Stuart Alexander & Co (Interstate) Pty Ltd v Blenders Pty Ltd
[1981] FCA 169
•08 OCTOBER 1981
KONINKLIJKE TABAKSFABRIEK-KOFFIEBRANDERIJEN-THEEHANDEL N.V.
And: BLENDERS PTY. LIMITED (1981) 53 FLR 307
No. G117 of 1981
Trade Practices
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Lockhart J.(1)
Trade Practices - misleading or deceptive conduct - applicant and respondent distribute instant coffee in Australia - respondent introduces glass "apothecary" jars substantially the same as those already in use by the applicant - respondent initiates television advertising campaign - whether such advertisement represents that the respondent's instant coffee is not imported - whether such advertisement represents that the applicant's coffee is at least twice as expensive as other coffees, in particular the respondent's - whether either representation false, misleading or deceptive - whether the respondent's jars together with their labels are misleading or deceptive.
Trade Practices Act (Cth.) 1974 ss. 52, 53(e)
Trade Practices - Misleading or deceptive conduct - Applicants and respondent each distributors of instant coffee - Respondent introducing "apothecary" jars and labels similar to those used by applicants - Television advertisement representing applicants' coffee as more expensive than respondent's coffee - Television advertisement stating that applicants' coffee was imported so as to falsely imply that respondent's coffee was not - Whether respondent's packaging and television advertisement amounted to misleading or deceptive conduct - Trade Practices Act 1974 (Cth), ss. 52, 53(e).
The applicants and the respondent were distributors of different brands of instant coffee imported into Australia. The respondent commenced to market its coffee in "apothecary" jars, as the applicants had done for some time; it altered its labels to a colour scheme similar to that of the applicants' labels; and it commenced to broadcast a television advertisement which showed its coffee and the applicants' coffee and drew unfavourable comparisons between the two.
The applicants claimed that the respondent was, in trade or commerce, engaging in conduct which was misleading or deceptive or likely to mislead or deceive; and that the television advertisement made false or misleading statements concerning the price of the two brands of coffee; and they sought injunctions against the respondent.
Held: (1) In so far as the television advertisement conveyed the false impression that while the applicants' coffee was imported the respondent's was not, this amounted to false, misleading and deceptive conduct which would be restrained by injunction.
R. v. Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977), 137 CLR 545; Weitmann v. Katies Ltd. (1977), 29 FLR 336; Puxu Pty. Ltd. v. Parkdale Custom Built Furniture Pty. Ltd. (1980), 43 FLR 405, referred to.
(2) Viewed analytically the television advertisement appeared to suggest that the applicants' coffee was twice as expensive as the respondent's; but the general impression it gave was that the applicants' coffee was considerably more expensive than the respondent's, which was so; so that it was not false, misleading or deceptive.
(3) The respondent's use of an apothecary jar and a label with a colour scheme similar to that of the applicants' labels introduced basic similarities between the packaging of the applicants' and the respondent's products; but there were also distinct differences between the two, so that the respondent's conduct was not misleading, deceptive, nor likely to mislead or deceive.
(4) The fact that undiscriminating consumers might inadvertently mistake the respondent's product for that of the applicants prior to the point of sale was not sufficient to establish that the respondent's conduct was misleading or deceptive.
Cadbury Schweppes Pty. Ltd. v. Pub Squash Co. Pty. Ltd., (1981) WLR 193, referred to.
Sydney, 1981, September 25, 29-30; October 8. #DATE 8:10:1981
APPLICATION FOR INJUNCTION.
The facts appear from the judgment of Lockhart J.
J.D. Heydon, for the applicants.
P.G. Hely and J.A. Timbs, for the respondent.
Cur. adv. vult.
Solicitors for the applicants: Walter Dickson & Co.
Solicitors for the respondent: Laurence & Laurence.
R.R. BOADEN
1. The respondent by itself its servants and agents be restrained from televising or otherwise publicising an advertisement in the form of that exhibited as "WEB 17" to the affidavit of Wesley Edward Browne sworn on the 28th August, 1981 and filed herein so as to represent that Andronicus instant coffee is not imported.
2. Otherwise the application be dismissed.
3. The respondent pay one-third of the applicant's costs of these proceedings.
4. Liberty to apply be reserved on 2 days' notice.
5. Exhibits be returned unless an appeal is lodged within twenty-one (21) days.
This case is about instant coffee. The first applicant distributes in Australia instant coffee known as Moccona which is manufactured in Holland by the second applicant. The respondent distributes in Australia instant coffee known as Andronicus which is manufactured in Europe by a member of the Jacobs Group of Companies.
Instant coffee is of several different varieties but the most common is refined instant coffee. Another variety is spray dried and another is freeze dried. All these kinds of coffee occur in both decaffeinated and non-decaffeinated varieties.
Moccona and Andronicus are well-known brand names in Australia and are associated with premium quality instant coffee. Their distributors are locked in combat following the change made in the middle of this year to the containers for Andronicus instant coffee which is now marketed in a jar substantially the same as the jar in which Moccona has been sold for at least fifteen years. The jar is called an "apothecary" jar. It is a glass jar with a glass stopper that fits snuggly into the top of the jar making the jar airtight because of a plastic seal attached to the stopper. It is a handy jar to keep after the coffee has gone as it has many uses. Some changes were also made earlier this year to the labels on Andronicus coffee jars.
What sparked off the litigation was the screening of a television commercial for Andronicus instant coffee early in August this year which incurred the wrath of the applicants.
The applicants claim that, by procuring the broadcast of the television commercial and by supplying instant coffee in apothecary jars bearing labels in their present form, the respondent is, in trade or commerce, engaging in conduct that is misleading or deceptive or likely to mislead or deceive under s. 52 of the Trade Practices Act 1974. The applicants also claim that the television commercial makes false or misleading statements with respect to the price of Moccona and Andronicus instant coffees under s. 53 (e). The applicants seek injunctions under s. 80 of the Act.
I turn first to the television commercial. This was first shown on television in August on commercial television channels. It lasts for thirty seconds and opens by displaying an empty coffee jar with a glass stopper being an apothecary jar of the same kind in which both Moccona and Andronicus are sold. Silver coins rapidly fill the jar by building up from the bottom. The announcer then says:
"Some imported coffees come in a beautiful jar, but they cost the earth"
the emphasis in the first part of the statement being on the word "imported".
The picture then widens to reveal a second empty coffee jar but with a markedly different lid to the glass stopper on the first jar. Silver coins then slowly build up from the bottom of this second jar but only to about half the height of the coins in the first jar. The announcer says: -
"Other coffees come in a plain jar at a much lower price".
The picture then widens further to show a third jar being the new type of Andronicus jar. Silver coins then also build up from the bottom to form a small pile inside, roughly the same height as the coins in the second jar, although possibly a little higher. A human hand then turns the jar round about one hundred and eighty degrees to reveal the Andronicus label and it shows the jar full of coffee as it turns. The announcer says: -
"Only one offers you the right combination of quality and value. Andronicus . . . "
One then sees coffee granules going into a cup and being dissolved by hot water which is poured in; coffee is then sipped from the cup by a woman. The announcer says: -
"The taste . . . of coffee . . . from the heart of the bean."
One sees the Andronicus jar accompanied by the words "Andronicus. Premium Quality Instant Coffee". Then the screen shows the three jars and the announcer says: -
"At a sensible price".
The coins in the two empty jars then collapse.
The applicants mount two attacks on the television commercial. Both attacks assume that the viewer associates the first jar with Moccona coffee.
I have viewed the television commercial several times so that I could fully understand the submissions of the parties. Indeed, I cannot conceive of any other reason for seeing it more than once.
As first impressions of television commercials are important I should say that, although I have seen it a number of times, my first impressions of what this commercial conveys have remained.
There are three brands of instant coffee marketed in Australia in apothecary jars: Moccona, Andronicus and Jacobs. Jacobs is a brand of imported instant coffee produced by a member of the Jacobs Group of Companies engaged throughout the world in the production and distribution of coffee, tea and other food products. Jacobs instant coffee is sold in Australia; but in small quantities and in a small number of retail outlets, mainly delicatessens. Both Moccona and Andronicus instant coffees are sold mainly in supermarkets.
I am satisfied that people who look at the television commercial would associate the first jar with Moccona instant coffee. My view is confirmed by the evidence of witnesses who said that upon viewing the commercial they recognised the first jar as a Moccona jar.
The first attack on the television commercial is that Moccona coffee which comes in the first jar is said to be imported whereas Andronicus coffee in the third jar is represented as not being imported.
When a person produces a television commercial that, not only boosts his own product but, as in this case, compares it critically with the product of another so that the latter is shown up in an unfavourable light by the comparison, in my view he ought to take particular care to ensure that the statements are correct.
I am satisfied that the commercial conveys the impression that, although Moccona is an imported coffee, Andronicus is not. The commercial contrasts Moccona instant coffee as an imported coffee with Andronicus instant coffee. Although it does not in terms state that Andronicus is Australian made, this is the plain inference. This is false, misleading and deceptive. See R. v. Credit Tribunal; ex parte General Motors Acceptance Corporation (1977) 137 C.L.R. 545; Weitmann v. Katies Limited (1977) 29 F.L.R. 336 and Puxu Pty. Limited v. Parkdale Custom Building Furniture Pty. Limited (1980) 43 F.L.R. 405.
The second attack on the television commercial is that Moccona is represented as being twice as expensive as other instant coffees and, in particular, Andronicus.
The following table compares the average retail selling price of Moccona and Andronicus instant coffees for the four weeks ended 11 August 1981 on the basis of price per kilogram. If no price is shown it means that the particular size and variety of instant coffee is not sold by the first applicant or the respondent as the case may be.
VARIETY WEIGHT ANDRONICUS MOCCONA MOCCONA DEARER BY %
$ $Spray dried 50g. - 28.30 -
100g. 22.67 - - 200g. 18.02 23.28 29.2 500g. 18.23 - - TOTAL 18.07 24.40 35.0Granulated 50g. 20.08 - -
100g. 19.14 - - 200g. 18.73 25.66 37.0 TOTAL 18.95 25.66 35.4Freeze Dried 50g. 31.76 37.17 17.0
100g. 28.85 35.77 24.0 200g. 27.49 32.97 20.0 TOTAL 28.63 33.94 18.6Decaffeinated
Freeze Dried 50g. 39.47
Granulated 100g. 24.51
Spray Dried 200g. 24.63
_____ 24.89 ave. 30.67 23.2%The total sale of all instant coffee by weight across the range of products divided by the retail selling price shows that Moccona is 53.2% more expensive than Andronicus.
The particular jar of Andronicus coffee shown in the commercial is a 200g. jar of granulated instant coffee (Moccona is 37% more expensive in this variety); but this did not impress itself upon me very clearly. What is conveyed is a comparison between the prices of Moccona and Andronicus instant coffees generally.
At best for the respondent, by comparing the whole range of the rival products, Moccona is 53.2%, not 100%, more expensive than Andronicus.
However, I think a robust approach is called for when determining whether television commercials of this kind are false, misleading or deceptive. The public is accustomed to the puffing of products in advertising. Although the class of persons likely to see this commercial is wide, it is inappropriate to make distinctions that are too fine and precise.
As the commercial lasts for only 30 seconds and various things happen during its screening, it is difficult to measure with precision the difference in price that is said to exist between Moccona and Andronicus instant coffees. It is true that, by looking at the building up of coins in the jars, the pile of coins in the Moccona jar appears to be about twice as high as it does in the Andronicus jar. But in all the circumstances, when looked at broadly, the commercial is not false, misleading or deceptive in respect of the prices of the two coffees. The overall impression is that Moccona is considerably more expensive than Andronicus, and this it is.
I turn now to the second aspects of the applicants' case based on the labelling and general appearance of jars containing Andronicus instant coffee.
Moccona has been marketed in Australia in the apothecary jar for over fifteen years. Although the apothecary jar is not used only for the sale of instant coffee, until the respondent commenced to use it for Andronicus coffee this year, it was associated in the mind of the coffee consuming public with Moccona coffee. The applicants do not claim any monopoly in the apothecary jar whether for the sale of instant coffee or otherwise; but they assert that the use by the respondent of the same type of jar plus similar labelling confuses the public and misleads it into thinking that Andronicus instant coffee is Moccona.
The Andronicus business was founded in 1904 by members of the Andronicus family who migrated to Australia from Greece. The business was first conducted from premises in York Street Sydney and later from premises at 197 George Street, Sydney under the name "Andronicus Bros.". It involved importing, blending and packing tea and coffee and selling it by wholesale and retail.
The retail and wholesaling activities of the Andronicus business were divided between different members of the family in about 1959; and, when the respondent was incorporated in 1961, it took over the wholesaling side of the business. The respondent was incorporated as Andronicus Coffee Pty. Limited; but it changed its name to its present name in 1978.
In January 1981, Jacobs Australia Pty. Limited acquired a 50% interest in the respondent. Jacobs Australia is a wholly owned subsidiary of Jacobs A.G. which has its principal business address in Zurich. As a result of this association the respondent's activities were expanded to include the importation of packed instant coffee. Prior to the association with Jacobs Australia, the respondent did not import packed instant coffee.
The respondent has used the symbol of a man's head shown in profile and encircled with a laurel wreath as a method of distinguishing its products from other coffee products since the mid 1960's. It has appeared on all coffee products sold or distributed by the respondent since then including the instant coffee products the subject of these proceedings.
Prior to the adoption of the apothecary jar in the middle of this year, the containers in which the respondent marketed its instant coffee included tin cans, glass jars with plastic lids and plastic jars with plastic lids.
In recent years a general movement occurred in the instant coffee business towards a glass jar as this appeared to be favoured by consumers.
At the request of the respondent, Glass Containers Limited designed a glass jar with a glass stopper for the respondent's use. For commercial reasons the respondent did not use it and requested Glass Containers Limited to redesign the jar so as to be suitable for a plastic screw top as the respondent had mechanised facilities for putting these onto the jars. The respondent then used the redesigned glass containers for its instant coffee products and commenced to sell coffee in these containers in early 1980. The jar itself is similar in shape and appearance to the apothecary jar although the lid is quite different being a plastic screw top lid.
When the respondent commenced its association early this year with Jacobs A.G. the latter made available to the respondent the glass jar in which Jacobs A.G. coffee products are sold in Europe and other parts of the world namely, the apothecary jar. The respondent was offered the jars with both plastic screw tops and glass stoppers. The respondent selected the apothecary jar with the glass stopper. Andronicus instant coffee has, since May 1981, been packed, and labelled by Jacobs A.G. in West Germany.
Andronicus labels have varied over the years in colour, size, shape, form and style. It is an unnecessary and an unduly lengthy exercise to trace the development of Andronicus labels to the present day. Changes were made to the labels earlier this year to accommodate them to the new apothecary jar. The critical question is whether the labels presently used on Andronicus instant coffee apothecary jars would mislead or deceive the public into believing that they are buying or using Moccona instant coffee.
The respondent presently sells Andronicus Gold Freeze Dried instant coffee in three sizes; 50g., 100g., and 200g. Moccona Freeze-Dried instant coffee comes in the same sizes. If there is any real risk of confusion it is probably here that the applicants' case is at its strongest, in particular with the smallest size, namely the 50g. size.
The predominant colour of the label of Moccona and Andronicus on all three sizes is gold; but the top of the gold coloured area of the Andronicus label is irregular in shape and is capped by a band of a brighter gold than the body of the label itself; and there is a similar brighter gold band at the bottom of the label, but it is narrower. Moccona has a broad brown band at the bottom and a narrow brown band at the top of the label. Above the irregular top gold band on the Andronicus label is a brown band with vertical black or dark brown stripes making the top edge of the label straight and parallel to the bottom edge, as is the case with the Moccona label. The brand names "Moccona" and "Andronicus" are prominantly displayed in each case, surmounted in the case of Andronicus by the laurel wreath encircling the male head in profile. The name "Andronicus" and the name "Moccona" are printed in a different style and colour from each other - Andronicus being printed in white with black edging and Moccona being printed in red with gold edging. Each label states plainly the variety of instant coffee contained in the bottle, although in the case of Moccona, the printing is in a different style and "Freeze-Dried" is hyphenated. Also the variety is printed in one straight line with Moccona whereas in the case of Andronicus it is on two separate lines with the word "Gold" written above it in red.
"He (the learned trial Judge) accepted that on occasions there was confusion at the point of sale: but he found, and there was plenty of evidence on which he could find, that the confusion was almost always corrected before the moment of sale. Such confusion as there was arose, in his view, from the casual attitude of many purchasers in the market to the product offered and not from any failure of the defendent sufficiently to distinguish its product from 'Solo'."The combinations of colours in both the Moccona and Andronicus labels are much the same namely, gold, brown, red, white and black; but save for the gold background colour they are used generally in different ways on the respective labels.
If one looks at the two products side by side in their respective bottles and sizes, there are certain similarities between them, the basic similarity being identical bottles and then substantially the same gold background colour of the labels. But there the similarity seems to me to end. The basic difference between the two is that the two brand names are prominently displayed and each is well-known. Viewed in this way (that is side by side) I do not think that the Andronicus product is misleading or deceptive or likely to mislead or deceive.
The next complaint of the applicants is with respect to Moccona Refined instant coffee in 50, 100 and 200g. sizes and Andronicus Granulated instant coffee in the same sizes.
The basic background colour of the label in each case is red although the Andronicus red is brighter than the Moccona red.
Otherwise the labels are much the same as I have described in the case of the Freeze Dried instant coffee except of course for the description of the variety.
Again I do not regard the Andronicus product as misleading or deceptive.
The next complaint by the applicants is with respect to the Moccona Granulated instant coffee 50g. size and Andronicus Decaffeinated Granulated instant coffee 100g. size. Both labels have a blue background although the Andronicus blue is a shade brighter than the Moccona blue.
Again there are the same differences that I have referred to earlier in the case of other labels. Also the sizes of the containers and the weight of the contents are different - Moccona 50g. and Andronicus 100g. The applicants fail to establish their case with respect to these products.
Finally, the applicants complain that the Moccona Decaffeinated instant coffee 50g. size and the Andronicus Decaffeinated Freeze Dried instant coffee 50g. size are deceptively similar. Each has a label with the same basic background colour of yellow. Again there are the differences to which I have referred earlier. Again, no case has been made out with respect to this variety of Andronicus coffee.
The applicants do not seek to prevent the respondent from using the apothecary jar. As the labels of Moccona and Andronicus are different in many respects, the applicants' case is really reduced to complaining about the similarity in background colour between the two labels. However, this does not establish the applicants' case whether taken alone or in conjunction with any other points of similarity that may exist. The plain fact is that the two brands of coffee are well-known and the brand names are prominently displayed on every label. In my view there is no real likelihood of confusion, let alone confusion to the extent of being misled or deceived.
Of course, when the respondent switched to the apothecary glass jar with the glass stopper earlier this year it doubtless set the stage for possible confusion between Andronicus and Moccona instant coffees because they are both premium quality instant coffees, and no other instant coffee distributor yet markets its products in an apothecary jar, except for Jacobs which, according to the evidence, is little known in Australia and sold in only a limited number of retail outlets. I have taken this matter into account; but nevertheless I conclude that there is no misleading or deceptive conduct or conduct which is likely to mislead or deceive.
Nor do the applicants complain about the whole range of Andronicus instant coffee varieties currently being marketed. Indeed, some Andronicus premium instant coffee is presently being distributed and sold in glass bottles with screw-on plastic lids.
In concluding that the applicants have failed to establish a case of misleading or deceptive conduct I have nevertheless taken into account the fact that the members of the public most likely to be misled or deceived are people who buy instant coffee in supermarkets throughout Australia.
Shoppers in supermarkets are probably not anxious to prolong the agony of wheeling trolleys between rows of food products and avoiding collision with other trolleys, often to the unwelcome accompaniment of clamorous babies, and children impatient to escape from the shop or to buy everything in it except the household needs. I say nothing about attendant spouses who, if husbands, wait in varying degrees of impatience to perform their function as beasts of burden. Shoppers are probably inclined to select their goods quickly.
Instant coffees are usually displayed on supermarket shelves in the same section; and Moccona and Andronicus are frequently displayed in a variety of proximate positions; including side by side, one on top of the other, all jumbled together in hapless disarray, or one in the wrong place in the sense that the space has a marker stating that it contains the other product.
Evidence was given by one witness who is the owner and manager of a supermarket in Sydney. About three or four weeks ago he ordered a box of Andronicus 50g. Gold Freeze Dried instant coffee from a distributor. When the box arrived he opened it and thought that the distributor had sent him Moccona instead of Andronicus. When he looked more closely he saw from the label that the coffee was in fact Andronicus. This evidence does not in my view support the applicants. All it means is that the use of identical jars focuses attention upon the labels as the means of distinguishing the two brands.
There is evidence that in August 1981 a carrier employed by the first applicant returned in his truck to the first applicant's warehouse with fifty damaged coffee bottles to be credited to the account of a well-known supermarket chain. Forty-seven of those bottles contained Moccona instant coffee but three of them, all damaged and one to such an extent that only part of the bottle remained, were 50g. bottles of Andronicus Freeze Dried instant coffee. This is the only occasion on which the respondent's products have been returned to the first applicant. This instance was relied on by the applicants to support a case of misleading or deceptive conduct; but it is a weak reed on which to rely, as the conduct could be explained by a number of reasons having nothing to do with the particular supermarket chain being misled or deceived into thinking that the coffee returned to the first applicant was Moccona coffee.
There is evidence that sometimes the wrong price is placed on a particular brand of coffee on supermarket shelves by the supermarket's staff. This does not necessarily support a case of misleading or deceptive conduct by the respondent.
There is also evidence from the manager of a Sydney suburban supermarket who associated the apothecary type jar with Moccona coffee, but had to educate himself after July this year to distinguish Moccona and Andronicus instant coffees from each other by their labels. Again this does not avail the applicants.
There is evidence that some buyers in supermarkets seeking Moccona first mistakenly select Andronicus; but realise their mistake before paying for their purchases at the cashier's desk. These incidents do not support the applicants' case. I adopt the following passage from the opinion of the Judicial Committee, given by Lord Scarman, in Cadbury-Schweppes Pty. Limited v. Pub Squash Co. Pty. Limited 1981 1 W.L.R. 193 at p. 205: -
The Pub Squash case concerned passing off and not misleading or deceptive conduct under the Trade Practices Act 1974; but the passage which I have cited applies in my opinion to the present case.
The applicants therefore fail in this case except as to the television commercial to the extent that it represents that Andronicus instant coffee is not imported.
The applicants base their case alternatively on passing off; but counsel for the applicants rightly conceded that, if the applicants do not succeed under the Trade Practices Act, they cannot otherwise succeed.
I will not make orders today other than to adjourn the application to a date to be fixed so that counsel may bring in short minutes. In addition to injunctive relief the short minutes should also provide for costs. The appropriate order is that the respondent bears one-third of the applicants' costs of the proceedings because the applicants have succeeded, although to a limited extent.
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