Steeden Sports Pty Ltd v Allied Sporting Products Pty Ltd

[1992] FCA 323

3UDGMENT No. ..3z, ?..S

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY	) No. NG43 of 1992
1
GENERAL DIVISION	1

BETWEEN :

STEEDEN SPORTS PTY. LIMITED

ADDlicant

m:

FEDERAL COURT OF

AUSTRALIA	ALLIED SPORTING PRODUCTS PTY. LIMITED
PRINCIPAL

REGISTRY Res~ondent

CORAM: SHEPPARD J.

: 7 FEBRUARY 1992

REASONS FOR JUDGMENT

HIS HONOUR: This is an application for interlocutory relief to restrain the marketing by the respondent of certain footballs. The footballs are for use in a code of football known as Rugby League which is predominantly played in the states of New South Wales and Queensland. There are also international games and interstate games, most of those being between the two states that I have mentioned.

year 52 per cent of its product was sold in New South Wales,	is its managing director, said that in the current financial
38 per cent in Queensland and the remainder in the other States. Mr Warner said that except for 1973 the applicant has been the exclusive supplier of international model footballs to the New South Wales Rugby League since 1970. He said that these are the footballs used by the League in competition games, including State of Origin games and international games.
The applicant has recently entered into an agreement with the Rugby League to be the official supplier of Rugby League footballs to the New South Wales Rugby League for all official - games in 1992. The applicant pays a sum of money, which was disclosed to the court confidentially, each year to secure these rights. Mr Warner said that Rugby League footballs have, by tradition, been yellow in colour. The applicant has always supplied a yellow ball to the League and fox sale to the public.
During the last five or six years night games have been conducted by the League. This has resulted in the applicant designing a white ball with red markings for use in night
but in 1991, at the request of the League, after consultation games. Formerly, Rugby League footballs were made of leather
between it and the Rugby League Players Association, the applicant supplied the League with a football made of a synthetic weatherproof material which, according to M r Warner, had an identical get-up to the traditional yellow leather football. After many trials and tests a form of synthetic was
stepoj 7.2.92 2
identified and was approved by the League.
~r Carmody is the managing director of the respondent. He said that the business of the respondent is solely concerned with the importation, manufacture, marketing, distribution and selling of sporting equipment of various kinds in Australia. He said that the respondent had been, since 1985 when he left the applicant's employ, a business competitor of the applicant. Mr Carmody said that the respondent sells a wide range of sporting equipment in Australia. He listed the nature of this equipment and said - that the vast majority of the equipment referred to was sold under the name "Madison". He said that the name "Madison" had been utilised by the respondent in the sale of its products since 1985 and had, since that time, been impressed on sporting goods in the same type face with the same print and style as that which appears on the respondent's footballs which are the subject of this application.
The respondent markets its goods in each of the Australian states. Mr Carmody said that although the
a limited market for the footballs which are the subject of respondent sells sporting products throughout Australia it has
this application. Principally these are sold in Queensland. The respondent does not market, and will not seek to market, the footballs in Victoria, South Australia or Tasmania. It has an agent in Western Australia to whom it intends to sell or offer for sale its footballs. The balls are not widely
stepoj 7.2.92 3
marketed in New South Wales. Indeed, as I understand the evidence, they have only been sold to one sports store in Sydney. But it is clear from the evidence which has been given that Mr Carmody would market the balls more widely in New South Wales if there were an available market.
It is necessary to refer in a little detail to the get-up of the two balls which are in question. Before I do that I should say that there are in evidence five other balls made by different manufacturers and marketed by other organisations each of which has a distinctive get-up and certainly a get-up distinctive from the get-up of the applicant's ball.
The applicant markets its ball under the name "Steeden" which is prominently printed on its ball. The ball is predominantly yellow in colour with white points. On each side it has a red diamond which covers a substantial area of each side of the football. Across the red diamond is printed the name, "Steeden", in large letters. These are edged in yellow. The name is printed in black. There is other black writing on the ball. In smaller print above the name,
Stretchless", and on the other, "Top Quality Super Grip". "Steeden", are the words on one side, "Guaranteed
Under the name, "Steeden", appears in less prominent, but still reasonably prominent, print the word, "International", which is printed in letters which are edged black and otherwise bear the yellow background which is the colour of the ball.
stepoj 7.2.92 4
What I may describe as the underneath of the ball has on one side a simplified map of Australia in which there is a replica of the coat of arms. The words "Australian Rugby League" are written there. Under them in reasonably prominent print are the words, "Official Ball of the NSW Rugby League". On the other side there is the New South Wales Rugby League Badge and again the statement that it is the official ball of the NSW Rugby League.
The respondent's ball is also predominantly yellow in colour and has white points of about the same size as the white points on the applicant's ball. It too has a red diamond on two sides; the diamond is approximately the same size as the applicant's diamond but it differs from it because towards the outer edge it is edged in yellow and then there is a red border. Instead of the name, "Steeden", prominently written across the diamond there is the name, "Madison", a name which consists, as does the name, "Steeden", of seven letters. The print of the name, "Madison", varies from that of the name, "Steeden", the letters of the word, "Madison", being larger at the two extremities than they are in the
the same way as the word, "Madison", is printed on the centre. As I understand it, the word, "Madison", printed in
footballs, has appeared on a number of other products manufactured or distributed by the respondent.
As in the case of the applicant's ball, the word, "International", appears beneath the diamond; it is written
stepoj 7.2.92 5

The applicant has been marketing footballs, particularly
Rugby League footballs, for very many years. Mr Warner, who

in approximately the same sized print as the print used on the applicant's ball but the print is simply black type; it is not type which consists of a yellow colour surrounded in black. There is nothing on what I have called the underneath of the ball. In small print at the top on one side is the word, "Ultra-grip", and on the other side the words, "Water Proof".

It should be understood that for footballs to be used in Rugby League competition they have to meet certain standards. I shall say a little more later on about whether the respondent's ball does meet those standards but, subject to that, they must be of the shape which they are and they must be coloured predominantly yellow. Some of the balls distributed by other companies to which I referred earlier, are all yellow, in some cases subject to there being more black markings on them than there are on these balls. One therefore has to be careful in reaching a conclusion in this case to take into account the fact that the balls must be of the shape which they are and must be predominantly yellow. It would be easy to let those matters cloud one's judgment when endeavouring to determine whether there is a risk of potential	purchasers and others being misled into thinking that the two
balls come from the same source.
The causes of action upon which the applicant relies are causes of action based on a number of provisions of the Trade Practices Act 1974. The principal of these is, of course, s.52, the provisions of which are well known. It also relies
stepoj 7.2.92 6

on paragraphs (a), (c) and (d) of s.53. Paragraph (a)

"A corporation shall not, in trade or commerce, in

connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services -

(a)	falsely represent that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous
use; "

I do not regard para. (d) as particularly relevant to the circumstances of the present case. Paragraph (c) provides:-

"A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services -

(c) sponsorship, approval, performance

represent that goods or services have benefits they do not have;"

The applicant also sues in passing-off.

I think I should put para. 53(a) out of the way at this stage. I do not for a moment say that the applicant may not have a case based on that provision. The case it seeks to make is based on differences between the two balls in relation to their size and their quality. There is evidence which, prima facie, establishes that the central circumferences of the respondent's ball are not identical with those of the

stepoj 7.2.92

7

applicant's ball. More importantly, if that evidence were accepted, it would tend to establish that the respondent's ball is not a ball which could be used in an official Rugby League competition because it does not meet the specification which the League has laid down in that respect.

There is also evidence that the thickness of the walls of the casings of the balls differ and that the thickness of the casing of the respondent's ball is noticeably thinner than that of the applicant's ball. Finally, there is evidence that the gripping power of the applicant's ball is substantially - greater than that of the respondent's ball. There is evidence about the coefficients of friction of the two. If this were accepted it would tend to establish that the respondent's ball, particularly in wet weather, would not be as well gripped as would the applicant's ball.

I have decided not to deal with this aspect of the case in this interlocutory hearing because I do not think it is necessary to do so and I think that it may be necessary before one could understand fully the ramifications of what is

evidence than there is presently available.	involved in the applicant's evidence to have more technical
I should mention evidence given by M r Foster who is the marketing manager of the New South Wales Rugby League. Amongst other things he said that the ball which has been used for all professional competition games, State of Origin games
stepoj 7.2.92 8
and international games organised by the Rugby League up to and including the 1991 season is so distinctive that it has been an integral part of the game and has been instantly recognised by officials, players and Rugby League supporters as the official Rugby League football and one to be trusted and relied upon. He went on to say:-

"Notwithstanding the decision taken yesterday by the NSWRL to use the night ball designed by the Applicant for use as the ball for its ,Winfield Cup' games for 1992 on a trial basis, the NSWRL will continue to use the traditional yellow ball bearing the Applicant's distinctive 'get-up' for all other purposes, including other competitions conducted by the NSWRL under its - auspices (such as the metropolitan competition) and for its coaching and development programs for 1992."

M r Foster said the League did not want the identity of

its traditional yellow ball to be lost. What appears to emerge from that evidence, although somewhat indirectly, is that the applicant's ball as presently got up will not be used in the major League competitions this coming season. The ball to be used will not be coloured predominantly yellow but will be white no doubt with printing and logos on it. One of the

matters I need to consider in this application is whether that	should make any difference to what otherwise ought to be done.
The applicant in this case places substantial reliance on its name being known to the Rugby League community. Amongst the evidence are a number of Rugby League publications; there are some television videos and there is oral evidence itself which tends to establish, at least on a prima facie basis,
stepoj 7.2.92 9

that members familiar with the sport of Rugby League are well aware that the official Rugby League,. or at least New South Wales Rugby League ball, is the applicant's or the Steeden ball. If one looks at photographs and advertisements in the various publications that I have seen and also at promotional and advertising material put out by the League and by the applicant one can see from time to time quite clearly the name, "Steeden", on balls which are gripped by players or which are in flight.

There is, of course, no consumer or trade evidence in this case. Perhaps that evidence, notwithstanding certain difficulties about it, will be called at the hearing.

It is not easy for me to gauge the extent to which the name "Steeden" is known to members of the Rugby League community. One thing I should bear in mind in relation to that is that the applicant is the official supplier to the League of footballs so that, at least for the time being, no ball manufactured by the respondent could be used in any of the major competitions conducted by the New South Wales

League. The position is different in Queensland because the	League there has recently approved a different ball (not a
"Madison" ball) for its competition and that may be why the respondent sees more likelihood of demand for its product in Queensland than is the case in New South Wales even though, as I say, it is not the official supplier to the Queensland Rugby League.
stepoj 7.2.92

it has to be understood that the market which the respondent might obtain as a result of its marketing could not include sales to the N.S.W. Rugby League or to any bodies or associations or sporting groups which were in any way connected with any of the Official Rugby League competitions organised by it. That market cannot, at least for the time being, be affected. Nevertheless, although there is no direct evidence of it, I would infer that there is a substantial market for footballs which involves the sale of them to people privately, perhaps to children, perhaps to young people who play in unofficial competitions organised for example by church groups or school groups or groups of that kind and who may, for various reasons, like to play with the ball they believe to be the official Rugby League competition ball. The fact that there are at least five other footballs on the market indicates that there is a market for balls other than

~hus

the "Steeden" ball.

How extensive that market is I am unable to say but I
have little doubt that it exists. I should take into account,

of course, in relation to it that the people who will buy

of the community. They will include, as I say, children and	footballs from sporting stores will be across the broad range
young people and they will include people of various grades of intelligence and various grades of knowledge of the Rugby League game. I need also to bear in mind that I am dealing with provisions which exist for the protection of consumers in the community and that the case is not one, at least so far as
stepoj 7.2.92 11
concerns the Trade Practices Act, of an action inter partes. The interests that are involved transcend the particular interests of the two parties to the litigation.
~t is, of course, axiomatic that the way I should approach this case is to determine, firstly, whether or not there is a serious question to be tried, in other words whether there is a prima facie case, and if I am satisfied that there is then to go to the balance of convenience. It is true also that those two matters ought not to be considered in isolation. They tend to overlap. One may have a case where one feels that the prima facie case is weak but the overwhelming balance of convenience is in favour of granting relief and one may have a case which is the reverse of that or between those two extremes. In the end it is a matter for the discretion of the court to determine what should be done.
Not without some difficulty I have reached the conclusion that there is a serious question to be tried in relation to s.52, para. 53(c) and passing off. I, of course, as one usually has, have had the advantage of having the products
before me for some 24 hours or so. I have had them together so that I can compare them and I can look at them and think
about them and then come back to them. I have to bear in mind
that that is not how people intending to buy footballs will ,
see them. They may see them together in a sports store or they may not; one may be there and the other not. One cannot lay down any general rule and people will see them, not
stepoj 7.2.92 12
as I have seen them, but fleetingly. They will not have the advantage that I have had of looking at them closely.
To me the major matter upon which the respondent might rely in the case is the fact that .it's name, "Madison", is so prominently stamped across the red diamond and is so different from the name, "Steeden", which is stamped across the applicant's ball. That I think is the sticking point but one has to take into account the whole of the get up of the two balls. I have said that the balls must be predominantly yellow but they do not have to have white points. That is not something which is obligatory. Each of these balls has white points and each of the points is approximately the same size as the other.
Furthermore, although the two diamonds differ slightly because there is the yellow edging to which I have referred in the case of the respondent's ball, the fact is that the two diamonds are I think, within a millimetre, the same size. They are both red and red of an identical shade and they both have printed over them a seven letter word in black. It is
true that the black printing of "Madison" differs from that of "Steeden" because of the larger "M" and "N" in the Madison
name but when one looks at them and one sees the white points and tries to put aside that they have to be yellow, there is, in my opinion, a marked similarity between the two.

One adds to that the fact that the word, "International",

stepoj 7.2.92 13

in more or less the same size print appears underneath the diamond in each case although, as I have pointed out, the printing of the word differs slightly because one is yellow edged with black and the other is completely black. I of course am not deciding the matter finally. I have simply to decide whether or not there is here a prima facie case in the sense in which that is understood in the authorities. Having reflected about the matter since I adjourned yesterday afternoon, I have reached the conclusion, as I say, that there is here a prima facie case in relation to s.52 of the Trade Practices Act.

In my opinion the applicant has a case for saying that people seeing the respondent's, or the Madison ball, may be deceived or misled because of its get up. My conclusion in this regard would be the same in relation to the cause of action based on passing off. In relation to para. 53(c), the way the case was put to me was that people seeing the two balls together, because of the similarity of the get up, might be led to believe that the balls had come from the same source; if not the same company then a related company;

would be different. I think there is force in that case also	otherwise they would not be got up to look as they were, they
and I find it established but of course on a prima facie basis.
I do not think it useful, despite what was put to me by counsel for the applicant, to express a view on how strong I
stepoj 7.2.92 14
think that prima facie case is. I think that is because there is still to be obtained other evidence which will bear on that question. One of the matters counsel relied upon was evidence which he said suggested deliberate copying by the respondent. That of course is a matter that would be very relevant to take into account. He referred me to documents prepared by an advertising agent and an order form. He cross-examined Mr Carmody about the matter, Mr Carmody denied it but of course there is the similarity in the size of the diamonds and the points to which I have referred.

-

I do not think it wise very often in an application for interlocutory relief to reach a conclusion on an issue such as this and I have not done so, but that issue might loom much more largely in a final hearing and might, if it were resolved favourably to the applicant, tip the scales; one cannot say. All I will say in this case is that there is a prima facie case of the kind I have found and I do not comment upon its strength or weakness.

I turn to the balance of convenience. The matter that strikes me most about this is that the respondent is a recent
entrant to this market.	It has marketed the balls only, I

think, since towards the end of last year or in January. Its marketing has been principally in Queensland where I think it has sold less than 1000 balls. It has outstanding orders for more balls but these are less than 2000 and it has no orders placed for the manufacture of any further balls. I should say

stepoj 7 .2 .92 15

that the balls are manufactured in India. They can apparently be manufactured quite quickly according to Mr Carmody who said that he would expect delivery by air within 10 days of placing an order. The balls are purchased for about $3 or $4 each from the Indian manufacturer so that the amount of money presently involved, as far as the respondent is concerned, is not, in overall terms, substantial. It is true that a restraint may lose it sales which will involve a greater amount of money, bearing in mind that the sale price is about $20 per ball. But compared with the applicant's position, the respondent's position in the market is not substantial.

Another factor is that the respondent has an ongoing successful business in which it markets a whole range of other sporting products.

One would hope that this case could be heard within six months and there will of course be an appropriate undertaking as to damages which will be supported by security required of the applicant. I have taken into account the offer made by the respondent to keep accounts and to support that	undertaking by security. That is often a satisfactory	solution to problems such as this. But as was put to me by
counsel for the applicant, damages are not always an adequate remedy for infringements of this kind. One may find it very difficult to ascertain what loss of trade has been suffered as the result of the marketing of a product which infringes the rights of an applicant. I think also there is much to be said
stepoj 7.2.92 16
for the view in these cases, particularly when the respondent is a recent entrant to a market, in favour of preserving the status quo. That is largely what will be done by the grant of relief.
In reaching my conclusion I have of course taken into account the whole of the evidence which each of the parties has led and the submissions which their respective counsel have made. I have not covered the entirety of the evidence or the submissions; they ranged over a wide area. But to me, the matters I have mentioned are the salient matters to be taken into account and having performed that exercise I have reached the conclusion that I should grant the applicant the interlocutory relief which it seeks subject of course to it giving the undertaking as to damages to which I have referred.

i certHy that thls and the / 6 preceding,

pages are a true copy of the reasons for

Judgment herein of The Honourable

Mr Justlee Shoppard. a!d-@-Lk

!RstiBm.

Dateii 7 FE&XUM~/ /?95

stepoj 7.2.92