Volcano (International) Medical AB v Vulkan (Australasia) Medical Pty Ltd

Re: VOLCANO (INTERNATIONAL) MEDICAL AB; AUSTRALIAN SPORTING SALES PTY. LIMITED
and KJELL NILSSON
And: VULKAN (AUSTRALASIA) MEDICAL PTY. LIMITED; MARK McLAURIN-SMITH and
THERMOSKIN INTERNATIONAL MEDICAL PTY. LIMITED
No. G191 of 1985
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Bowen C.J.

CATCHWORDS

Trade Practices - misleading or deceptive conduct - Australian distributor marketing Swedish product under compound trade name - use of part of name by respondent for its similar Australian-made product - comparison of get-up - whether respondent had sufficiently distinguished its product - likelihood of mistaken belief by retailers or purchasers that respondent's products are from same source as applicants' products - pendent claim for passing off - cross-claim - respondent seeking order directing applicants to publish a retraction of a notice distributed by them to retailers containing false and damaging allegations against respondent.

Trade Practices Act 1974 - ss.52,53.

HEARING

SYDNEY
#DATE 20:9:1985

ORDER

1. The application be dismissed.

2. The interim injunction ordered against Vulkan (Australasia) Medical Pty. Limited, Mark McLaurin-Smith and Thermoskin International Pty. Limited be discharged.

3. Volcano (International) Medical AB, Australian Sporting Sales Pty. Limited and Kjell Nilsson pay to Vulkan (Australasia) Medical Pty. Limited, Mark McLaurin-Smith and Thermoskin International Medical Pty. Limited their costs of the application including their costs of the interim injunction.

4. The cross-claim be stood over to a date to be fixed to enable the cross-claimants to bring in short minutes of order.

5. Each party has liberty to apply on two days notice.

NOTE: Settlement and entry of orders is dealt with in Order 36

of the Federal Court Rules.

JUDGE1

This is an application for injunctive and other relief under ss.52 and 53 of the Trade Practices Act and also for passing off. The application concerns the use of the name "Thermoskin" on goods.

The matter came before this Court recently for determination of the question whether interlocutory relief should be granted. An early hearing of the substantive case was offered to the parties. Thereupon, by consent and without admissions upon the applicants giving the usual undertaking as to damages injunctions were granted restraining the respondents until further order from trading in the manner complained of.
At the commencement of the hearing before me it became apparent that the first respondent Vulkan (Australasia) Medical Pty. Limited was no longer trading in the disputed products and had not done so since 9 August 1985 when a company Thermoskin International Medical Pty. Limited was incorporated and commenced trading. The applicants obtained leave to amend their statement of claim by joining Thermoskin International Medical Pty. Limited as third respondent and by adding or amending allegations and claims for relief in the statement of claim to refer to it. The respondents amended their notice of defence to deal with this situation. It was stated by counsel for the respondents that since 19 August 1985 when the interlocutory injunction was granted there had been no trading by Thermoskin International Medical Pty. Limited in the disputed product as a matter of grace rather than obligation. Upon the applicants giving the usual undertaking as to damages I made orders restraining the third respondent until further order in terms similar to the interlocutory injunction previously granted against the first two respondents.
Volcano (International) Medical AB, the first applicant (Volcano International) is a company established under the laws of Sweden which manufactures a range of body protectors made of a elastic material and stitched in a special way so as to enable expansion and contraction to take place. Since early in 1984 it has exported these goods to Australia. Sporting Sales Pty. Limited, the second applicant, (Sporting Sales) is a company incorporated in New South Wales, which distributes sporting goods throughout Australia. Sporting Sales and Kjell Nilsson, the third applicant, are currently the importers and distributors of the Volcano International body protectors in Australia.
In the latter part of 1983 Mr. Nilsson visited Sweden and had talks with Per Tranberg the president of Volcano International. Subsequently in March 1984 an agreement was entered into between Volcano International Medical AB of the one part and Otology Services Pty. Limited (pending name change to Vulkan (Australasia) Medical Pty. Limited) of the other part whereby Volcano International granted to Otology Services (Vulkan Australasia) the exclusive right during the continuance in force of the agreement to purchase for resale in the territory specified in the schedule the products of Volcano International subject to the terms and conditions of the agreement. The period of the agreement was one year (in case of written notice six months in advance from one of the parties) otherwise five years. The agreement contained a provision that Volcano International should have the right at any time by giving notice in writing to the distributor to terminate the agreement forthwith if the distributor committed a breach. The territory according to the schedule included Australia, New Zealand, Singapore, Malaysia, Hong Kong, Indonesia and New Guinea.
By an agreement between Volcano International and Vulkan Australasia dated 25 December 1984 the agreement of March 1984 was varied. The term was extended and the Territory was thereby defined as Australia, New Zealand, Singapore, Malaysia, Hong Kong, Indonesia, New Guinea, Japan, Mainland China, Korea, Philippines, United Arab Emirates, Saudi Arabia, Kuwait, Bahrain, Qatar, Yemen, Oman, Iran, Iraq and the United States of America.
By agreement dated 1 March 1984 between Vulkan (Australasia) Pty. Limited and Australian Sporting Sales Pty. Limited, Vulkan Australasia granted to Australian Sporting the exclusive distribution rights to the Australian sporting goods retail industry for all Vulkan heat protection products as portrayed and described in an attached brochure. It was provided that Vulkan Australasia or its authorised distributors would distribute to and service all other types of outlets other than the Australian sporting goods retail industry outlet. The contract was to commence on 1 March 1984 and terminate on 28 February 1987.
During March 1984 meetings were held between Mark McLaurin-Smith and Kjell Nilsson, the principals of Vulkan Australasia, Les Miller, General Manager of Australian Sporting, Gregory Russell, an advertising consultant and John Curran, Marketing Manager of Australian Sporting, for the purpose of discussing the promotion of the product and the form and nature of the advertising to be adopted.
Various drafts of brochures were considered. It was eventually decided to use in promotion material the representation of an exploding volcano, the word "Swedish" in black capitals the word "Vulkan" in large blue capitals and the word "Thermoskin" in large sloping red capitals. This combination of the exploding Volcano and the words "Swedish Vulkan Thermoskin" was thenceforth commonly used in brochures. The product made in Sweden by Volcano International and imported by Vulkan Australasia generally had impressed upon the actual article an exploding volcano over the word "Vulkan" in large white type. The plastic bag in which each product was wrapped generally had on the front an exploding volcano with the words Vulkan Physiological Heat Protector (in four languages) and the words Volcano International Medical AB with an exploding volcano. On the back were lists of effects claimed to be produced by use of the product (in four languages) and directions for use (in four languages), a representation of a girl athlete wearing a knee guard with the representation of products for other parts of the body and at the bottom the words Volcano International Medical AB Goteborg - Sverige, a representation of an exploding volcano and the words "Made in Sweden". The word "Thermoskin" does not appear on the Swedish product or package. It appears to have been a word devised and used only in Australia in brochures and other advertising material.
A conflict of evidence arose as to who first suggested the word "Thermoskin". The Australian distributors were dissatisfied with the description of the product as a "heat protector". They were seeking a better descriptive word for the goods. Mr. Miller claimed he suggested the word "Thermoskin" at a meeting early in March 1984. He was supported in this claim by the evidence of Mr. Russell and Mr. Kjell Nilsson. All three gave evidence that later in March 1984 Mark McLaurin-Smith suggested the word be spelt "Thermoskiin", with two i's. But this suggestion was rejected by the meeting and in fact the word "Thermoskin" was used in the brochures which were issued after March. Mr. Mark McLaurin-Smith gave evidence that he thought up the name "Thermoskiin" at a meeting on 21 March 1984 at the office of Vulkan with Mr. Nilsson and a Mr. Fookes. He denied that the earlier meetings in March of which Mr. Miller gave evidence had taken place and denied that Mr. Miller had suggested "Thermoskin". Mr. Miller's relevant diary entries are in evidence. They suggest meetings were fixed for the times and dates deposed to by Mr. Miller. In cross-examination Mr. McLaurin-Smith's diary was produced. It also showed meetings with Mr. Miller were fixed for the times and dates deposed to by Mr. Miller. But Mr. McLaurin-Smith swore that although the entries remained in his diary he did not attend the meetings deposed to by Mr. Miller. I do not find the evidence on either side on this question completely satisfactory.
The authorship of the word "Thermoskin" might be of some relevance in proceedings relating to registration of it as a trade mark. It is better if I express no view upon this question. It is of little significance in these proceedings under the Trade Practices Act and for passing off. The public would have no knowledge of authorship of the word. The fact is that the word "Thermoskin" was used during 1984 and 1985 in brochures and some other advertising material issued by Vulkan Australasia in relation to the distribution of the products of Volcano International. Any impact upon the public during the period would have to come from this. There would be no impact upon a purchaser from inspection of the product or the packaging of this product since the word "Thermoskin" was not used upon that.
On 27 March 1984 Vulkan Australasia applied for registration of "Thermoskiin" as a trade mark in classes 10 and 25. The application was signed by Mr. McLaurin-Smith. He gave evidence that he instructed Mr. Nilsson to go to the Trade Marks Office in January 1985 and make an application to amend the applications by altering the spelling from two to one "i", so that it would be spelled "Thermoskin". He said he received a document from the Canberra Office of the Trade Marks Office accepting this amendment on about 21 March 1985.
On 11 April 1985 application was made by Vulkan Australasia for registration of a logo consisting of three overlapping pyramids.
On 8 July 1985 application was made by Habin Pty. Limited for registration in class 10 of a trade mark depicting an exploding volcano and the words "Swedish Vulcan Thermoskin". It was suggested Habin Pty. Limited on the same date applied to register "Vulkan Thermoskin" in class 10 but this application is not in evidence. Habin Pty. Limited is not a party to these proceedings, yet it is the company which by its application claims to be entitled to registration of the mark depicting the exploding volcano and the words "Swedish Vulcan Thermoskin". This raises some question as to the claim of the applicants to this mark. Mr. Miller, General Manager of Australian Sporting was asked about Habin Pty. Limited in cross-examination.

"You have told me that - perhaps we could get it clear; what do you say Habin is, Habin Pty. Limited?---I say it was initially, from my recollection, the shelf company that was obtained prior to - what shall I say - the liaison of ASS and Kjell Nilsson.

In terms of the present, are not the shares in Habin Pty. Limited owned as to one share by Mr. Nilsson and as to another share by Australian Sporting Sales Pty. Limited?---Yes.

Has that company been authorized by you, Mr. Miller, to make an application for registration of the trade mark that you see in front of you?---I think I should explain that Mr. Nilsson in his capacity as a director of the company that was handling Vulkan was assigned by me as far as I was concerned the every-day running of it. Having contributed a fair amount of effort into establishing Vulkan, when the situation changed I rather left it to Kjell Nilsson to look after it.

Did you authorize Mr. Nilsson to permit Habin Pty. Limited to make that application for registration?---I could have but I do not recall it.

It follows, does it not, Mr. Miller, that if Habin Pty. Limited is making an application for that trade mark that it, Habin Pty. Limited, claims to be the owner of it?---That is a logical conclusion, yes."

Later Mr. Nilsson gave evidence. He was examined in chief.

"You have heard some questions here put to Mr. Miller in court about a company Habin Pty. Limited. Are you a shareholder of that company?---Yes, I am.

How did you come to be a shareholder in that company?---Together with an agreement with Mr. Les Miller of Australian Sporting Sales.

Did you have anything to do with getting the company from any accountant?---Would you say again?

How did the company come to be incorporated, do you know?---It was through Les Miller's accountant.

There were some questions asked about trademark applications made by the company. Are you familiar with those trademark applications?---Yes, I am.

How did they come to be made?---They came to be made because when we found out we have legal legs to stand on regards the Vulkan thermoskin, particularly thermoskin, I went down and put an application in in Habin Pty. Limited's name. It has now changed to Volcano Australia."

The papers produced by the Registrar of Trade Marks and tendered in evidence do not reveal a change to Volcano International and no evidence was led of any relationship between Habin Pty. Limited and Volcano International. However, I will proceed upon the basis that if Volcano International had established rights to the mark "Swedish Vulkan Thermoskin" in Australia during 1984 and early 1985 it had not transferred or lost them to Habin Pty. Limited by 8 July 1985.
Two other applications may be mentioned. It was stated from the Bar table that an application was made on 1 December 1983 for registration of the trade mark "Vulkan" but there appears to be no evidence relating to this.
There were in evidence the papers relating to the grant of a petty patent dated 16 February 1984 granted to Volcano International which had been extended to 1 December 1989. The patent was for a method of stitching used in the construction of Volcano International's products. There is no claim in the proceedings for infringement of patent.
As has been mentioned, during the year 1984 and early 1985 advertising in the form of brochures and leaflets depicting an exploding volcano and bearing the words "Swedish Vulkan Thermoskin" was distributed to retailers and others. Also there was some advertising in The Sun and Mirror newspapers and Fun Runner magazine, and a racing magazine. The evidence of this advertising together with evidence of sales of the products bearing the exploding volcano and the word "Vulkan" and the name of Volcano International with the statement "made in Sweden", would lead me to infer that some retailers and perhaps some customers in Australia would associate the exploding volcano and the words "Swedish Vulkan Thermoskin" or "Vulkan Thermoskin" with the product of Volcano International. No witnesses, whether retailers or purchasers, were called to give evidence of reading any of this material or stating what they got from it.
There was a falling out between Mr. Nilsson and Mr. McLaurin-Smith. In March 1985 Mr. Nilsson visited Sweden and had discussions with Per Tranberg of Volcano International. Volcano International instructed Messrs. Townsend and Edstein, solicitors of Sydney, to terminate the two agreements of March 1984 and December 1984 for breach, in that certain moneys due from Vulkan Australasia under the agreement had not been paid. By letter dated 28 March 1985 Messrs. Townsend and Edstein wrote to Vulkan Australasia terminating the agreement as from the date of the letter.
There was some dispute whether this was a proper termination. It is unnecessary to consider the question because all parties accept that the distribution agreement was at an end prior to the commencement of the present proceedings. Each party has since been acting upon that basis. This is not a proceeding for wrongful termination of the agreement.
On 1 April 1985 a fresh distribution agreement was made between Volcano International, Australian Sporting and Mr. Nilsson. Thereafter Australian Sporting and Nilsson carried on as distributors of the Swedish product very much in the same way as before.
The suddenness of the termination of its distribution agreement left Vulkan Australasia in some difficulty for a period. It had stock on hand of the Swedish product. It continued to dispose of this stock. As time went on it appears it arranged for the manufacture in Australia of a similar product, which it proceeded to sell under the name "Thermoskin". The Statement of Claim seeking orders restraining Vulkan Australasia was filed on 6 August 1985. I am not aware when it was served. Another company was formed called Thermoskin International Medical Pty. Limited (Thermoskin International) on 9 August 1985 and shortly thereafter it engaged in the distribution of the Australian made product under the name Thermoskin. Vulkan Australasia then ceased to operate. As has already been mentioned the new company was joined as third respondent during the hearing before me.
It is not possible from the evidence to say precisely when Vulkan Australasia first began making its own product. Some time must necessarily have elapsed after termination of the distribution agreements before it could do so. Then, it ceased to sell its Thermoskin products after Thermoskin International was formed. During that limited period it appears that it sold its Australian product using the name "Thermoskin". Mr. Mark McLaurin-Smith gave evidence on affidavit that on 13 May 1985 Vulkan commenced supplying the product "Thermoskin" to retailers. The product had embossed on it in blue-white the word "Thermoskin" and three overlapping solid triangles or pyramids. It was in a plain plastic package which had the printed word "Thermoskin" apparently cut from some brochure and stuck on the plastic. Inside the package was a leaflet indicating in four languages what effects the article would produce and directions for use. A representation in silhouette of articles for use on different parts of the body surrounding three overlapping solid triangles or pyramids was also displayed on the leaflet. Finally it had on the leaflet "Vulkan (Australasia) Medical Pty. Limited Sydney Australia". "Made in Australia". This was a somewhat amateurish get-up. I am of opinion that a retailer or purchaser would not be misled or deceived by it or be likely to be led or deceived by it into thinking the goods were the Swedish product of Volcano International. In his affidavit evidence Mr. McLaurin-Smith swears also that on 10 June 1985 the "Thermoskin" logo was changed and this was incorporated in a new form of packaging for the product. An example of this is in evidence. It shows a package consisting of a clear plastic bag with nothing on it. Inside is the article apparently a knee-guard which has embossed in white the word "Thermoskin" and three overlapping A's. Also included are two leaflets, one containing directions having in large type Thermoskin "Made in Australia" and in smaller type "By Thermoskin International Medical Pty. Limited Sydney"; the second leaflet in black and white having "Thermoskin" in association with three overlapping A's and an Australian flag and at the bottom in small type Thermoskin International Medical Pty. Limited in association with three overlapping A's. However, Thermoskin International had not at that date been formed. Retailers and purchasers of these products would not, in my opinion, be misled or deceived or likely to be misled or deceived into thinking that these goods were the Swedish products of Volcano International as contended.

According to Mr. McLaurin-Smith, on 29 July 1985 Vulkan Australasia commenced supplying retailers with Thermoskin products in another new form of packaging. An example of this is in evidence. It is the use of this latest form of packaging which the applicants in these proceedings now seek to restrain. I will deal with it in more detail later.
It should here be noted that the application which commenced the present proceedings, supported by affidavit was filed on 24 July 1985. Later, on 6 August 1985 a statement of claim was filed. As has been noted earlier, on 9 August 1985 Vulkan Australasia ceased to sell its products and the third respondent Thermoskin International commenced to sell them (in the last form of packaging).
Before dealing with the final packaging used by the respondents, I return to the period April/July 1985. In this period the applicants continued to use the exploding Volcano and the words "Swedish Vulkan" in their brochures and leaflets. Sometimes they used "Swedish Vulkan Thermoskin". Two examples of the applicants' newspaper advertising during this period are in evidence. They are full page advertisements in the Fun Runner June/July 1985 and The Sun newspaper of 11 July 1985. These advertisements, which appear to be identical, feature the word Vulkan - "Vulkan is a unique, specially woven material with small spiral cells, bonded to anatomically shaped body parts.." "VULKAN - the greatest advancement in running since the 4 minute mile". Prominently at the bottom is the exploding volcano logo and the printed words Swedish Vulkan - the word Vulkan being in very large type. Then appears "Trade enquiries to Australian Sporting Sales Pty. Limited." The word "Thermoskin" is not used in either of these advertisements.
Some evidence of confusion during this period April/July 1985 was given by the applicants in the form of affidavit evidence. Lynda Jane Spry, an employee of Australian Sporting, gave evidence that on 8 July 1985 she purchased goods of the respondent Vulkan Australasia at two pharmacies which were packaged in plastic bags with the printed word "Thermoskin" stuck on the plastic. She was not misled. The chemists were not called. James Fraser Douglas, another employee of Australian Sporting, gave evidence of a telephone call he received on 4 July 1985 from someone who asked for the phone number of the Vulkan factory. Mr. Douglas said it was in Sweden whereupon the caller said: "Isn't the main office at Cook's Road, Centennial Park" and hung up. Later Mr. Douglas rang the caller, a Mr. Henry and said: "Could you give me the address of that factory you are talking about?" to which Mr Henry replied: "396 Princes Highway, St. Peters." Thermoskin did not enter into this conversation. Mr. Douglas was not misled. Mr. Henry was not called so we do not know what affected him. There is nothing to prove that any conduct in trade by the respondents misled or deceived him.
Anthony John Christie, a medical officer of the Government Insurance Office, gave somewhat confusing evidence of purchasing products in 1984 and in 1985 and of receiving letters from the respondent Vulkan Australasia. He thought the products purchased in 1985 were the same as the product purchased in 1984.
In his affidavit he deposed to receiving one letter. Cross-examined he gave evidence he had received three letters. Shown one which he said he had received, he agreed that had he read it through he would have understood there were two products, but said: "I rarely ever read letters like this right through word for word. I scan the letter". There is nothing to prove that any conduct in trade by the respondents misled or deceived him.
Kim Margaret Kelly is a nurse/receptionist employed by the Trade Union Medical Centre. She gave affidavit evidence that she was supplied with some Swedish wrist supports in 1984. In July 1985 she received a letter from Australian Sporting referring to the commencement of legal proceedings in relation to the product. She then had a call from Mr. Andrew McLaurin-Smith who told her to take no notice of the letter. She continued to order the product from Mr. Andrew McLaurin-Smith and deposed that she was unaware she was purchasing anything different from the products she purchased in 1984. In view of her knowledge of the existence of a dispute and the change in get up (assuming she was not supplied from old stock consisting of the Swedish product) it is difficult to appreciate her confusion but she was not cross-examined. We do not have the product she was supplied with in 1985. I am not satisfied that any conduct of the respondents misled or deceived her.
Dave William Millanta is an investigator and mercantile agent. On 27 June 1985 at the request of Mr. Nilsson, he visited premises situated at 3a/2 Cook Road, Centennial Park in company with one Peter Glen Bishop. They met Mr. Mark McLaurin-Smith and Mr. Andrew McLaurin-Smith. A conversation followed between Mr. Bishop and Mr. Andrew McLaurin-Smith as a consequence of which Mr. Bishop was given a knee guard for his right arm and told he need not pay for it. This knee guard is in evidence. It is of the lighter blue material used for the Australian made product. It has embossed in blue-white letters the word "Thermoskin". Mr. Bishop was not called to give evidence. There is nothing in the evidence to suggest he was misled or deceived. Clearly the investigator, Mr. Millanta, was not misled or deceived. There are other examples of the respondent's product in evidence. The material appears to be similar to that of the knee guard.
Altogether, I may say it has not been shown that the respondent Vulkan Australia, during the months of April to July 1985, engaged in conduct in trade or commerce which was misleading or deceptive or likely to mislead or deceive.
I turn now to the latest packaging in respect of which the applicants press for an injunction.
It should be said at once that the respondents do not claim any right to use the exploding volcano or the words "Swedish Vulkan Thermoskin" or "Vulkan Thermoskin". Their position is that they are entitled to use the word "Thermoskin" in a manner which distinguishes their product from the Swedish product.
The respondents product is similar in appearance. It is an elastic material of a blue colour with red stitching at the top and bottom and red, white and blue stitching down the middle. The Swedish product is of a somewhat darker blue and to my mind gives the impression of being a superior material. The Swedish product has embossed in white upon it an exploding volcano and the word "Vulkan". The Australian product has on it in blue-white capitals the word "Thermoskin". This is sometimes accompanied by three overlapping triangles with the bottom cut out to look like A's.
The packages of the respondent are clear plastic and bear some similarities to the packages of the applicants. They have a statement of what the product will achieve set forth in four languages and directions as to use in four languages. The statement and directions are not identical but have substantial similarities. The Australian package bears on the front the word "Thermoskin" in blue with the three overlapping triangles in blue and red with the bottom cut out to look like A's and an Australian flag in colour. The predominant colours are red, white and blue. It bears at the bottom the words Thermoskin International Pty. Limited with the three overlapping cut out triangles. On the back, in addition to the statement of what it achieves and directions for use, it depicts a young man wearing specimens of the product on different parts of his body. At the bottom it has in black prominently printed three overlapping cut out triangles, the word "Thermoskin" the words "Made in Australia" in capitals and, in less prominent type the words "by Thermoskin International Medical Pty. Ltd., Sydney."
The get-up of the Swedish product has already been described.
The product according to the evidence is not a cheap one. It is a product to which a purchaser would give some attention if he were purchasing it.
It is my opinion that a retailer or purchaser would not be deceived or misled or likely to be deceived or misled into thinking that he was purchasing the Swedish product if he purchased the product of the respondent. Although there are similarities there are distinguishing differences. The Australian flag and the words "made in Australia" are sufficiently prominent to come to the attention of any purchaser.
Counsel for the applicants said the claim for passing off was pressed but it was based on exactly the same factual materials. He did not address separately upon it. In my opinion no case of passing off has been made out.
It follows from what I have said on the issue of liability that the question of any damages suffered by the applicants does not arise. In the result the application will be dismissed with costs. The interim injunction which is still current will be discharged.
The respondents put on a cross-claim alleging that on or about 18 July 1985 Volcano International, Australian Sporting and Mr. Nilsson had caused to be distributed to customers of Vulkan Australasia a notice representing that heat retainers were being marketed and sold in infringement of Australian Petty Patent No.534719 and that they had commenced proceedings for infringement of the Petty Patent in respect of these heat retainers. It was alleged that the statements were false. They sought relief in the form of an order restraining distribution of any such notice to the customers of Vulkan Australasia and an order that the cross-respondents cause to be sent to all customers of Vulkan Australia who had received any such notice as that referred to, a further notice stating that it is not true that heat retainers are being sold in infringement of Australian Petty Patent No.534719 and not true that the cross respondents or any of them have commenced proceedings for infringement in respect of the said heat retainers. This was alleged to be misleading or deceptive conduct causing damage to the respondents. The claim was not based on s.121 of the Patents Act 1952.
The evidence was that such a notice had been sent out. Mr. Nilsson gave evidence that it had been sent to about 35 people who were people who bought the Swedish Vulkan product. He agreed the intention was to prevent them from buying Mr. McLaurin-Smith's product. He further agreed he now knew that no proceedings had been commenced for infringement. He was asked about infringement but after objection was taken the question was not pressed. The petty patent relates to a method of stitching with a particular arrangement of needles. It was at least asserted that Vulkan Australasia did not use this method but the evidence does not permit me to rule on the question whether or not there was an infringement. Certainly no infringement was proved. I should add that also in evidence is a circular letter from Mr. Andrew McLaurin-Smith which contains the words:

"You may have received a letter recently stating that we are in breach of a petty patent. This is incorrect and no action can be taken against us to stop the marketing of the superior product, THERMOSKIN."

In my opinion the cross-claim has been made out in that the circular sent out to about 35 people was false in stating that proceedings for infringement had been commenced.
But the question what relief, if any, should be given is more difficult. On the evidence there is no longer any threat to send out any further notice. I consider it would be inappropriate to grant an injunction in the terms asked for. As to the suggested letter of correction, the letter from Mr. Andrew McLaurin-Smith will no doubt have gone some way to correct the wrong impression created. In some circumstances a retraction many weeks later which has to reflect the original false assertion may prove counter productive. In any event I would not be prepared to order a retraction in the terms sought. It may be that simply to make an order for the respondents' costs of the cross-action to be paid by the cross-respondents may be sufficient. However, what I will do in this regard is stand over the cross-claim to a date to be fixed to enable the cross claimant to bring in short minutes of such orders as it now seeks in the light of these reasons for judgment. I will then hear argument and decide what order, if any, should be made.

[1985] FCA 494

20 SEPTEMBER 1985