Rumcoast Holdings Pty Ltd v Prospero Publishing Pty Ltd

[1999] WASC 176

RUMCOAST HOLDINGS PTY LTD -v- PROSPERO PUBLISHING PTY LTD [1999] WASC 176

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[1999] WASC 176
Case No:	CIV:1839/1999	Heard:	1 & 2 SEPTEMBER 1999
Coram:	TEMPLEMAN J	Delivered:	24/09/99
No of pages:	36	Judgment Part:	1 of 1
Result:	Plaintiff successful in establishing passing off and misleading and deceptive conduct
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Parties:	RUMCOAST HOLDINGS PTY LTD (ACN 081 972 947) PROSPERO PUBLISHING PTY LTD (ACN 085 993 371)
Catchwords:	Trade practices Misleading and deceptive conduct Tort Passing off National publication of pornographic magazine with deceptively similar name to Western Australian lifestyle magazine Reputation across State jurisdictional boundaries Whether Western Australian magazine had established a national reputation Whether using the same name for magazines of very different nature and content constitutes a misrepresentation Remedies for passing off and contravention of Trade Practices Act
Legislation:	Service and Execution of Process Act 1992 (Cth) Trade Practices Act 1974 (Cth), s 52
Case References:	A G Spalding & Buss v A W Gamage Ltd (1915) 32 RPC 273 B M Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1977) 51 ALJR 254 Bridge Stockbrokers Ltd v Bridge (1984) 5 IPR 81 ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193 Emap Elan Ltd v Pacific Publications Pty Ltd (1997) 37 TPR 1 Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1977-78) 140 CLR 216 Jones v Dunkel (1958) 101 CLR 298 Motorcharge Pty Ltd v Motorcard Pty Ltd (1982) ATPR 40-302 Norman Kark Publications Ltd v Odhams Press Ltd [1962] 1 WLR 380 Pfizer Pty Ltd v Jansen Pilay Pty Ltd (1992) CLS Fed 108 S & I Publishing Pty Ltd v Australian Surf Lifesaver Pty Ltd (1999) ATPR 41-667 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 The Cricketer Ltd & Newspress Pty Ltd v David Syme & Co Ltd [1974] VR 477 Totalizator Agency Board v Turf News Pty Ltd (1967) VR 605 Australian Home Loans Ltd v Phillips (1998) 40 IPR 392 Australian Surf Life Saver Pty Ltd v S & I Publishing Pty Ltd (1998) 43 IPR 595 Burswood Management Ltd v Burswood Casino Motel/Hotel Pty Ltd (1985) 7 FCR 186 Campomar Sociedad Limitada & Anor v Nike International Ltd & Anor (1997) 156 ALR 316 Harrods Limited v R Harrod Limited [1923] 41 RPC 74 Hogan v Pacific Dunlop Ltd (1988) 12 IPR 225 Hutchence v South Seas Bubble Co Pty Ltd (1986) 64 ALR 330 Mcilhenny v Blue Yonder (1997) 149 ALR 496 Nicholas v Borg (1986) 7 IPR 1 R & C Products Pty Ltd v Abundant Earth Pty Ltd (1984) 55 ALR 38 Radio Corporation Pty Ltd v Disney (1937) 57 CLR 448

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : RUMCOAST HOLDINGS PTY LTD -v- PROSPERO PUBLISHING PTY LTD [1999] WASC 176 CORAM : TEMPLEMAN J HEARD : 1 & 2 SEPTEMBER 1999 DELIVERED : 24 SEPTEMBER 1999 FILE NO/S : CIV 1839 of 1999 BETWEEN : RUMCOAST HOLDINGS PTY LTD (ACN 081 972 947)

Plaintiff

AND

PROSPERO PUBLISHING PTY LTD (ACN 085 993 371)
Defendant

Catchwords:

Trade practices - Misleading and deceptive conduct - Tort - Passing off - National publication of pornographic magazine with deceptively similar name to Western Australian lifestyle magazine - Reputation across State jurisdictional boundaries - Whether Western Australian magazine had established a national reputation - Whether using the same name for magazines of very different nature and content constitutes a misrepresentation - Remedies for passing off and contravention of Trade Practices Act

Legislation:

Service and Execution of Process Act 1992 (Cth)

Trade Practices Act 1974 (Cth), s 52

(Page 2)

Result:

Plaintiff successful in establishing passing off and misleading and deceptive conduct

Representation:

Counsel:

Plaintiff : Mr C J L Pullin QC & Mrs M C Lynn
Defendant : Mr C B Edmonds

Solicitors:

Plaintiff : Ilbery Barblett
Defendant : Clayton Utz

Case(s) referred to in judgment(s):

A G Spalding & Buss v A W Gamage Ltd (1915) 32 RPC 273
B M Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1977) 51 ALJR 254
Bridge Stockbrokers Ltd v Bridge (1984) 5 IPR 81
ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193
Emap Elan Ltd v Pacific Publications Pty Ltd (1997) 37 TPR 1
Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1977-78) 140 CLR 216
Jones v Dunkel (1958) 101 CLR 298
Motorcharge Pty Ltd v Motorcard Pty Ltd (1982) ATPR 40-302
Norman Kark Publications Ltd v Odhams Press Ltd [1962] 1 WLR 380
Pfizer Pty Ltd v Jansen Pilay Pty Ltd (1992) CLS Fed 108
S & I Publishing Pty Ltd v Australian Surf Lifesaver Pty Ltd (1999) ATPR 41-667
Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177
The Cricketer Ltd & Newspress Pty Ltd v David Syme & Co Ltd [1974] VR 477
Totalizator Agency Board v Turf News Pty Ltd (1967) VR 605



(Page 3)

Case(s) also cited:

Australian Home Loans Ltd v Phillips (1998) 40 IPR 392
Australian Surf Life Saver Pty Ltd v S & I Publishing Pty Ltd (1998) 43 IPR 595
Burswood Management Ltd v Burswood Casino Motel/Hotel Pty Ltd (1985) 7 FCR 186
Campomar Sociedad Limitada & Anor v Nike International Ltd & Anor (1997) 156 ALR 316
Harrods Limited v R Harrod Limited [1923] 41 RPC 74
Hogan v Pacific Dunlop Ltd (1988) 12 IPR 225
Hutchence v South Seas Bubble Co Pty Ltd (1986) 64 ALR 330
Mcilhenny v Blue Yonder (1997) 149 ALR 496
Nicholas v Borg (1986) 7 IPR 1
R & C Products Pty Ltd v Abundant Earth Pty Ltd (1984) 55 ALR 38
Radio Corporation Pty Ltd v Disney (1937) 57 CLR 448

(Page 4)

1 TEMPLEMAN J: In April 1997 Mr David Robertson Hogan started working towards the publication of a lifestyle magazine in Western Australia. The magazine was to be called "Scoop". Mr Hogan chose that name believing it to be "memorable and distinctive". The first edition was published in September 1997 and was known as the Spring 1997 edition. The magazine has been published quarterly since then. The latest edition, the eighth, was published on 1 June 1999 and is the Winter 1999 edition. Some $500,000 has been invested in establishing and promoting Scoop.

2 Mr Hogan's alter ego is the plaintiff, Rumcoast Holdings Pty Ltd. A small company, with only eight full-time employees, it is the trustee of Mr Hogan's family trust. Although the business was not transferred to the plaintiff until 1 July 1998, nothing turns on that for present purposes.

3 Scoop is a semi-glossy magazine, printed on good quality paper and containing, typically, about 160 pages. It is slightly larger than A4 in size and has semi-stiff covers. The name "Scoop" is printed in white, rounded, capital letters 4 cms high across the top of the cover, against a bright red background. The words "The Essential Western Australian Lifestyle Magazine" appear in small white capital letters against a black background, immediately below. Its retail selling price is $6.95.

4 The Winter 1999 edition, which appears to be typical, contains a number of features, a catalogue of forthcoming events in the winter quarter, and a review of artistic, film, sporting and other events. There are articles relating to food and wine: and other articles relating specifically to Western Australia. The magazine contains also, a large number of good quality advertisements. This is a matter of some importance to which I shall return in due course.

5 Scoop is therefore a magazine directed to people of discerning tastes, who have an interest in Western Australian matters and have the financial ability to indulge their tastes.

6 According to Mr Hogan, and it has not been disputed, between 18,000 and 22,000 copies of each edition of Scoop have been published and distributed. Over eight editions, this represents between 144,000 and 176,000 copies.

7 The plaintiff commenced the action by a writ issued on 30 July 1999. It complains about the activities of the defendant in publishing a magazine with the title "The Scoop" throughout Australia. The plaintiff contends that the defendant is engaging in conduct in trade or commerce which is misleading or deceptive contrary to s 52 of the Trade Practices Act 1974:

(Page 5)

and further, or alternatively, that the defendant is passing off its business and products as and for those of the plaintiff.

8 The plaintiff seeks a number of remedies including injunctions and damages or an account of profits.

9 The defendant's business is quite different from the plaintiff's: and The Scoop has nothing in common with Scoop. Although both the publications are magazines, the resemblance ends there.

10 The defendant is a member of the Next Media Group of companies which publishes some 18 regular magazine titles and has an annual turnover of approximately $20 million.

11 The defendant started developing The Scoop magazine in February 1999. According to Mr Phillip Keir, the defendant's Managing Director, whose evidence I accept, the defendant chose the name "The Scoop" from some 20 options. The defendant was unaware of the existence of the plaintiff's magazine until two or three days before the first issue of The Scoop was published.

12 The Scoop was designed to make substantial inroads into the male weekly magazine market. That objective is set out succinctly in the advertising rate card for The Scoop in which the defendant announced the launch of the new magazine with a view to attracting advertisers. This document announced that The Scoop would go on sale on 21 July 1999 with a print run of 200,000 and would be distributed nationally through newsagencies and service stations. The "core target audience" was said to be "young, male blue collar" workers. The object of the magazine was to give these consumers:

"…a weekly title which reflects the lives they lead and the things that are important to them.

One of those things is sex, to be sure. The SCOOP will carry some very sexy pictorials, but of course will be cleared by the Office of Film and Literature Classification as an 'Unrestricted' publication, available nationally through newsagents and service stations. But we will also include first class photographic and feature work, as well as a wide variety of departments covering all the things that make a young bloke's life worthwhile - beer, food, sport, cars, entertainment, crime stories and topical events. In short while the tone will be sexy and irreverent, it won't be smutty, adolescent or crude. Much."

(Page 6)

13 By the date of the trial six issues of The Scoop had been published and a total of 660,000 distributed nationally. There is no evidence as to sales figures beyond issue one.

14 Only that issue was tendered as evidence. I received also a copy of issue six: not as an example of the magazine itself, but as evidence of the way in which the magazine is now sold, in a sealed clear plastic envelope.

15 I assume that issue one of The Scoop is typical. It was not suggested otherwise. If it is typical, then it does not appear to live up to the expectation of balance created by the advertising material.

16 The Scoop has a quarto-sized soft cover format. It is therefore slightly smaller than A4. It is Mr Keir's evidence that the soft cover characteristic is intentional, being "…an important consideration to consumers of adult male magazines that the publication be foldable, easily disposable and secretable".

17 On the front cover, the name "The Scoop" appears in a box at the top left hand corner, in white elongated capital letters, outlined in black against an ochre background. The letter S is 5.5 cm high: the other letters are 4 cm high. The word "The" is superimposed on the "S", in small white capitals over a black rectangle. Immediately under the name, the words "The Weekly That's Stacked!" appear in small white lettering against a red background.

18 The front cover of issue one features prominently a semi-glossy photograph of five young women who are unclothed and posing in various positions which result in their breasts being substantially exposed. This, by contrast to a small picture of Adolf Hitler advertising an article about German wartime plans for the occupation of Tasmania.

19 The cover announces that the magazine includes "all the nudes that's fit to print" and "1517 breasts!". The magazine contains a few short articles, written in a somewhat vulgar style. These include "Sick Hicks Trick Chicks", which is concerned with the Mexican sport of torturing chickens; "There's a Bronto in the Congo", about the possible existence of prehistoric monsters in present day in central Africa; and "Nuclear Niblicks win the Golf War", which is about nuclear missiles and golf clubs made from those sources.

20 There is also a two page spread entitled "The Week" which is said to be:

(Page 7)

"The Scoop's 7 day guide to everything that matters (& some other shit….)".

21 On almost every page other than those devoted to advertisements, there are semi-glossy colour photographs of young women in various stages of undress and in various erotic poses. The magazine contains also a substantial number of advertisements for what may be described as "telephone sex". They occupy some 27 pages out of 110. Almost all of these advertisements contain black and white photographs of young women and young men, either undressed or dressed in a sexually provocative manner.

22 Although the second issue of The Scoop was withdrawn from sale in Western Australia because of censorship problems, it has now been accepted throughout Australia as an unrestricted publication suitable for mature readers but not recommended for readers under the age of 15 years. A notice to this effect, is printed on the front cover of issue 6, in a box containing the Office of Film and Literature Classification stamp.

23 Both the plaintiff and the defendant have applied to register the names of their respective magazines as trade marks. Neither has been successful.

The trial

24 Having commenced the action, the plaintiff immediately sought an interlocutory injunction to restrain the defendant from publishing The Scoop. The matter came before the Judge in charge of the expedited list. He suggested to the parties that their respective interests might better be served by proceeding directly to the trial. Very sensibly the parties accepted that this would be so. The Judge then gave directions for the further conduct of the matter. Pleadings were dispensed with and the parties were given leave to file affidavit evidence. The action was admitted to the expedited list.

25 The trial was conducted on affidavit evidence, but neither party sought to cross-examine any of the deponents. It has not therefore been necessary for me to resolve credibility issues. However, there are issues about the proper inferences to be drawn from certain primary evidence.

26 As I have noted, the broad issues are whether the defendant's conduct constitutes a contravention of s 52 of the Trade Practices Act or passing off. It will be convenient first to consider the passing off claim.

(Page 8)

Passing-off

27 The law relating to passing-off was reviewed exhaustively by the Full Court of the Federal Court in ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193.

28 There, Lockhart J (at 231) said:

"It is now beyond argument that the plaintiff's right which the law of passing-off protects isa proprietary right of goodwill or reputation of his business likely to be injured by a defendant's conduct...

On examination of the relevant authorities it becomes clear that the basis of the cause of action lies squarely in misrepresentation, for its underlying rationale is to prevent commercial dishonesty. The tort of passing-off protects the business of the plaintiff with its many facets: its assets, goodwill and reputation. It stops persons and companies obtaining a commercial advantage through wrongfully taking the attributes of another's business if it causes or is likely to cause that other person's business some damage."

29 As Gummow J said (at 246):

"Within the passing-off action, there is an accommodation and adjustment of three competing interests. First that of the plaintiff in protecting the commercial advantages flowing from his efforts and investment, secondly that of the defendant in being free to attract purchasers for his goods and services by what appears to him to be an effective means, and thirdly that of consumers in selecting between competing goods and services without the practice on them of misrepresentations."

30 However, the law relating to passing-off is not limited to situations in which there are competing goods and services. As Gummow J went on to point out, later in his judgment (at 260):

" … the plaintiff may complain not of the risk of diversion of sales, the parties not being in direct competition, but that the goodwill of the plaintiff suffers from an injurious association with the goods or services of the defendant. Three examples will suffice. Harrods Ltd v R Harrod Ltd (1923) 41 RPC 74 concerned a complaint by the London department store that its

(Page 9)

name was being used for a money-lending business; Totalizator Agency Board v Turf News Pty Ltd [1967] VR 605 concerned a complaint as to a false connection between a government established betting service and a tipster's newspaper. In Annabel's (Berkeley Square) Ltd v C Schock [1972] RPC 838 the famous London nightclub complained of the use of its name for what the defendant, perhaps euphemistically, described as an 'escort service'.

An earlier example is provided by Eastman Photograph Materials Co Ltd v John Grffiths Cycle Corp Ltd (1898) 15 RPC 195 where Romer J held it would injure the plaintiff, which had used 'Kodak' for its cameras, if the defendant were not restrained from using 'Kodak' to identify their bicycles."

31 Gummow J went on to say that it was of such cases as those referred to above that learned Hand J said in an American case:

"If another uses [the plaintiffs mark], he borrows the owner's reputation, whose quality no longer lies within his own control. This is an injury, even though the borrower does not tarnish it, or divert any sales by its use; for a reputation, like a face, is the symbol of its possessor and creator, and another can use it only as a mask. And so it has come to be recognised that, unless the borrower's use is so foreign to the owner's as to insure against any identification of the two,it is unlawful...."

32 To a similar effect, Lockhart J (at 200) quoted from the speech of Lord Parker of Waddington in A G Spalding & Buss v A W Gamage Ltd (1915) 32 RPC 273 that:

"…although the plaintiff and the defendant were not competing traders in the same line of business, a false suggestion by the defendant that their businesses were connected with one another would damage the reputation and thus the goodwill of the plaintiff's business."

33 Although the words "goodwill" and "reputation" are both used in the passages set out above, they may be regarded as synonymous in this context. This was made plain by Lockhart J (at 231):

"Reputation is the key business facet that passing-off protects. In my view, the requirement of goodwill was not meant to have a different meaning to reputation and its inclusion only serves to

(Page 10)

complicate the matter. Further, by using the notion of reputation as distinct from goodwill, the law of passing-off is not trammelled by definitions of goodwill developed in the field of revenue law."

34 As Gummow J pointed out (at 246-7), attempts to produce a definition of the tort of passing-off which is both succinct and comprehensive have had mixed success. This is because the law "contains sufficient nooks and crannies to make it difficult to formulate any satisfactory definition in short form." However, his Honour noted that "the classical trinity" of reputation, misrepresentation and damage serves to emphasise three core concepts in this area of the law.

35 Fortunately, it is not necessary for me to attempt a universal definition of the law of passing-off. That is because, in the present case, the plaintiff does not complain about loss of revenue through diversion of sales. It contends that the reputation which Scoop now enjoys is likely to suffer from an injurious perception of association with The Scoop magazine published by the defendant. That being so, the relevant principles may be stated in a more limited way. That is, the defendant's conduct in publishing and distributing The Scoop magazine will constitute passing-off if:

1. the plaintiff has established a reputation for Scoop; and

2. the defendant's conduct constitutes a misrepresentation that The Scoop is associated in some way with Scoop; and

3. the belief that such association exists is, or is likely to be, injurious to the plaintiff

I shall deal with each of those propositions in turn.

Has the plaintiff established a reputation for Scoop?

36 The plaintiff seeks an injunction restraining the defendant from using the word "Scoop" in connection with any aspect of its business. Thus the injunction, if registered in every jurisdiction pursuant to the Service and Execution of Process Act 1992 (Cth), would prevent the defendant from publishing and distributing The Scoop anywhere in Australia.

37 As I have noted above, Scoop is essentially a Western Australian enterprise which focuses on this State and events which are to take place here: it is distributed principally in Western Australia. However, the defendant does not concede that Scoop has acquired any reputation in this

(Page 11)

State: and it contends that the magazine has acquired no reputation elsewhere in Australia.

38 Before turning to the evidence, I should refer to the criterion by which reputation is to be judged.

39 In ConAgra(supra),at 237, Lockhart J said:

"In my opinion the plaintiff must prove that there are within the jurisdiction in which the defendant is carrying on business a substantial number of persons who are aware of the plaintiffs product".

French J posed a similar test (at 267) which was applied by Hill J in Emap Elan Ltd v Pacific Publications Pty Ltd (1997) 37 TPR 1, 7.

40 Both ConAgra and Emap were cases in which a foreign applicant sought to restrain alleged passing off and misleading or deceptive conduct in Australia. The "jurisdiction in which the defendant is carrying on a business" was therefore the whole of Australia: both cases were heard in the Federal Court.

41 By contrast in The Cricketer Ltd & Newspress Pty Ltd v David Syme & Co Ltd [1974] VR 477 an earlier case of a similar kind, the issue was whether the foreign plaintiff had established a reputation in Victoria. The focus was on Victoria because the Victorian Supreme Court was exercising only a State jurisdiction: the complaint being in respect of alleged passing off.

42 The present case has been conducted on the basis that in order to obtain the national relief which it seeks, the plaintiff must prove that it has a reputation throughout Australia. The plaintiff contends that it has established such a reputation. It relies principally on the evidence of Mr Hogan which, as I have said, was not contested. It will therefore be sufficient to refer to the relevant evidence in a summary form which reflects my findings of fact.

The number of Scoop magazines published

43 As I have noted above, Mr Hogan's uncontested evidence is that between 18,000 and 22,000 copies of each of the eight editions of Scoop have been published and distributed. It follows that the total number of magazines published and distributed since September 1997 is between 144,000 and 176,000.

(Page 12)

44 Accepting Mr Hogan's evidence as to the way in which Scoop magazine is distributed, I find that:

(a) approximately 35 per cent are distributed to three, four and five star hotels in Western Australia;

(b) approximately 35 per cent are sold by newsagencies and by subscription;

(c) approximately 10 per cent are distributed to hotels, clubs, cafes, restaurants, hair salons and beauty salons in the Perth metropolitan area;

(d) approximately 10 per cent are distributed by direct mail to selected businesses and companies in Western Australia; and

(e) approximately 10 per cent are used for advertising sales and other promotional purposes.

45 By way of explanation, Mr Hogan deposes to the fact that with the exception of the Esplanade Hotel in Fremantle, Scoop is distributed free of charge to every one of the 5,000 three, four and five star hotel rooms in Western Australia and to approximately 795 executive apartments in Perth. 5,795 is 35 per cent of 16,557. However, Mr Hogan says that he commonly receives requests from hotels to which Scoop has been distributed to supply further copies. Although Mr Hogan gives no estimate of the numbers involved, I infer that this, together with the magazines distributed to the executive apartments, accounts for the balance of the 35 per cent. The figures are approximate, in any event.

46 Mr Robert Russell Dawson, the General Manager of the Hyatt Regency Hotel in Perth, deposes to the fact that it has 368 rooms, and that approximately 123,000 visitors stay at the hotel each year. Of those, approximately 55,000 are Australians who normally reside outside Western Australia. By way of clarification of that evidence it was recorded as an agreed fact that:

(1) the figure of 55,000 is an extrapolation of the figures for eight months from 1 January 1999, projected over a 12 month period; and

(2) of those 55,000, some 40,000 are air-crew.

(Page 13)

The sale of Scoop in Western Australian newsagencies

47 I have referred above to the fact that some 35per cent of between 18,000 and 22,000 copies are sold by newsagencies and by subscription. This amounts to between 6,300 and 7,700 copies each quarter.

48 Although Mr Hogan does not say so expressly, I assume that he refers to Western Australian newsagencies. That is the basis on which the plaintiffs submissions were made.

Publication of a Scoop in-flight edition on Qantas Airlink aircraft

49 According to Mr Hogan, between March 1998 and February 1999, between 5000 and 7000 copies of a Scoop in-flight magazine were placed on Qantas aircraft operating the Airlink service within Australia. I find that there were four editions during the relevant period. This would amount to between 20,000 and 28,000 copies.

50 The Scoop in-flight magazine wasvirtually identical to the basic magazine. However, it included an additional eight pages containing Qantas Airlink promotional materials.

51 I accept the evidence of Ms Catherine Luellen Sutherland, an employee of Airlink, that in the period March 1998 and February 1999, the aircraft operating the Airlink service had between them 800 passenger seats.

52 Ms Sutherland deposes to the fact that during the relevant period it was Airlink policy to place a copy of the Scoop in-flight magazine in each passenger seat pocket on all its aircraft.

53 However, Ms Sutherland requested Mr Hogan to provide far more than 800 copies each quarter. The numbers were:

(a) 2700 copies of the March 1998 edition;

(b) 5500 copies of the July 1998 edition;

(c) 5500 copies of the September 1998 edition;

(d) 4100 copies of the December 1998 edition.

54 The total is therefore 17,800 copies, which is well short of the 20,000 to which Mr Hogan deposes. I accept Ms Sutherland's evidence, it being more precise than Mr Hogan's.
(Page 14)

55 If one copy of each four editions of Scoop had been placed on the aircraft, that would have amounted to 3200 copies: not 17,800.

56 Ms Sutherland says that the additional copies were requested "to compensate, in part, for the removal of copies of the in-flight magazines from passenger pockets...."

57 It was submitted by leading counsel for the plaintiff that I should draw the inference that the copies were removed by passengers for further reading and reference. Counsel for the defendant submitted that the wastage might be due to any number of reasons: for example, removal by cleaners.

58 Accepting it to have been the policy of Airlink to place the Scoop magazine in passenger seat pockets, I doubt that cleaners would have been removing the magazines from the aircraft. I think it more probable that copies of Scoop were removed by passengers despite the fact that the in-flight edition bears a note on the front cover (albeit somewhat inconspicuously) "for the pleasure of others please do not remove".

59 Given that Scoop magazine contains a considerable amount of information about places and events in Western Australia, I think it reasonable to infer that the copies were probably removed by passengers.

60 On the basis of Ms Sutherland's evidence, I find that some 14,600 copies of the in-flight Scoop magazine were removed during the relevant period. This is the difference between 17,800 and 3200.

61 I accept the evidence of Mr Grant Pitman, also an employee of Airlink, that during the same period Airlink carried at least one million passengers. On that basis, something less than one passenger in 70 removed an in-flight magazine on departing the aircraft. That does not seem to me to be an unreasonable conclusion.

62 The Airlink network serves a number of destinations in Western Australia including Kalgoorlie, Karratha, Port Hedland, Broome, Tom Price and Paraburdoo. The service links Western Australia with Darwin, Gove and Cairns. There are further links to Alice Springs and Ayers Rock. Adelaide, is served from Perth, via Kalgoorlie. There are separate links between Canberra, Brisbane, Rockhampton, Mackay and Prosperine on the Queensland coast. There is no link with New South Wales, Victoria or Tasmania.

(Page 15)

63 There is no evidence about how many of the one million or so passengers who had the opportunity of reading Scoop, actually did so.

64 However, I accept Ms Sutherland's evidence that the arrangement with the plaintiff ceased after February 1999 because she formed the view that "Airlink required an inflight magazine with a greater national focus". I infer from this evidence (and from the evidence about replacement) that passengers were reading Scoop magazine in sufficiently large numbers to justify its provision.

Placement of Scoop with the Western Australian Tourism Commission

65 In June 1999 the Western Australian Tourism Commission purchased 35 copies of the winter edition of Scoop. Further, since March 1999 a free copy of Scoop has been provided to each of the consultants at the Western Australia Centre in Forrest Chase Perth. An unspecified number of additional copies have been provided for purchase by tourists visiting the centre.

Dealings with advertisers and potential advertisers in Scoop

66 Scoop is to a large extent, an advertising vehicle. Almost every double page spread contains one or more good quality advertisements. These relate almost exclusively to Western Australian products or services. The revenue derived by the plaintiff from selling advertising space far exceeds sales revenue. Mr Hogan deposes to the fact that for the winter 1999 edition, $230,000 was derived from advertising and only $20,000 from sales of the magazine. Mr Hogan expects that advertising revenue will be slightly greater for the spring 1999 edition, while sales revenue will be about the same.

67 Although the advertisements appearing in Scoop are almost exclusively directed to products or services available in Western Australia, Mr Hogan says, and I accept, that some of the businesses which advertise in Scoop have their head offices in Sydney. Mr Hogan says that he is often required to deal with advertising agents in the Eastern States. He gives, as an example, the agent for Jigsaw, a women's clothing retailer.

68 Further, Mr Hogan says, and I accept, that there are numerous examples of "co-operative advertising" in the Scoop magazine. This is advertising which is funded principally by a national or international manufacturer and partly by a local business which acts as the retailer for the principal advertiser's goods. In the course of negotiating for

(Page 16)

co-operative advertisements, Mr Hogan deals directly with advertisers or advertising agents in the Eastern States.

Advertising at the WACA Ground

69 Since October 1998 Scoop has had a billboard at the WACA Ground from which a number of cricket and Australian Rules football games have been televised. The billboard is approximately 1 metre high and 10 metres in length. Photographs taken at the WACA Ground show the billboard to be reasonably prominent. It bears the name Scoop in white letters against a red background in the same style, colours and proportions as they appear on the front cover of each magazine.

70 Evidence was given of the results of surveys of advertising exposure as a result of the television coverage of these matches. I find as a fact that between 28 and 30 November 1998, in the course of a test match between Australia and England, the Scoop billboard appeared on television screens:

eight times in Sydney

eight times in Melbourne

nine times in Brisbane

eight times in Hobart

five times in Perth

Further, during a match between Australia and Sri Lanka on 3 January 1999, the Scoop billboard appeared on television screens:

nine times in Sydney

nine times in Melbourne

nine times in Brisbane

nine times in Hobart, and

six times in Perth.


Each sighting was of approximately three seconds duration.

Advertising in the Subiaco Post Newspaper

71 Mr Hogan deposes to the fact that an advertisement for Scoop has been placed in the "Subiaco Post", a suburban newspaper circulating in the greater Subiaco area. I find that one advertisement was placed, on 8 December 1998. There is no evidence as to the circulation figures.

(Page 17)

Cinema advertising in Western Australia

72 A slide advertising Scoop was shown on Sunset Cinema screens in Kings Park between 4 February and4 April 1999 and at Margaret River between 28 December 1998 and 30 January 1999. Each Sunset Cinema has a seating capacity of 500 and shows approximately seven films each week. There is no evidence about the numbers of persons attending these performances.

Radio advertising

73 Scoop magazine was the subject of a radio advertisement played on Perth radio station 94.5FM on approximately 35 occasions over one week in late September 1998. There is no evidence as to the number of listeners who are likely to have heard the advertisement, nor as to its text.

Point of sale advertising

74 Approximately 300 posters are sent with each successive issue to newsagents who sell Scoop magazine. The posters are reproductions of the front cover of the magazine. They appear to be larger than the magazine. From the photographs tendered in evidence, I find that the magazines and point of sale material are displayed prominently in a number of newsagents in such a way as to create a considerable impact on potential purchasers.

The Scoop Privilege Club

75 Since 1 June 1999 the plaintiff has been operating a Scoop Privilege Club. Membership of the club involves payment of an annual fee which entitles the member to a years subscription, together with monthly updates by mail about the latest arts, lifestyle and sporting events in Western Australia; the opportunity to reserve VIP seating at selected events in Perth and discount packages applying to various retail and leisure services in Western Australia.

76 There are currently some 400 members of the Privilege Club, of which 27 are resident or located outside Western Australia. I use the word "located" because some of the subscribers appear to be corporations. For example, one subscriber is the Australian Tourist Commission in Woolloomooloo, New South Wales.

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77 It is therefore reasonable to assume that many of the 27 Scoop magazines will come to the attention of persons other than the individual subscribers.

The establishment of the Scoop Web Site

78 Also since June 1999 the plaintiff has operated an internet web site which provides on-line information about arts, lifestyle and sporting events in Western Australia. There is no evidence about the number of times that web site has been accessed, or the identity or location of the persons concerned.

Miscellaneous advertising

79 The plaintiff has exhibited Scoop displays at Bridal Expos and at the Burswood Food and Wine shows in 1998 and 1999: and at the Fremantle Travel Expo in 1998.

Does the evidence establish reputation?

80 Having regard to the way in which the case has been conducted, I think it appropriate first to consider whether the plaintiff has proved it has a reputation in Western Australia. The relevant question is whether the plaintiff has proved that within Western Australia there are a substantial number of persons who are aware of the Scoop magazine.

81 The word "substantial" must be put into a context. In the case of a publication, it must relate to persons who are probable or potential purchasers. The "probable" formula was adopted by Wilberforce J in Norman Kark Publications Ltd v Odhams Press Ltd [1962] 1 WLR 380, 384. It was applied in The Cricketer case (supra).

82 Similarly, in S & I Publishing Pty Ltd v Australian Surf Lifesaver Pty Ltd (1999) ATPR 41-667, a case concerning publications with the titles "Triathlon Sports" and "Triathlon & Multi Sport Magazine", a Full Court of the Federal Court said that the relevant class of persons were those "interested" in purchasing magazines concerned with triathlon sports (at 42,508). I take that to mean people with a serious interest: probable or potential purchasers.

83 In the present case, leading counsel for the plaintiff submitted that the relevant class of persons included readers, advertisers and newsagents. That, I think, is too wide. It is true that the plaintiff derives substantial

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revenue from advertisers. However, advertisers transact business with the plaintiff because of its circulation: and hence, its reputation. If that reputation was damaged as a result of passing-off or misleading or deceptive conduct, advertisers might cease to deal with the plaintiff, which would suffer a consequential loss of revenue. But that would result from the effect of the relevant conduct on purchasers or potential purchasers of the magazine who became disinterested in purchasing it.

84 Leading counsel for the plaintiff submitted that the plaintiff was at risk of losing potential advertising business from advertisers who might be telephoned by Mr Hogan of "Scoop", but who were not available to speak to him. It was submitted that if such persons believed Mr Hogan was representing "The Scoop" and knew the nature of that magazine, they would not trouble to return his call.

85 While I accept that Mr Hogan has a genuine fear of losing advertising business in this way, I do not believe his concern to be well founded. That is because:

1. after the publication of six editions of the defendant's magazine, there is no evidence from Mr Hogan (or any other of the plaintiff's employees or representatives) of advertisers failing to return calls; and

2. I should have thought it would be relatively easy to guard against this possibility by leaving a suitably worded message for the potential advertiser to ensure that there could be no confusion between Scoop and The Scoop. I note that in S & I Publishing Pty Ltd (supra) the Full Court referred to evidence which had been given by an advertiser. Their Honours said:


"One thing is clear. There was no likelihood that advertisers could be confused."

This, I think, reflects the fact that advertisers might reasonably be expected to exercise some care in the pursuit of their business interests. However, that is something of a digression. In my view, the essential point is that neither advertisers nor newsagents are consumers of the magazines in the sense required in order to establish its reputation.

86 The evidence to which I have referred above, is that between 18,000 and 22,000 copies of Scoop are distributed each quarter, largely within Western Australia. This, I think, is the appropriate starting statistic, rather than total numbers distributed since 1997. I adopt that approach because I expect that many readers would be regular purchasers. On any view,
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22,000 is a substantial number: and it is obviously conservative. It does not matter that a proportion of those copies may be seen by persons who are visitors to Western Australia: ConAgra at 237.

87 The actual number is likely to be considerably higher than 22,000 for a number of reasons. As Hill J noted in Emap Elan Ltd v Pacific Publications Ltd (supra) at 3 and 6, it is "commonly accepted experience" that the readership of a magazine is well in excess of the number of sales. I expect this phenomenon would be more marked in relation to a quarterly magazine such as Scoop.

88 Further, the plaintiff's promotional activities must have resulted in significant numbers of people becoming aware of Scoop in Western Australia. And a proportion of the total numbers distributed will have been seen by other than regular purchasers or readers.

89 I therefore conclude that the plaintiff has established a reputation for its Scoop magazine in Western Australia sufficient to ground an action for passing off.

Reputation outside Western Australia

90 The plaintiff seeks to prove that Scoop has a reputation outside Western Australia as a matter of inference from the evidence to which I have referred above.

91 The plaintiff relies principally on exposure to the following people:

(1) at least one million passengers who travelled on Airlink aircraft, from February 1998 to February 1999;

(2) interstate visitors staying in 3, 4 and 5 star hotels in Western Australia;

(3) interstate visitors to the Western Australian Tourist Commission;

(4) interstate members of the Scoop Privilege Club;

(5) users of the Scoop website.

The only direct evidence is that relating to category (4) above: the 27 members of the Club who reside or are located outside Western Australia. However, even allowing for the fact that the number of readers is likely to be greater than the number of subscriptions, the total is likely to be small.

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92 It was submitted by counsel for the defendant that such evidence as there was, relating to the other categories, was vague, speculative and open to competing inferences. That is true, to a certain extent. For example, it is highly probable that categories (1), (2) and (3) above will include:

• overseas visitors

• business people who make regular visits to Western Australia

• mine-site and oil-rig workers travelling on the Airlink service to the north-western towns.

Furthermore, there is no evidence about the numbers of persons exposed to Scoop who have actually read it.

93 There is no evidence about the extent to which interstate users have visited the Scoop website. However, I cannot ignore the fact that by creating a web site, the plaintiff has, in effect, made Scoop available to each of the ever increasing number of internet subscribers in Australia. It is reasonable to infer that a number of such persons who are potential visitors to Western Australia have visited the web site in advance.

94 The defendant adduced evidence about the Roy Morgan readership survey. This is a service which is designed to inform publishers about the readership of various magazines, including inflight magazines in the same broad category as Scoop.

95 It was submitted by counsel for the defendant that in the absence of evidence of the kind relating to Scoop, no inference should be drawn from the evidence about the placement of Scoop in Airlink aircraft: and further, that such evidence is speculative.

96 This was said to be an example of the operation in Jones v Dunkel (1958) 101 CLR 298. I do not think it is. The rule applies to an unexplained failure to call evidence. Here the failure is explained by the fact that the plaintiff does not subscribe to the Roy Morgan service.

97 If the plaintiff is to prove reputation outside Western Australia, it must rely heavily on the drawing of inferences. That was the position in ConAgra, in which Lockhart J (at 238-9) referred to the fact that the trial Judge had heard evidence about statistics showing the movement of people and the frequency of airline traffic between Australia and the United States of America:

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"His Honour was asked to infer that there was a substantial number of people who travelled between Australia and the United States and that those persons would have been exposed to advertising in the United States of the appellant's … product and would have seen the product itself on shelves in that country."

98 Lockhart J then referred to the difficulty inherent in using evidence of that kind in proving reputation. After reviewing the evidence he concluded that:

"…the statistics of travel of persons between the two countries is a rather flimsy twig on which to support evidence of reputation of a truly worthwhile kind."

99 While I see the force of this observation, the evidence in the present case goes further than statistics of interstate travel. I have regard to the facts that:

1. there are 5,000 3, 4 and 5 star hotel rooms in Western Australia; and

2. some 15,000 interstate residents (not counting aircrew) are expected to stay in the 368 rooms at the Hyatt Hotel during 1999.

100 If the Hyatt is representative of the general hotel population, it is possible to assess the total number of interstate residents who are likely to visit Western Australia in 1999 and be exposed to Scoop. The figure would be -

15,000
_____ x 5000:

368

some 204,000 people, or 140,000 by the date of the trial.

101 In fact, the figure is likely to be considerably greater than 204,000, because I doubt that aircrew would occupy hotel rooms throughout the State to the same extent as they do at the Hyatt Hotel. Furthermore, I am concerned with a two year period: not a period of eight months.

102 Again, there is the question whether interstate visitors staying in Western Australian hotel rooms would read Scoop. In my view, there is a high probability that they would, because it may be supposed that, as visitors, they would be sufficiently interested about the lifestyle of Western Australia and forthcoming events to browse through a magazine

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devoted to those subjects. That probability is no doubt reflected in the substantial advertising revenue which the plaintiff derives from Scoop.

103 I appreciate that it is impossible, on the evidence, to put a figure on the numbers of people resident outside Western Australia who are aware of Scoop. However, it is not necessary to be precise: I am concerned with orders of magnitude.

104 I note that in The Cricketer case (supra) the foreign plaintiff was held to have established a reputation in Victoria, sufficient to ground an application for an interlocutory injunction to restrain passing off, by proving that only 123 or 127 copies of its magazine were distributed by retailers each month in that State. An undisclosed number of copies were dispatched direct to subscribers in Victoria. However, only 400 copies were distributed in this way throughout Australia. The magazine had been distributed in Australia "for many years". The numbers were therefore very small, albeit the market was no doubt smaller than the interstate tourism market of 1999.

105 In the present case I am satisfied that the numbers are considerably greater. In terms of orders of magnitude, I draw the inference, on the balance of probabilities, that a substantial number of people outside Western Australia, in at least the high tens of thousands, are aware of Scoop magazine.

106 The evidence does not enable any finding to be made about the distribution of persons outside Western Australia who are aware of Scoop. The defendant contends that relief should not be granted which prevents it distributing The Scoop in New South Wales or Tasmania, for example, unless the plaintiff has established a reputation in each of those States. However, the question whether, as a matter of law, it is necessary for such a finding to be made has not been addressed in this case. I therefore approach it with some caution.

107 As I have noted above, if the plaintiff was a foreign entity, it appears, on the authority of ConAgra, for example, that it would need only to establish a reputation in some part of Australia in order to prevent a competitor from engaging in the proscribed conduct anywhere in Australia.

108 The question whether a reputation established in one part of Australia is sufficient to justify relief in another part was raised before the High Court in B M Auto Sales Pty Ltd v Budget Rent A Car System Pty

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Ltd (1977) 51 ALJR 254. However Gibbs J (with whom Barwick CJ and Murphy J agreed) said (at 259):

"It is unnecessary to … consider whether any distinction should be drawn between cases in which the plaintiff's business reputation has been acquired in a foreign country and those in which the reputation has been acquired in a part of Australia other than that in which the proceedings are brought."

109 The High Court took that view because it held that the trial Judge had been entitled to find that the plaintiff, which sought an injunction to restrain passing off in the Northern Territory, had established a reputation there. The plaintiff did not have to rely on its reputation elsewhere in Australia.

110 The case was decided over 22 years ago, at a time when interstate travel and communications were not nearly as advanced or extensive as they are today. I note that in ConAgra (supra) at 233, Lockhart J said:

"It is no longer valid, if it ever was, to speak of a business having goodwill or reputation only where the business is carried on."

I accept that this was said against a different factual background, in which a foreign plaintiff complained about the activities, in Australia, of an Australian corporation. However, I would respectfully adopt the statement as being of general application, because it is based on an appreciation of the extensive nature of present day travel and communication. Those considerations are particularly relevant to a business, such as Scoop magazine, which is an adjunct to the interstate tourism industry. I cannot ignore the notorious fact that tourists visit Western Australia from all parts of the country. This fact, together with the evidence referred to above, raises a compelling inference that Scoop is known to a substantial number of people in all the other States and Territories who have become aware of it through their travels and may be regarded as purchasers, potential purchasers or consumers.

111 These considerations lead me to the conclusion that I should adopt a national, rather than a parochial approach, and not regard it as essential for the plaintiff to prove a separate reputation in every State or major population centre, in order to qualify for relief.

112 The passage of the Service and Execution of Process Act 1992 (Cth) as an extension of State jurisdiction, and the fact that misleading and

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deceptive conduct is proscribed by a federal legislation, I think, supports that view.

113 I therefore find that the plaintiff has established both in Western Australia, and elsewhere in Australia, a reputation for its Scoop magazine which is sufficient to ground an action for passing off.

114 I therefore turn to the next substantive issue.

Does the Defendant's conduct constitute a misrepresentation?

115 The misrepresentation complained of is that some association exists between Scoop and The Scoop. It is said that belief in the existence of that association is, or is likely to be, injurious to the plaintiff.

116 It is important to note, at the outset, that there is no question of fraud here. That is, the defendant did not choose the name "The Scoop" in order to take advantage of the plaintiff's reputation. I have already referred to the fact that the defendant chose the name "The Scoop" in ignorance of the existence of the plaintiff's magazine.

117 Where there is fraud, the court will readily infer that the defendant's name constitutes a misrepresentation which is likely to cause damage. The court assumes it to be a reasonable probability that a fraudulent attempt to injure or appropriate a reputation will succeed. But in the absence of fraud, the question is whether persons in the relevant class are likely to be misled into believing that an association exists between the two products.

118 The test is objective. Although evidence on the point is admissible, the court must decide the question for itself. In so doing the court must have regard to the characteristics of all those who fall within the class:

"including the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of all ages pursuing a variety of vocations…."

Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177, 202 - 203, per Deane and Fitzgerald JJ. Although that was said in the context of an allegation of misleading and deceptive conduct, it is equally applicable to passing off.

119 I have referred above to the principal features of Scoop and The Scoop. They are so different in their respective styles and contents that it
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can hardly be imagined that even the most gullible, unintelligent and poorly educated person who wished to purchase Scoop would purchase The Scoop by mistake. Leading counsel for the plaintiff suggested that an order for Scoop placed by telephone might result in The Scoop being delivered. I discount this possibility. The evidence is that both magazines are sold predominantly by customer selection at newsagents: and also at service stations in the case of The Scoop.

120 But the fact that a potential purchaser would not buy one product thinking it to be the other does not dispose of the matter. There remains the possibility that a relationship exists between the two producers.

121 It is here that the distinctive name issue becomes relevant. This was the subject of considerable argument, it being submitted by counsel for the defendant that the plaintiff could not establish reputation unless it proved that the name "Scoop", which he submitted was a descriptive word, had acquired a secondary meaning. That submission flows from the statement by Stephen J in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1977-78) 140 CLR 216, 229 that:

"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."

For that reason the law is reluctant to allow a person who trades under a purely descriptive name to have a monopoly in the use of that name.

122 I prefer the submission of leading counsel for the plaintiff, to the effect that the issue is not whether the word "Scoop" is a descriptive name or a distinctive name. The real issue is whether the word has become distinctive of the plaintiff's business; and whether the defendant's use of "The Scoop" is misleading in any relevant sense. That, I note, was the test adopted by Toohey J in Motorcharge Pty Ltd v Motorcard Pty Ltd (1982) ATPR 40-302, at 43,729.

123 As Hill J put it, in Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994, at 50,956:

"Just as the distinction between descriptive and fancy names is not a distinction of law so too it is wrong to see the distinction in black and white terms. The reality is that there is a

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continuum with at the extremes purely descriptive names at the one end, completely invented names at the other and in between names that contain ordinary English words that are in some way or other at least partly descriptive. The further along the continuum towards the fancy name one goes, the easier it will be for a plaintiff to establish that the words used are descriptive of the plaintiff's business. 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."

124 It is the defendant's case that the word "scoop" is a descriptive term, having a variety of meanings: and that it is used by the plaintiff in the sense of:

"…an item of news etc published or broadcast in advance or to the exclusion of rival newspapers…."

In the course of argument, that submission was advanced in a number of ways, to the same effect. I have no hesitation in rejecting it. I accept the submission of leading counsel for the plaintiff that if persons unfamiliar with the plaintiff's magazine were to be asked what they would expect to find in a magazine called "Scoop", it is highly unlikely that the answer would be "articles about lifestyle in Western Australia". It must follow, I think, that persons who are aware of Scoop, associate that name with the plaintiff, even though they may be unaware of the plaintiff's identity. That being so, and viewing the matter objectively, I consider that the word "Scoop" has become distinctive of the plaintiff's magazine, and that the use by the defendant of the title "The Scoop" amounts to a misrepresentation that the defendant is or may be associated in some way with the plaintiff.

125 I should emphasise, for the avoidance of doubt, that in my view the defendant's conduct is likely to cause more than confusion, which would probably not be actionable. The fine distinction between conduct which causes confusion on the one hand, and conduct which constitutes a misrepresentation on the other, was considered by Lockhart J in Bridge Stockbrokers Ltd v Bridge (1984) 5 IPR 81, 93. That was in the context of misleading and deceptive conduct: but his Honour's observations are equally applicable here:
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"If the conduct of the corporation causes mere confusion or uncertainty in the minds of the public in the sense that they may be caused to wonder whether two products may have come from the same source, the corporation does not contravene s 52(1): … But in some cases the conduct of the corporation may not only cause members of the public initially to wonder whether two products may have come from the same source; they may conclude that they do. This may constitute misleading or deceptive conduct for the purposes of s 52."

126 In my view, the defendant's conduct constitutes a misrepresentation because purchasers or potential purchasers of Scoop, who are aware of the existence of The Scoop may conclude that the two have come from the same source. As Smithers and Woodward JJ said in the same case, (at 88) such purchasers have "no duty or inclination to exercise a fine discrimination in the matter, nor feeling of necessity for so doing." The defendant's conduct "creates a likelihood of it being understood as saying what it seems to say".

127 I have reached this conclusion without reference to any of the plaintiff's evidence. Indeed, there is no evidence from any purchaser or potential purchaser of Scoop who has become aware of the existence of The Scoop. The evidence relied on by the plaintiff was that of witnesses who had some connection with its magazine.

128 Mr James Brendan Uren is a sales manager who, in May 1999, was engaged by the plaintiff to train its sale staff.

129 On about 19 July, Mr Uren heard an advertisement for The Scoop broadcast from a Perth radio station. This was one of the advertisements which for a few days until 23 July 1999, the defendant caused to be broadcast in Western Australia. It withdrew the advertisements on being required by the Office of Film and Literature Classifications to recall the magazine. Despite the subsequent clearance the defendant has not recommenced radio advertising in this State.

130 A tape recording of three of the radio advertisements was tendered in evidence. Each was of about 30 seconds duration. The first two featured a young man speaking in a broad Australian accent and apparently commenting on the contents of The Scoop magazine while leafing through it. The impression given by the advertisement was that while setting out to refer to articles, the speaker's attention was diverted by the photographs of the young women, in respect of which, the speaker made

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lascivious comments and noises. He made repeated references to "tips", in a way and in a context in which the listener might well think he was referring to breasts. Another male voice then referred to "Scoop magazine", omitting "The".

131 The third advertisement was directed to a competition in which the prize was to be a Ford Falcon utility. Again, the speaker was a young male Australian. There was repeated play on the word "falcon". For example, "a falcon great new magazine"; "a falcon great competition"; and "a falcon Ford ute". The word "falcon" was used thus to create an impression that the speaker was using vulgar language. Again, the magazine was referred to simply as "Scoop" later in the advertisement.

132 All the advertisements referred to The Scoop, or Scoop, as a weekly magazine priced at $1.95. The plaintiff's magazine is published quarterly at a price of $6.95.

133 Mr Uren deposed to the fact that when he heard the advertisement he was "horrified": he thought it was promoting the plaintiff's Scoop magazine:

"…and that it had devised an advertisement that completely missed its target market and which would instantly isolate its readership."

134 Mr Uren heard the same advertisement and a different one (which I infer was the third of those referred to above) some seven or eight times during the next few days. Until he was able to speak to Mr Hogan, he remained of the view expressed above. He asked Mr Hogan why he was "doing such trash advertising".

135 Counsel for the defendant submitted that it was "odd" that Mr Uren did not appreciate that the advertisement was directed to a product other than the plaintiff's: and that its weight should be diminished for that reason. I do not accept that submission. Mr Uren's evidence was not challenged and I have no reason to doubt it. The fact that Mr Uren apparently focussed on the word "Scoop", and did not notice the references to weekly publication and price is consistent with my view that the word has become distinctive of the plaintiff's magazine.

136 Mr Joel Alexander Steinberg is a marketing manager. He lives in Sydney, where on 2 August, he heard a radio advertisement publicising the launch of "Scoop magazine". In fact, it was an advertisement for The Scoop.

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137 Mr Steinberg knew about the Scoop magazine published by the plaintiff. He is acquainted with its sub-editor. On hearing the advertisement (which is not in evidence) Mr Steinberg telephoned the sub-editor and asked if she would be attending the launch of Scoop in Sydney. He thought they were the same magazines. His evidence was not challenged, and I accept it. It provides further support for the view that the plaintiff's name is distinctive.

138 Ms Kylie Elizabeth Morrison is a promotions manager. In July 1999, she was thinking about advertising her winery business in the plaintiff's Scoop magazine. On about 20 July she heard a radio advertisement for "Scoop magazine". In her affidavit sworn on 4 August, Ms Morrison says she could not remember the details of the advertisement. She recalled forming the impression that it was "crass". She thought the plaintiff's Scoop magazine was "being advertised in a distasteful manner".

139 However, on paying close attention to the advertisement she heard the reference to a weekly publication. Ms Morrison realised that "it was probably an advertisement for a different magazine, using the same name". She apparently thought it desirable to confirm this by speaking to one of the plaintiff's employees.

140 Ms Annette Maree Pilkington has been employed for 10 years by Retail Delivery Service at Belmont. That organisation distributes approximately 1000 publications, including magazines, throughout Australia. Ms Pilkington is familiar with Scoop magazine: but not The Scoop.

141 Ms Pilkington's duties require her to speak on the telephone to newsagents to whom her employer distributes magazines.

142 Early in the week of Monday 19 July, Ms Pilkington received not less than six telephone calls from newsagents to whom the plaintiff's Scoop is supplied.

143 The subject of the telephone calls was The Scoop magazine. Ms Pilkington informed the newsagents to whom she spoke that as far as she knew, "Scoop" was not publishing any other magazine of the same name, that there had been no change in its price, and that there was no relationship between Scoop and any other publication of the same name.

144 Ms Pilkington's evidence was not challenged, and I accept it.

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145 The telephone calls were received by Ms Pilkington at about the time the defendant was advertising The Scoop on Perth radio. I draw the inference that the newsagents to whom Ms Pilkington spoke had become aware of The Scoop, either on hearing the radio advertisements or on receiving the defendant's advance publicity material, and were at least uncertain whether any connection existed between it and Scoop.

146 Again, that evidence supports the conclusion I have reached. Newsagents may be taken to have a greater knowledge of these matters than their customers. If newsagents wonder whether a connection exists between Scoop and The Scoop, it is likely that some of their customers will conclude that there is a connection.

Is the misrepresentation likely to be injurious to the plaintiff?

147 Of course, there can be no misrepresentation unless purchasers or potential purchasers of Scoop are aware of the existence of The Scoop: the misrepresentation must be operative, or potentially so. Here, Scoop and The Scoop are such different products, appealing to such different sections of the community, that if The Scoop was simply displayed for sale on newsagents' shelves, purchasers or potential purchasers of Scoop might not become aware of its existence. That is because, as I infer from the evidence, magazines of a type similar to The Scoop are usually displayed in a different section of the shelves from those such as Scoop.

148 However, the plaintiff has no control over the way in which the defendant might promote or advertise its magazine. This case provides an illustration of that potential problem for the plaintiff, arising from the radio advertisements.

149 I accept the submission of counsel for the defendant that statements made in a radio advertisement must be considered in the context of the advertisement as a whole: Pfizer Pty Ltd v Jansen Pilay Pty Ltd (1992) CLS Fed 108, per Lockhart J. Taking them as a whole, I think it unlikely that a listener who was familiar with Scoop would believe the advertisements related to that magazine. However, some listeners in that category might well believe that there was an association between the two magazines, simply because they use the same distinctive name. That was Mr Uren's reaction: he thought the plaintiff was engaging in "trash advertising".

150 Among those listeners, I would expect there to be a range of reactions to the defendant's advertisements: some would regard them as

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humorous, others as offensive. Persons of discerning tastes, such as might be purchasers or potential purchasers of Scoop are perhaps more likely to fall within the latter category. I refer again to the evidence of Ms Morrison. She deposed to the fact that had she remained of the view that there was an association between the radio advertisement and the plaintiff's magazine, she would not have given any further consideration to advertising in it, "simply by reason of the distasteful and base nature of the radio advertisement which I had heard".

151 Again this evidence was not challenged: and I accept it. It provides support for the view that the plaintiff is at risk of its reputation being diminished by a perceived association with the defendant's magazine.

152 I note that a similar view was expressed in Totalizator Agency Board v Turf News Pty Ltd (1967) VR 605, in which the plaintiff, a statutory corporation, complained about the activities of the defendant in publishing a "punter's guide" under the name "TAB". Smith J said (at 607):

"In my view, to be thought to be the publisher of a "punter's guide" of this kind would substantially lower the plaintiff's present standing in the minds of sensible persons and would probably have an appreciable injurious effect on its business".

153 There the fields of activity of the plaintiff and defendant were similar. However, to use the words of Learned Hand J, which I have quoted above, I do not think that in the present case the defendant's use of the word Scoop is so foreign to the plaintiff's, "as to insure against any identification of the two". While accepting that the magazines are quite different, the fact each bears substantially the same name in a common field of activity does, I think, enhance the risk of identification, in the sense of common proprietorship or association.

154 The defendant relies on the evidence of Mr Michael Foote, the Managing Director of Runic International Pty Ltd, which is the sole agent and distributor in Australia of the Mont Blanc range of luxury products. Mr Foote has been involved in the marketing industry for 30 years.

155 Mr Foote deposes to the fact that Mont Blanc products: "are targeted at the top 5-10 per cent of what is known as the A & B Demographic group. 'A & B' is a socio-economic grouping used by marketing companies within Australia".

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156 For that reason, Runic advertises the Mont Blanc range in such publications as the Australian Financial Review, the Australian Financial Review Magazine, and various lifestyle magazines such as Gourmet Traveller, Vogue and Marie Claire. Runic has advertised the Mont Blanc range in Scoop, because Mr Foote considers that it falls within the class of publications referred to above.

157 Mr Foote says that he became aware of The Scoop when he was sent an introductory copy by an acquaintance who is employed by the defendant. He expresses the view, which reflects my own, that Scoop and The Scoop are "totally different": and for that reason (my emphasis) he is not concerned that the existence of The Scoop would detract from "the benefits and attractiveness of advertising Mont Blanc products in the plaintiff's publication."

158 However, Mr Foote says also that he would not contemplate placing or approving the placement of an advertisement for those products in The Scoop.

159 That being so, I cannot exclude the possibility that if Mr Foote believed either there was some association between Scoop and The Scoop, or that consumers of Scoop might conclude there was some association, his view as to the continued utility of advertising in Scoop might be different.

In all the circumstances, I am satisfied that the defendant's conduct in publishing The Scoop magazine is a misrepresentation which is likely to be injurious to the plaintiff's reputation, because of a perception that the plaintiff is associated with the publication of a vulgar or pornographic magazine.

160 It is not necessary for the plaintiff to prove actual damage. The law protects the plaintiff's reputation from likely damage resulting from the defendant's misrepresentations: ConAgra (supra) at 200 per Lockhart J.

Misleading and Deceptive Conduct

161 Although there is a conceptual difference between passing-off and misleading and deceptive conduct, under s 52 of the Trade Practices Act 1974, the difference is insignificant in the present case.

162 In Emap (supra), Hill J heard an application for an interlocutory injunction to restrain alleged passing-off and misleading and deceptive conduct. The applicant, which was the publisher in the United Kingdom

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of a magazine called "More!", complained about the publication in Australia of the respondent's magazine "More".

163 In dealing with the issue of misleading and deceptive conduct, Hill J said (at 7):

"In a case such as the present an applicant, to succeed in showing that conduct has been engaged in which is misleading or deceptive, or likely to mislead or deceive, must prove reputation, although it may well be that the extent of reputation to be proved could be less than that required to be shown in a passing off case."

164 His Honour then went on to refer to the test which he had proposed as the trial Judge in the ConAgra case, that a lower threshold test of "a not insignificant number" be adopted. On appeal, French J expressed general agreement with the test, while Lockhart and Gummow JJ found no need to consider that matter.

165 Neither does the question arise in the present case. For the reasons set out above. I consider that the reputation which the plaintiff has established is sufficient to ground a misleading and deceptive conduct claim.

166 I am therefore satisfied that the plaintiff has proved its case in relation to misleading and deceptive conduct. My observations in relation to misrepresentations in the context of passing off are equally applicable here.

The Remedy

167 It will be necessary to hear from counsel as to the appropriate form of order. I set out the following matters by way of guidance.

1. The defendant acted honestly and innocently in choosing the name The Scoop for its magazine, and in preparing for publication. The defendant was put on notice of the plaintiff's concerns only a few days before the first issue was offered for sale to the public. That being so, the following passage from the judgment of Gummow J in ConAgra, at 255, is particularly apt:

"A defendant originally may have adopted a mark honestly and innocently either in ignorance of the existence of the plaintiff's mark or in the belief that his mark was so different from that of

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the plaintiff as not to be calculated to mislead purchasers. But the authorities establish that in such a case, the continuing use of the mark after awareness that its use does cause the goods of the defendants to be mistaken for those of the plaintiff, is no less fraudulent in the eye of the court than user with an original fraudulent intent. In Mitchell v Henry (1880) 15 Ch D 181 at 191, James LJ said: 'The defendants must bear in mind that the original honesty of intention does not protect the continued user, if the user is found practically to have the result of deceiving, or is calculated to deceive purchasers, because it is very easy for manufacturers to avoid any possibility of misleading purchasers if they are minded to avoid it.'

The principle was expressed as follows by Lord du Parcq in Marengo v Daily Sketch and Sunday Graphic Ltd (1948) 65 RPC 242 at 253-4: 'The honest man who finds that, through mere ignorance or inadvertence, he has done innocently that which, if done with wrongful intent, would have given a right of action for damages, will be anxious, when the facts are made clear to him, to take such steps as will prevent any misunderstanding in the future. If the Court of Equity is convinced that there has been such an innocent misrepresentation, and an honest defendant, not being himself so convinced, has refused to take proper steps of his own motion, the Court, acting upon the defendant's conscience, will compel him by injunction to act as an honest man ought to act when he has learned all the facts and has considered them impartially.' See also Ronson Products Ltd v James Ronson Pty Ltd (No 2) [1957] VR 731 at 738".

2. In the light of my view that it was the defendant's radio advertising which precipitated the action, I have considered whether the restraint of such advertising would afford sufficient protection to the plaintiff. I have come to the conclusion that it would not: both from a practical point of view, and in principle.

In practice, there would be nothing to stop the defendant from advertising in some other way. And I would not regard the inclusion of some disclaimer of association to be adequate because of the risk that it would go unnoticed, or unheard, in the case of a radio advertisement. In principle, a person who has established a reputation by the use of a distinctive name is entitled to restrain

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others from using it. He has a right of property which he is entitled to protect.

3. I do not think it sufficient for the defendant to change the name of its magazine to "The Weekly Scoop". This would not, in my view, eliminate the perception of association. Consumers might think that the "Scoop" organisation was publishing a down-market weekly magazine in addition to its up-market quarterly.

4. I therefore consider that unless the defendant is prepared to undertake to the Court to withdraw The Scoop, or publish it under a quite different title, an injunction should be granted to prohibit publication in the current name, or any name which is deceptively similar.

5. Subject to hearing further submissions, I would be disposed to allow the defendant a reasonable time to effect the appropriate change in title, provided that it ceased its radio advertising in the interim.

6. I will hear from counsel in relation to the claims for damages and/or an account of profits.