfully adopt that review, and the conclusions his Honour reached. Whilst it may be easier as a matter of evidence to prove the necessary element of distinctiveness in the case of a fancy or concocted name compared to one that is merely descriptive, that is a matter of proof rather than a distinction of law. There is, to use his Honour's expression, a continuum with at the extremes purely descriptive names at the one end and completely invented names at the other. He concluded:
"The closer along the continuum one moves towards a merely descriptive name the more a plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff (if the name admits of this - a purely descriptive name probably will not) and the easier it will be to see a small difference in names as adequate to avoid confusion."
…
The decision as to whether the applicant has made out the necessary degree of distinctiveness, or secondary meaning as it is described in some of the cases where the name in issue comprises descriptive words including geographically descriptive words, is to be made upon the whole of the evidence. It is to be decided objectively. It is a decision to be made in context and not by selecting some words only and to "ignore others which provided the context which gave meaning to the particular words": Gibbs CJ in Parkdale (above, at 199). See generally the observations of the Full Court of this Court (Gummow, French & Hill JJ) in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (above), which concluded on this aspect with the observation:
"Mere expressions of opinion that the use by another trader of the same name is surprising or confusing does not go any way to establishing distinctive or secondary meanings for substantially descriptive words. In our opinion this aspect of the appeal fails."
The dispute centred on two key questions. First, whether ‘the applicant … established the necessary reputation in the name ‘Hindmarsh Medical Clinic’ as to give it a distinctiveness or secondary meaning among a relevant class of persons, at least in respect of medical practices in the broader Hindmarsh area, sufficient to support its claim for what [was] in effect a monopoly on the use of the word 'Hindmarsh'.’[31] Secondly, whether the applicant had shown that ‘there are persons who will mistakenly infer from the respondent’s use of the name ‘Hindmarsh Family Practice’ that it is, or is associated with, the applicant’s business.’[32]
[31]Hindmarsh Medical (1997) 38 IPR 616, 628-629 (Mansfield J).
[32]Ibid 629 (Mansfield J).
Justice Mansfield traced the nature of the applicant’s practice from time to time in order to determine whether it had ‘goodwill in the name ‘Hindmarsh Medical Centre’ as to entitle it to the relief claimed.’[33] His Honour considered that ‘the applicant [had] not vigorously promoted the name ‘Hindmarsh Medical Clinic’.’[34] The only evidence, other than of its limited advertising efforts, as to the goodwill said to arise from its name came from two patients of the applicant’s practice. Their evidence was to the effect that when they saw a sign located on the premises of the respondent, which displayed the words ‘Hindmarsh’ and ‘Medical Centre’, they associated it with the practice of the applicant, or drew the inference that a doctor practising at the applicant’s clinic was moving to newer premises (being the premises of the respondent).
[33]Ibid 619 (Mansfield J).
[34]Hindmarsh Medical (1997) 38 IPR 616, 619 (Mansfield J).
His Honour adopted, with reference to the passages of Hornsby recited above, the view that there would always be the possibility of blunders by members of the public, so long as descriptive words are used in a business name. His Honour then said:[35]
… It is therefore necessary to examine such evidence carefully to identify clearly what amounts to the confusion [of the public or relevant population] deposed to, and to identify the reasons why such confusion arose. It is only by doing so that it can be determined whether such evidence supports, in the case of a name involving descriptive words, a secondary meaning involving goodwill in that name properly protected by the law … (citations omitted)
[35]Ibid 623 (Mansfield J).
This question was examined from the perspective of three potentially relevant classes of persons:
(a) First, the existing permanent or semi-permanent patients of the applicants.
(b) Secondly, the after-hours patient which came partly by referral and partly without referral.
(c) Thirdly, the remaining group of potential patients, being those who had not been to the applicant’s practice for some time or at least for some considerable time.
From the perspective of each, his Honour found that the applicant’s name did not possess the necessary degree of distinctiveness or secondary meaning required, and even if it did, the use of that name would not be misleading or deceptive or constitute passing off. His Honour found:
(a) The applicant’s promotion of its name on the name ‘Hindmarsh’ did no more but convey to those persons that the business was conducted at its premises in Hindmarsh. No further significance was attracted to that word. Further, the applicant’s promotion focussed heavily on the individual doctors located at the practice.
(b) The ‘muted’ manner of the applicant’s promotion did not support any special reputation enjoyed under its name, notwithstanding that the name had been in use for some time.
(c) Any confusion which arose between the two businesses was not a consequence of the applicant having established the secondary meaning required. Rather, any confusion that arose reflected no more than the fact that the applicant had been the only medical practice for some years, in the general area and with the word ‘Hindmarsh’ as part of its name.
(d) The evidence of the two confused patients did not assist the applicant. This was because the applicant objected to the use by the respondent of the name itself, and not the particular get-up or wording of the sign.
In Kosciuszko Thredbo Pty Ltd v ThreadboNet Marketing Pty Ltd (Kosciuszko),[36] the appellants (Kosciuszko Threadbo Pty Ltd) sought to restrain the respondents (Threadbo Marketing Pty Ltd) from using the word, ‘Threadbo’, in the promotion of their competing business. They alleged that ‘Threadbo’ had acquired a secondary meaning associated with their business, and by using it, the respondents engaged in misleading or deceptive conduct or passed off their business as that of the appellants.
[36]Kosciuszko (2014) 223 FCR 517.
The trial judge held that the appellants had not established that the word ‘Threadbo’ had acquired a secondary meaning, which he described as being a ‘a right to use it to the exclusion of all others.’[37] On appeal, Siopsis, Rares and Katzmann JJ considered that the trial judge had erroneously held that the appellants were required to prove an ‘exclusive right’ to use the word ‘Threadbo.’ The proper question was instead, ‘whether the misconceptions or deceptions alleged to arise or to be likely to arise are properly to be attributed to the ordinary or reasonable members of the classes of consumers or prospective purchasers of the relevant goods or services.’[38] That is, whether the respondent’s use of the word was likely to lead ordinary or reasonable consumers into thinking the respondents’ business was that of the applicants.[39]
[37]Kosciuszko (2014) 223 FCR 517, 520 [7] (Siopsis, Rares and Katzman JJ).
[38]Ibid 525 [30] (Siopsis, Rares and Katzman JJ).
[39]Ibid 525 [31] (Siopsis, Rares and Katzman JJ).
The trial judge further found that because of differences between the parties’ websites, consumers were not likely to be misled into believing that the respondents’ web pages belonged to the appellants. The trial judge characterised the appellants’ evidence as ‘evidence of confusion’, falling short of what is required by the ACL.[40] The Full Court agreed. After analysing the Google search results, web pages of each, and the disclaimers located on the respondent’s website (which stated that the respondent was, in no way, affiliated with the appellants), the Full Court said:[41]
[40]Ibid 520 [10] (Siopsis, Rares and Katzman JJ).
[41]Ibid 530 [48]-[49], 531 [33] (Siopsis, Rares and Katzman JJ).
We are satisfied that a consumer who went to any of the respondents’ websites would reasonably have associated the operator of the website with the appellants. The respondents’ domain name was very similar to that of [the applicant], namely A consumer might easily be led to the former website thinking it was that of the appellants when doing an internet search. But in today’s society the ordinary or reasonable consumer seeking accommodation, or other goods or services, on the internet will frequently click on a result in a web search thinking it is a link to a particular site, only to find when his or her browser is directed to the selected site that it is not the site of the supplier or business that the consumer wanted. The ordinary, reasonable consumer would have seen, depending on when he or she accessed it, the first or second disclaimer in the middle of the page. …
A consumer who was concerned about the entity with which he or she was dealing could be expected to read the [disclaimer]. As Gibbs CJ pointed out … in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR at 199:
Although it is true, as has often been said, that ordinarily a class of consumers may include the inexperienced as well as the experienced, and the gullible as well as the astute, the section must in my opinion by (sic) regarded as contemplating the effect of the conduct on reasonable members of the class. The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will or (sic) course depend on all the circumstances. The persons likely to be affected in the present case, the potential purchasers of a suite of furniture costing about $1,500, would, if acting reasonably, look for a label, brand or mark if they were concerned to buy a suite of particular manufacture.
The conduct of a defendant must be viewed as a whole. It would be wrong to select some words or act, which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. It is obvious that where the conduct complained of consists of words it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words. The same is true of acts.
…
In our opinion, the get-up and appearance of the respondents’ websites were not such as would lead the ordinary reasonable consumer into a belief that they were associated with the appellants’ business.
Finally, in Sydney Medical Co-Operative Limited v Lakemba Medical Services Pty Ltd (Sydney Medical),[42] the applicant, Sydney Medical Service Co-operative Limited (an after-hours medical service trading under the name ‘Sydney Medical Service’) succeeded in restraining Lakemba Medical Services Pty Ltd (Lakemba) from trading under the name ‘Sydney Medical Services 2020’. While Lakemba operated a general medical practice under the name ‘Lakemba Medical Services’, it had recently commenced operating an after-hours home doctor service under the name ‘Sydney Medical Services 2020’.
[42][2016] FCA 763.
Justice Flick concluded that the conduct of the respondent contravened s 18 of the Australian Consumer Law. In finding this, his Honour had regard to:
(a) the similarity of the service offered, in so far as they were directed at securing after-hours access to medical services;
(b) the distinct similarity between the names used, coupled with evidence that the respondent had on various instances promoted its business using the phrase ‘Sydney Medical Services’ without the reference to 2020;
(c) the hours of operation and geographical services were comparable or overlapped;
(d) there was a ‘distinct correlation or comparison’ between the websites of the applicant and respondent, in so far as it appeared that various statements that appeared on the applicant’s websites had been altered slightly and then replicated on that the website of the respondent;
(e) various unexplained circumstances which invited speculation, upon which his Honour found that the respondent had intentionally set out to mislead or deceive consumers as to there being an affiliation of its business with that of the applicant.[43]
[43]Notably, it was not explained why the respondent had a day-time medical service known as Lakemba Medical Services, but employed a different name, ‘Sydney Medical Services 2020’ for its after-hours service; or why the respondent employed a name using the geographical identifier of ‘Sydney’ in circumstances where the medical practice was limited to a small geographical area within the Sydney metropolitan area. Further, evidence of the a director of the respondent was inconsistent with objective facts disclosed by the documents adduced in the course of the trial.
Passing off
Whereas the prohibition against misleading or deceptive conduct is designed to protect consumers; the tort of passing off is concerned with the misappropriation by deception of a trader’s reputation or goodwill. It is aimed at protecting the proprietary interest an injured trader possesses in that reputation.[44] Despite recognition that the action is founded on the defendant’s interference with the plaintiff’s proprietary interest, the underlying rationale of the action is the prevention of commercial dishonesty. Accordingly, the element of misrepresentation is central to the tort.[45]
[44]AG Spalding & Bros v AW Gamage Ltd (1915) 32 RPC 273, 283-5 (Lord Parker); Winnebago Industries v Knott Investments Pty Ltd (No 4) (2015) 241 FCR 271 [85] (Yates J).
[45]ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 106 ALR 465, 502 (Lockhart J) (‘ConAgra’).
Although there is no universally accepted definition of the tort, there are three key elements to be made out.[46] These were stated as follows by Lord Oliver in Reckitt & Colman Products Ltd v Borden Inc:[47]
First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff’s goods or services.
Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff …
Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff.
[46]The plaintiff and defendants each submitted that the elements are those stated by Diplock LJ in Erven Warnick BV v J Townend & Sons (Hull) Ltd [1979] AC 731 at 742: (1) a misrepresentation; (2) made by a trader in the course of trade; (3) to prospective customers or ultimate consumers of goods or services supplied by him/her; (4) which is calculated to injure the business or goodwill of another trader (in the sense that it is a reasonably foreseeable consequence); and (5) which causes actual damage to a business or good will of the trader bringing the action or will probably do so. This formulation has not received unanimous approval within Australia. Halsbury’s Laws of Australia states (at [240-4510]) that it is ‘not a complete definition’, that the third requirement is ‘too restrictive’, and that the three element definition is, in recent times, ‘the orthodox approach in Australia’. See; ConAgra (1992) 106 ALR 465, 489 (Lockhart J), 517 (Gummow J); Coca Cola Co v PepsiCo Inc (No 2) (2014) 322 ALR 505, 551 [252] (Besanko J); Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 280 ALR 639 [211]-[216] (Greenwood J); Telstra Corp Ltd v Phone Directories Co Pty Ltd (2014) 316 ALR 590, 670 [391] (Murphy J); Anakin Pty Ltd v Chatswood BBQ King Pty Ltd (2008) 250 ALR 620 [90] (Branson J); Simplot Australia Pty Ltd v McCain Foods (Aust) Pty Ltd [2001] FCA 518 [14] (Ryan). I note that the five element formulation was adopted by Flick J in Sydney Medical [2016] FCA 763 at [24].
[47][1990] 1 WLR 491, 499 (Lord Oliver).
The tort of passing off is closely related to the statutory prohibition against misleading or deceptive conduct in trade or commerce. Conduct amounting to passing off will also generally constitute misleading or deceptive conduct, and it follows, as Lehane J has said ‘it is not easy to imagine circumstances in which, if there is no misleading or deceptive conduct on the part of a defendant, the defendant will nevertheless be found to have made a relevant misrepresentation for the purpose of a claim in passing off.’[48]
[48]Philips Electronics NV & Philips Electronics Australia Ltd v Remington Products Australia Pty Ltd (1997) 39 IPR 283 (Lehane J).
The legal principles relevant to actions brought pursuant to the statutory provisions of the ACL are highly relevant and applicable to the element of misrepresentation in passing off. In some circumstances, the inquiry will be the same: did the defendant represent to the relevant section of the public that the goods or services offered by it, were the same as, or associated with, those of the plaintiff?[49]
[49]Telmak (1989) 89 ALR 48, 67 (Wilcox and Einfeld JJ).
Further, although an identifiable reputation is a separate element in the tort, the presence (or absence) of that identifiable reputation is an important factor in considering whether consumers have been, or are likely to be, misled or deceived under the ACL.[50] As Perram J observed in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd in relation to the packaging of goods, and as is equally applicable to the reputation attaching to a business name:[51]
In cases such as the present it is, of course, necessary to identify the features of the applicant’s packaging in which a reputation is said to inhere for it is the existence of that reputation which the tort protects. So too, in the context of the corresponding claim under s 52 it is the reputation in those features which is the springboard for the argument that consumers are deceived by a particular imitation. Thus although the interests protected by the two actions are different both indispensably require the identification of features known to the public mind. (emphasis added)
[50]Cadbury (2007) 159 FCR 397 [99] (Black CJ, Emmett and Middleton JJ); Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCA 606 [22] (Perram J) (‘Mars Australia’); Nutrientwater Pty Ltd v Baco Pty Ltd [2010] FCA 2 [89]-[91] (Kenny J).
[51]Mars Australia [2009] FCA 606 [22] (Perram J).
Consideration
In my opinion the plaintiff has failed to establish that in all of the circumstances the use by the first defendant of the name Mornington Peninsula Eye Clinic will lead the relevant identified classes of persons into error by assuming that it is in fact Peninsula Eye Centre or associated with Peninsula Eye Centre. Further, I do not consider that there is any real chance or possibility that such classes of persons would be so misled. As the conduct, namely the use of the name Mornington Peninsula Eye Clinic is not misleading and not likely to mislead, the claims, which require and are underpinned by such conduct, must fail.
As the authorities clearly establish, the generic and descriptive character of the name Peninsula Eye Centre requires the plaintiff to establish as a fact, by sufficient cogent evidence, that the name has acquired such a distinctive and secondary meaning in the minds of the respective classes of persons, that they will be misled (or likely to be misled) by the suggested comparable (but not insignificantly different) descriptive name, Mornington Peninsula Eye Clinic, into believing that it is, or is associated with the plaintiff’s practice. The evidence does not establish these facts. As the authorities point out, mere confusion and uncertainty will not necessarily be misleading.
I am satisfied that the plaintiff has not established any secondary meaning in the word ‘peninsula’ when used in isolation. As the plaintiff conceded, it does not claim a monopoly over that word and geographic identifier.[52] The evidence of Drs Wolfe and Bambery do not provide a foundation upon which this finding could reasonably be made. Further, I doubt whether the word ‘peninsula’ could ever become distinctive given that it is a very common English word.[53]
[52]Nor does the plaintiff claim rights over the phrases ‘eye clinic’ or ‘eye centre’.
[53]See the observations of Emmett J in respect of the word, ‘connect’: Connect.Com.Au (2000) 178 ALR 348, 549 [57] (Emmett J).
In any event, the promotional materials to which I have referred (including the website, referral pads, signage and so on) do not refer to the business using this singular term. They refer to the business using its full name, Peninsula Eye Centre. In my opinion, the only name or phrase that could potentially possess a secondary meaning is the full trading name of the plaintiff, namely ‘Peninsula Eye Centre.’ Indeed, this was the primary contention of the plaintiff.
The authorities make clear that, as words that are descriptive of a location and business function, ‘Peninsula Eye Centre’ would require substantial use in the relevant market for the necessary degree of distinctiveness to be established in the minds of the relevant classes of persons. Even if this is the case, a variation of the words (indeed, even a slight variation) may be sufficient, as in this case, to avoid the contention that any relevant class of persons have been misled.
The evidence establishes that:
(a) the plaintiff has traded under this name for a significant period of time, being a period of approximately 30 to 35 years;
(b) the plaintiff is the largest provider of ophthalmic services in the Mornington Peninsula shire area;
(c) the plaintiff has engaged in promotional activities in connection with its name, which activities are described above; and
(d) as deposed to by Dr Bambery in his affidavit sworn on 21 December 2018, the Peninsula Eye Centre ‘is very well known’ by general practitioners and optometrists in the area.
It is, however, also clear that the reputation of the plaintiff is not confined to its name alone. The plaintiff’s promotional efforts also focus, to a large degree, on the doctors practising at the centre, and in particular the profile of Dr Wolfe. He is a well-known ophthalmologist in the area, with over 30 years in practice and international standing. His name appears on the signage referred to above, along with the plaintiff’s other ‘brand’, VISTAeyes. Dr Wolfe has also received a degree of celebrity from appearances on a television show known as ‘Real Housewives of Melbourne’. Dr Bambery accepted in evidence, that because of his popularity or personage, the public would generally associate Peninsula Eye Centre with Dr Wolfe. Further, and as the defendants submitted, the fame of Dr Wolfe lessens or counters the risk of confusion to the public.
I am not satisfied that the evidence goes far enough to establish that the name ‘Peninsula Eye Centre’ is sufficiently distinctive and has acquired the necessary secondary meaning in the minds of the relevant classes of persons. There is no evidence from the general public and the other evidence comprising promotional materials, general evidence relating to the growth and duration of the business together with the opinions of Drs Bambery and Wolfe does not go far enough.
The plaintiff complains of the use by the defendants of the word ‘Peninsula’ or the words, ‘Peninsula Eye’. However, the plaintiff has not established that those words, in isolation, have a distinct association with its business. Therefore, the use of only those words could not act as the ‘springboard’ for the alleged deception by what it perceives to be the defendants’ intimation.[54]
[54]Mars Australia [2009] FCA 606 [22] (Perram J).
More importantly however, and even if I assume that the plaintiff has established a secondary meaning in the words, Peninsula Eye Centre, in the minds of the relevant classes of persons, this case is unlike Sydney Medical.[55] The defendants have not used those three words to which the secondary meaning could have attached. They take only ‘Peninsula Eye’ and top and tail those words with two others, ‘Mornington’ and ‘Clinic’. This, in addition to the various factors referred to above (such as its logo, branding, signage and website) are sufficient to differentiate the two in the minds of the relevant classes of persons, so as to avoid any misleading effect.
[55]Where the intimation was the use of the plaintiff’s entire trading name, which possessed the necessary degree of distinctiveness, with the suffixing of ‘2020’.
Further, and having regard to all of the relevant facts and circumstances, I do not consider that the plaintiff has established that there is any relevant, real and sensible danger or likelihood of confusion in the minds of the relevant classes of persons.
Although the businesses do the same work and are competitors, they operate from different locations with different signage, logo and get-up. The specialist doctors (upon which each clinic markets itself) are different. The website domains are obviously different.
As far as the classes of persons to whom the representation was directed (that is, the relevant classes of ‘consumers’) – the parties are generally in agreement as to the identity of these classes but diverge on the degree or relative importance of each of them. Each clinic receives referrals from ophthalmologists, optometrists and general practitioners which are generally situated in the greater Mornington Peninsula shire area. The public (who seek ophthalmic services without a referral) are also a relevant class, however, in my opinion, to a lesser degree. Peninsula Eye Centre sees a great number of patients without a referral, however this group makes up only a small and insignificant number of the patients seen by Mornington Peninsula Eye Clinic.
Dr Bambery gave evidence that he understood that patients and referrers in the relevant area refer to the plaintiff’s clinic as ‘Peninsula’. Dr Wolfe gave evidence that he understood his practice to be known as the ‘Peninsula Eye Centre’, sometimes as ‘Peninsula’ by itself, and sometimes by the acronym, ‘PEC’. The difficulty of this is that it makes it unclear which ‘variant’ of the plaintiff’s name this contended secondary meaning has attached to. Further, if the public knows the plaintiff’s business by multiple names, the singular name (that is, ‘Peninsula Eye Centre’) may not be as distinctive as it is now contended to be.
I do not accept, and the evidence does not establish, that the identified groups have been or will be misled or confused about the similarity of the names. Further, I do not consider that there is a realistic chance of any of the groups being misled in the relevant sense to the relevant extent and degree other than of course, minor, tolerable and understandable confusion. The names are not the same and confusion is unlikely and has not been demonstrated.
First, there is evidence that a parcel was delivered to the incorrect practice, and that this practice received a telephone call from an individual seeking to deal with the other practice. There is no reason to depart from, and I adopt, the reasoning expressed by Toohey J in Lake Jindabyne.[56] The former is properly characterised as a simple instance of misdelivery, where the parcel bore the correct address and name of the intended recipient. The latter evidences a belief in the mind of the caller that they were dealing with one practice, when in fact they were dealing with the other. It is confusion that arises in respect of street addresses or telephone numbers and not as a consequence of the plaintiff having established the secondary meaning contended. Put simply, these two pieces of evidence demonstrate nothing more than mere confusion that does not rise high enough as to demonstrate that any person has been misled or deceived.
[56]Lake Jindabyne (1985) 8 FCR 279, 285 (Toohey J).
Next, there is evidence of the website of Armadale Eye Clinic that erroneously stated that Dr Roufail practised at the ‘Peninsula Eye Clinic, Mornington’. Dr Roufail conceded that he was unable to give precise numbers, but gave evidence that the website attracted very few visitors and there was no evidence before the Court of any person having been deceived by that misstatement. The error has since been rectified and so it cannot mislead or deceive in future. In any event, the misstatement communicated is that Dr Roufail practised at ‘Peninsula Eye Clinic, Mornington’, a clinic which does not (and never did) exist. It does not mislead or deceive in the manner contended by the plaintiff, that is by representing some association between the practices of the plaintiff and first defendant. This evidence does not assist the plaintiff.
Then, there is the evidence given by Drs Wolfe and Bambery, to the effect that it is likely that the various classes would be misled or deceived. I note the observations made by the Full Court of the Federal Court (Gummow, French & Hill JJ) in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd:[57]
Mere expressions of opinion that the use by another trader of the same name is surprising or confusing does not go any way to establishing distinctive or secondary meanings for substantially descriptive words. In our opinion this aspect of the appeal fails.
[57]Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261, 271 (Gummow, French & Hill JJ).
Drs Wolfe and Bambery are ophthalmic surgeons. They are not confused or misled or deceived. They may be able to give an opinion as to the conditions under which an ophthalmologist may give a tertiary referral, or perhaps, the conditions under which they would receive a referral more generally. However, any evidence given as to the likelihood of confusion on the part of general practitioners, optometrists or the public generally should be approached with caution. It is in the nature of a ‘mere expression of opinion’. Indeed, there no direct evidence before this Court from a member of these classes, or survey evidence in respect of them, of the potential likelihood for them to be confused.
I will briefly deal with each of the classes of persons that may potentially be misled. First, there are ophthalmologists. I find it highly unlikely that ophthalmologists, as a source of referrals to other ophthalmologists, would not know or be able to readily discern who is practising in their own field and where they practise. The evidence discloses that they are competent and capable of leading a patient, without error, to either of the clinics or to an intended named doctor. Indeed, Dr Bambery conceded that it was unlikely that another ophthalmologist would mistakenly refer a patient, given that they are a ‘tight-knit group.’
Next, there are optometrists. Dr Bambery similarly conceded that it was unlikely that an optometrist would mistakenly refer a patient once they were aware of the two practice names. He accepted, in respect of both optometrists and ophthalmologists, that the decision to refer a patient is not a ‘flippant’ one. It is one to which they pay attention to detail. Further, Drs Roufail and Van Heerden have sought to contact this class, via a letter, continuing professional development flyer and session and personal visits, in order to inform them of the existence of their new practice, Mornington Peninsula Eye Clinic, and the fact that they now practise there, and not with the plaintiff.
Dr Bambery accepted that these traits (that is, attention to detail and careful deliberation in the process of referrals) are shared by general practitioners. He stated that there was one difference in respect of this class (which he qualified by stating it was a difference, however not a ‘major one’), namely, they are under time pressure. He also said, that while in general a referral would be made to a specific doctor, in acute or urgent situations (which he accepted was rare for general practitioners), it was more likely that the patient would be referred by the general practitioner to an ophthalmology clinic, and whoever may then be available to accept care of the patient.
However, general practitioners do not see urgent patients on a regular basis and in the ordinary course of business they have sufficient time to investigate which clinic or doctor they intend to refer a patient to. Dr Roufail gave evidence that the vast majority of referrals received by him are on letterhead, and are generally preceded by a telephone call between the referrer and his clinic so that the referral may be discussed and an appointment made. Logically, the greater the extent and duration of communication and thought spent in the referral process, the lower the likelihood would be of a mistaken referral. Further, I cannot accept the submission that they would be unable to distinguish between the referral pads of the plaintiff and first defendant. As discussed, those referral pads are distinct, in terms of paper size, style and branding. They also (in the case of the first defendant, at least) name the doctors practising at the clinic.
As for the public (that is, patients without a referral), there is no satisfactory evidence before the Court, that the public has been, or is likely to be misled.
In any event, the deception (and consequent loss) asserted is said to result in a patient mistakenly attending one clinic (when they have not been referred), or a doctor mistakenly referring a patient to this same clinic, when they intended to attend or refer to the other clinic. As for the public, the prospect of loss and the likelihood of confusion is de minimis. The Mornington Peninsula Eye Clinic sees a very small proportion of patients without a referral. It is an insignificant portion of their patient base.[58] As for mistaken referrals, Drs Roufail and Van Heerdan gave evidence that the vast majority of referrals received by them name each of them as a specific doctor. In these circumstances, a referrer is seeking out an individual ophthalmologist (based on their individual and specialised expertise, skill and reputation) and has referred to them. It is untenable to suggest that, for example, a referrer would refer to Dr Roufail by name, on the belief that he continues to practise at the plaintiff’s clinic, and had they been aware that he did not, they would no longer refer the patient to him. Put another way, I consider it unlikely that a named referral would be received solely on the basis of the clinic’s reputation, quite aside from the reputation of the individual ophthalmologist.
Intention to deceive
[58]Like Lake Jindabyne, the clientele of the two businesses differ in this respect.
There is one further matter to be dealt with separately. The plaintiff submitted that the defendants intended to adopt a name similar to the plaintiff, in order to take advantage of a purported association with the plaintiff. I note that proof of an intention to deceive the public, is not, of itself, sufficient to establish a finding of misrepresentation. The question remains whether the plaintiff has established the necessary effect of misrepresentation.[59]
[59]Telmak (1989) 89 ALR 48, 65 (Wilcox and Einfeld JJ).
Intention is relevant, insofar as evidentiary issues are concerned. Where a plaintiff can establish an intention to deceive, the court can more readily infer that a defendant who has set out to deceive has been or is likely to be successful in achieving that aim, that is, that they will succeed in using the brand, name or identifying get-up in a manner that will, or is likely to mislead the public.[60] Accordingly, and in very limited factual situations, a finding that a defendant has set out to deliberately cause confusion or deceive the public may suffice to make him or her liable, notwithstanding that intention is not a required element for passing off or the provisions prohibiting misleading or deceptive conduct.[61] In all of the circumstances, there must be still a real and not remote chance of deception occurring.[62]
[60]Campomar Sociedad, Limitada v Nike International Ltd (2000) 169 ALR 677, 686 [33] (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ) Deckers Outdoor Corp Inc v Farley (No 2) [2009] FCA 256 [87] (Tracey J).
[61]Bridge Stockbrokers Ltd v Bridges (1984) 57 ALR 401, 415. As to intention to mislead not being a required element to make out a claim for misleading or deceptive conduct, see Hornsby (1978) 18 ALR 639, 651 (Jacobs J).
[62]Applied Business Technology Pty Ltd v Grandmaster Computers Pty Ltd (1999) 161 ALR 31, 40 [47] (Katz J).
The evidence does not support such a finding. Dr Van Heerdan registered the name, Mornington Peninsula Eye Clinic. He gave evidence that he and Dr Roufail wanted to put an eye clinic on the Mornington Peninsula, and as such they selected the name, Mornington Peninsula Eye Clinic. This name (and the branding and logo style discussed earlier) was selected so that it would be in the same format as Armadale Eye Clinic, the other clinic at which Drs Van Heerden and Roufail practised. They intended for there to be an associated between those two clinics, and not as between Mornington Peninsula Eye Clinic and Peninsula Eye Centre.
Further, during his cross-examination, Dr Roufail gave evidence of other names that the defendants had attempted to register, including the name ‘Mornington Eye Clinic’. This was a name that the defendants had wanted to use, but was registered to another business and therefore unavailable to them. The fact that they attempted to register this name is, of course, inconsistent with the allegation that the defendants intentionally adopted a name containing the word ‘Peninsula’.
Conclusion
The plaintiff has not established that the use by the first defendant of its business name, Mornington Peninsula Eye Clinic is conduct that has, or is likely to, mislead or deceive the public. The claim of misleading or deceptive conduct must fail.
For the reasons outlined above, the claim of passing off must also fail.
Disposition
I will hear from the parties in regards to final orders and costs.
Schedule 1 – Logo of the Peninsula Eye Centre
Schedule 2 – Logo of the Mornington Peninsula Eye Clinic
Schedule 3 – Logo of the Armadale Eye Clinic
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