Voyager Distributing Company Pty Ltd v Cherry Lane Fashion Group Ltd
[1985] FCA 64
•05 MARCH 1985
Re: VOYAGER DISTRIBUTING COMPANY PTY. LTD.
And: JUMP DISTRIBUTORS (AUST.) PTY. LTD.; CHERRY LANE FASHION GROUP LIMITED;
CHERRY LANE PTY. LTD. and MARC CYWYNSKI
No. VG 32 of 1985
Trade Practices
4 IPR 247
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Sweeney J.
CATCHWORDS
Trade practices - applicants and respondents both in business of manufacturing, importing, marketing and distributing ladies garments, catering especially for the younger age groups - whether use by respondents of the word "Jump", bearing in mind the earlier use by the applicants of that word, amounted to misleading or deceptive conduct or representations that the respondents or their goods had sponsorship or approval that they did not have - whether passing off - whether breach of trade mark.
Application for interlocutory injunction - test of serious question to be tried - balance of convenience.
Trade Practices Act 1974 ss.52, 53(c)(d).
Trade Marks Act 1955 s.62.
HEARING
MELBOURNE
#DATE 5:3:1985
ORDER
All times be abridged as necessary to permit the claim for interlocutory injunctions.
Upon the applicants by their counsel undertaking to pay to any party adversely affected by the injunctions hereby grnted such compensation (if any) as the Court thinks just, until the hearing and determination of the Application herein or until further order, the first, second and third Respondents and each of them whether by themselves, otherwise howsoever be restrained from advertising, displaying or distributing to any person any publication which is a copy of or is in the form of the style guide, a copy of which is annexed to and forms part of the original of this Order.
The costs of and incidental to the Application for interlocutory injunctions be reserved.
Liberty be reserved to any party hereto to apply for such further or other orders and directions as they may be advised.
By consent it is directed:
(i) The application is to proceed by
way of pleadings.
(ii) Any request for further and better
particulars of the statement of claim is to be filed and delivered on or before 12 March 1985.
(iii) A defence and any counter claim is
to be filed and delivered on or before 19 March 1985.
(iv) Further and better particulars of
the statement of claim in response to a request therefore are to be filed and delivered on or before 26 March 1985.
(v) Any request for further and better
particulars of the defence and any counter-claim is to be filed and delivered on or before 26 March 1985.
(vi) Any reply is to be filed and
delivered on or before 26 March 1985.
(vii) Further and better particulars of
the defence and any counter claim in response to a request therefore are to be filed and delivered on or before 2 April 1985.
(viii) Mutual discovery between the
parties is to occur on or before 16 April 1985.
(ix) The directions hearing is
adjourned until 3 May 1985 at 10.30 a.m.
(x) Costs of the directions hearing
are reserved.
JUDGE1
The applicants and the respondents are engaged in the trade of manufacturing, importing, marketing and distributing ladies garments, catering especially for the younger age groups. The event which has led to this case was the discovery by the applicants on 12 February 1985 that the respondents had produced and were in the process of circulating a catalogue of their goods, described as a style guide, in which the word "Jump" figured prominently.
From 1977 onwards the first applicant has carried on business on a large scale in what it described as being in the "young high fashion" category for females between the ages of 18 to 35 years. Since about 1980 the second applicant has been a wholesaler to retailers of the garments which have been manufactured or imported by the first applicant since 1977. A substantial portion of these garments has been marketed under and has borne the name and trade mark "Jump" or "Jump for Solo" ("Jump garments").
Mr Nick Pappas, the sales manager of the applicants deposed as follows:
"The Jump garments have been very successful items of clothing merchandise. This has been due in large part to the superior quality of the garments and the very extensive promotions and advertisements undertaken by the applicants and by retailers to market the Jump garments. Such promotions and advertisements were undertaken under the name "Jump" and "Jump for Solo" through fashion magazines and periodicals such as "Vogue" and "Mode" and in the trade journal for the clothing industry "The Ragtrader". All this advertising carried and always has carried a prominent visual display of the name and trade mark "Jump" and "Jump for Solo". Extensive advertising has also been carried out through other print and visual media which again carried prominent display of the said names and marks.
Further, promotion has been undertaken by printing and distribution of posters and cards upon which the names "Jump" and "Jump for Solo" prominently appeared. All the many lines and varieties of the Jump garments sold or distributed by the applicants themselves bore the label or tag "Jump" or "Jump for Solo".
Since 1980, the gross retail value of sales by the Applicants and their subsidiaries of the Jump garments has amounted to approximately $110 million. During that time approximately 3.54 million garments were sold by the Applicants or their subsidiaries. As deposed to earlier, the applicants have very extensively advertised their Jump garments throughout Australia in almost all the available media. I estimate that since 1977 expenditure on such advertising and promotion has amounted to approximately $100,000.00 per annum. In addition, retailers of the Jump garments have themselves advertised their ability to sell Jump garments.
By reason of the foregoing activities of the Applicants and their retailers throughout the period since 1977, the names and trade marks "Jump" and "Jump for Solo" have become very well and widely and favourably known to the clothing trade and the public and the Applicants have acquired a high and valuable reputation both among the public generally and throughout the trade as being the manufacturers, importers and distributors of the Jump garments and the Applicants have developed a valuable goodwill in relation thereto. The Applicants are concerned to ensure that the reputation, which they have developed since 1977, of being the importers, manufacturers and distributors of the high quality Jump garments and of having the highest financial and commercial integrity is maintained.
On 22nd November, 1976 the trademark "Jump" was registered in Part A of the Register of Trade Marks in respect of goods in class No.25 including articles of clothing for women and girls excluding jump suits, jump uniforms and jump shoes. The said trade mark bore number A285794. The said trade mark was transferred and assigned to the first Applicant on 29th April, 1977 and the said transfer was registered on 5th September, 1978.
On 21st April, 1982, the trade mark "Jump for Solo" was registered in Part A of the Register of Trade Marks in respect of goods in class No.25 particularly female outer wear garments and mens outer wear garments but excluding jump suits, jump uniforms and jump shoes. The said trade mark bore number A 374465.
The second Applicant is a registered user of each of the said marks."
In the Ragtrader of September 1-15, 1977 and May 15-31, 1978 the applicants published display announcements that their "Jump" designs were being registered under the Commonwealth Designs Act and that "any infringement of these Designs will be vigorously prosecuted."
On 12 February 1985 Mr Solomon Lew, the managing director of the applicants, received a copy of the respondents' catalogue in an unmarked envelope. In his affidavit, he said that he then telephoned Mr Marc Cywynski (the third respondent) who was known to him as the managing director of the respondent companies. In his affidavit, he set out the substance of his conversation with Mr Cywynski, as follows:
"SL: "I have just received in the mail the catalogue and am incensed that it had our trade mark "Jump" all over it."
MC: "Do not know what you are talking about and if you could wait I will get a copy from another office."
MC: "Well its also got leap, skip, frolic, sport and dance."
SL: "But it would create confusion in a market place as to the real ownership of "Jump" merchandise and people would think that you would be a distributor, therefore desist from distributing the catalogues".
MC: "Why should I".
SL: "But it would be seen as a passing off".
MC: "I will look into it and call you in the morning".
I say that following a telephone conversation I am informed by my receptionist and verily believe that the said Marc Cywynski telephoned my office at approximately 9.55 am on the 13th day of February, 1985. I was not able to speak to him then and returned his call later that afternoon, the substance of which is as set out hereunder:
MC: "Sol, 75,000 of the catalogues have been printed of which 10,000 have already been distributed. I am prepared to stop the distribution and reprint the catalogue only if you will pay the reprinting costs of $32,211.00."
SL: "You cannot be serious, litigation alone would cost more than $32,211.00 which I am prepared to take as you have encroached on our territory.""
Mr Cywynski agreed that such a conversation took place and set out his version of it in his affidavit, which it is not necessary to reproduce, as counsel have agreed that the two accounts of it are substantially to the same effect.
No doubt prompted by Mr Lew's reference to the litigation which he was prepared to launch, Mr Cywynski then telephoned his patent attorney and his solicitor and sent each of them a copy of the catalogue by courier. There were no further communications between the parties.
On 21 February, upon the usual undertaking by the applicants, I granted an interim injunction on their ex parte application, restraining the respondent, until the hearing and determination of the claim for interlocutory relief or until further order from advertising displaying or distributing to any person any publication which is a copy of or in the form of the style guide complained of and made the claim for interlocutory relief returnable on 26 February. On that and the following day the hearing proceeded.
At an early stage of the hearing of the claim for interlocutory injunctions, the parties were given the opportunity of having the trial of the application fixed for March 4, so as to avoid the possible duplication of costs involved in having two hearings. They were attracted by this prospect and at first considered that it might be possible to be ready for such an early trial but later agreed that it would not be possible.
The applicants relied upon an affidavit by Mr Robert Gagliardi, the head fashion buyer for Venture Stores Retailers Ltd throughout Australia and a former fashion buyer in "the knit wear and T-shirt division" of Myer Melbourne Ltd. During his time with Myer, from 1976 to 1983, it purchased at least 20,000 garments and as many as 50,000 garments each year from the applicant companies. During those years he was very familiar with the names "Jump" and "Jump for Solo" and the merchandise he purchased on behalf of Myer bore those and other labels bearing the word "Jump". He said "the word "Jump" and any other associated label or logo incorporating the word "Jump" connote to me as being the merchandise of the Voyager - Solo group of companies". In the course of his employment with Venture Stores he has continued to purchase merchandise from the applicants.
In Mr Cywynski's affidavit he outlined the nature of the business of the respondent companies and described the look of their range of clothes, which they market under the registered trade mark of "Cherry Lane", as one of individuality and freedom. "Consumers", he said, "are encouraged to have a sense of the clothes being fun to wear, with a special emphasis on vitality and excitement. Cherry Lane's shops are especially designed to complement this image of fun and vitality".
In the year 1983/1984 the respondent companies spent $210,031 on advertising. As has been seen the cost of reprinting the catalogue in question was said to be $32,211.
Mr Cywynski engaged Mr Robert Pearce to design the catalogue, and told him that he wished it to have a more energetic and vital look than before, and to convey energy and youthfulness, but did not suggest what words should be used to convey this concept. Mr Cywynski was overseas when the catalogue was prepared and completed and saw it for the first time, in finished form, when he returned in January 1985. "When I first saw it", he said, "it did not convey to me any association with the clothes of the applicants".
Mr Pearce deposed to his retainer to produce the catalogue and said:
"I was in charge of the photographic session which was conducted for the purpose of creating the catalogue. During the course of that session, the action poses taken by the models led me to use the word "jump" with the exclamation mark as shown on page 1 of that Catalogue. I then went to Roget's Thesaurus and after "jump" inserted the words "leap; skip; frolic; sport; dance." as set out in the Thesaurus. Similarly, on the back of the catalogue, the words following "fashion" appearing at the foot of that page, came from Roget's Thesaurus.
Words such as "for fun]" and "preppy" arose directly out of my response to the photographs of the poses of the models photographed in the catalogue.
The idea was to convey a sense of liveliness and activity, and connect the marketing of "Cherry Lane" clothes with activity and fun. I used the highlighted words in the catalogue solely in order to convey an image which I thought would appeal to "Cherry Lane's" market for the clothes in question, being purchasers of fashion ware principally from the ages of 14 to 24. Neither the said Mark Cywynski nor any other officer of the Respondents had anything to do with the selection of the word "jump" in the catalogue.
While I have done freelance graphic work for six years, until learning of the dispute at issue in this matter on Friday, 22nd February, 1985, I had never heard of clothes marketed under the trade mark "Jump", and had never seen any advertising material showing any kind of clothing marketed by this trade mark. Having not heard of "Jump" as a trading mark, in the preparation of the Autumn/Winter 1985 Cherry Lane brochure I merely understood the word "jump" in the sense of its common usage and sought only to use the word in that sense.
I generally do not look at fashion catalogues or brochures advertising one brand of clothing, but rather keep up with developments in this field by studying fashion and style magazines which tend not to highlight any particular brand. The style used in the Autumn/Winter 1985 Cherry Lane brochure, particularly in the highlighting of certain key words, is in keeping with style which is presently fashionable overseas."
The respondents filed an affidavit by a Warrnambool and Hamilton fashion ware retailer who sells the products of the applicants and the respondents. She is familiar with the brand name "Jump" but had never heard of a "Jump" brand catalogue or brochure. She deposed:
"I am aware of the Autumn/Winter 1985 Cherry Lane brochure, but made no association between the brochure and the "Jump" brand name. To me, the use of the word "Jump" and other words which are highlighted in the brochure merely convey a sense of having fun, such being in keeping with the way in which Cherry Lane markets its clothes and the image which it seeks to convey."
The manager of the modelling agency who selected the models for the catalogue said:
"I am familiar with the brand name "Jump", but have never seen a catalogue of "Jump" clothes. I am aware of the particular logo used by "Jump" and can easily distinguish it from the way in which the word "jump" is used in the Autumn/Winter 1985 "Cherry Lane" brochure.
"Cherry Lane" clothes are far more prominent in the fashion trade (particularly in the young market) than "Jump" clothes. Furthermore, the name "Cherry Lane" is well known in the fashion trade in its own right, and the particular logo used by "Cherry Lane" is well known and widely circulated.
When I saw the Autumn/Winter 1985 "Cherry Lane" brochure I had no difficulty associating the brochure with "Cherry Lane" and it seems to me that the word "Jump" and other words highlighted throughout the brochure do no more than convey a particular feeling about the clothes consistent with the image which I described above."
The operator of a number of clothing stores around Melbourne, which stock "Cherry Lane" clothes but no "Jump" brand clothes, deposed:
"I believe the "Cherry Lane" clothes have a very distinctive look of their own, such that it is possible to identify "Cherry Lane" clothing without looking at a label.
I am aware of the "Jump" brand range of clothing, which I identify more as "Solo" then "Jump". I believe that the "Solo" range is entirely different from the range offered by Cherry Lane. "Solo" or "Jump" is much more conservative and middle of the road, while the "Cherry Lane" name is associated with "quality" and vitality, with an emphasis on junior fashion.
I have never seen any "Jump" advertising and only know that range from the clothes that I have seen. I have seen quite a deal of Cherry Lane's advertising, including the Autumn/Winter 1985 brochure of "Cherry Lane". I made no connection between the Cherry Lane range and the trade mark "Jump" on seeing the brochure, and instead understood the word "jump" as referring to the mood of the clothes. To my way of thinking, the models in the brochure are jumping and the use of the word "Jump" and other catch words in the catalogue were understood by me as having their normal meaning."
Ms Prue Acton is the managing director of one of the leading fashion houses in Australia, which does not sell either "Cherry Lane" or "Jump" brand clothing, although she is familiar with both brands. She said:
"I associate the "Cherry Lane" name with the young fashion market, being simple, colourful, lively and sporty clothing. I would describe "Jump" clothes as trendy, although I would associate the "Cherry Lane" name with a more young and sporty look.
I have seen the Autumn/Winter 1985 Cherry Lane catalogue and was in no doubt that the catalogue was presenting the "Cherry Lane" brand only."
The applicants allege that the respondent companies, in trade or commerce, have engaged in conduct that is misleading or deceptive, or is likely to mislead or deceive, in breach of s.52 of the Trade Practices Act 1974 ("the Act"), and that, in connexion with the supply or possible supply of goods or in connexion with the promotion by any means of the supply of goods, they have represented that goods have sponsorship or approval that they do not have, and have represented that the respondent companies have a sponsorship or approval they do not have, in breach of s.53(c) and (d) of the Act.
As I said in R & C v Abundant Earth 55 ALR 38 at 46:
"It is clear that the question whether particular conduct of which complaint is made is misleading or deceptive or likely to mislead or deceive is a question of fact to be answered objectively by the court in the context of the evidence as to the alleged conduct and as to relevant surrounding facts and circumstances. The conduct of the respondent must be looked at as a whole. It is necessary to identify the relevant section of the public by reference to which the challenged conduct falls to be tested. To fall within the section the challenged conduct must be misleading or deceptive to "a significant section of the relevant public" or likely to mislead or deceive such a section: see Snoid v Handley (1981) 54 FLR 202 at 209; 38 ALR 383 at 390.
Evidence of members of the relevant public that they have been misled is admissible but is not essential. Ultimately the question is one for the court to determine objectively. As was said by Lord Morris in Parker-Knoll Ltd v. Knoll International Ltd (1962) RPC 265 at 279: "In arriving at a decision the court must not surrender in favour of any witness its own independent judgment.""
The first question which arises upon a claim for an interlocutory injunction is whether the applicants have shown that there is a serious question to be tried (see Epitoma, (1984), 54 A.L.R. 730 at 734 and Bullock, 11 February 1985, both being judgments of Full Courts of this court).
The catalogue bore on the top of its front cover the name "Cherry Lane" in bold type and again at the foot in less prominent stylised type. The cover carried a picture of a young couple in a state of affectionate repose and below them in large black type on a white background the word "Jump]", followed in very much smaller type by the words "leap; skip; frolic; sport; dance."
The word "Jump" in large coloured type appeared on pages 4, 7, 8, 11, 15, 16, 19. On p.23 in smaller type there was the sentence "Jump for 25 Fantastic Cherry Lane Colours" and on the back cover, which was p.24, again in large coloured type, "Jump to it".
One needs to examine this 1985 catalogue in conjunction with the earlier promotional material of the applicants which has been tendered, which naturally emphasises the connection between the word "Jump" and their goods, bearing in mind that all the parties are seeking to make sales to that section of the public which may be persuaded to buy garments suitable for wear by younger females.
The answer to the question whether the applicants have shown that there is a serious question to be tried as to whether the respondent companies have breached s.52 of the Act turns largely upon the impression made upon the mind of the reader by a study of the catalogue and the promotional material of the applicants and their marketing for a number of years of their goods under the name "Jump".
Approaching this question without the benefit of authority, it would be my opinion that the prominent use of the word "Jump" in the catalogue in association with the garments of the respondent companies justifies the conclusion that the applicants have shown that there is such a serious question to be tried, in respect of the applicants' claim under s.52 of the Act that the respondents have engaged in conduct that is misleading or deceptive, or is likely to mislead or deceive, being the publication and circulation of the catalogue.
Similarly, I am of opinion that there is a serious question to be tried in respect of the claim under s.53(c) and (d) as to whether the respondents have represented that they or their goods have a sponsorship or approval, namely by or on behalf of the applicants, that they do not have.
It is clear that both respondent companies are trading corporations within the meaning of the Act and that it is appropriate that any injunction granted against them should also bind Mr Cywynski, the third respondent.
Counsel for the respondents relied upon the oft-quoted passage from the judgment of Stephen J in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216, in which his Honour said (at 229)-
"There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor's trade name will render the latter immune from action (Office Cleaning Services Ltd. v. Westminster Window and General Cleaners Ltd. (36), per Lord Simonds). As his Lordship said (37), the possibility of blunders by members of the public will always be present when names consist of descriptive words-"So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be." The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe."
Counsel first submitted that the word "Jump" was a descriptive word and should be considered in the light of this passage from his Honour's judgment, but he encountered some difficulty in showing how the ordinary meaning of the word could be descriptive of the garments here in question.
In later written submissions, counsel preferred to argue that the word is one in common use with an accepted meaning, namely, to spring off the ground. In its primary meaning there is no property in the word. As the applicants used the word as a brand name for their goods it may be assumed that they "thereby gave that word a secondary meaning". The applicants, it was said, had no right to prevent the respondents from using "jump" in the primary sense, but the latter could not use that word in its secondary sense. The sense in which the word is used depends upon the context and it was contended that in the catalogue the word is used "in its primary sense to describe an activity which is part of the environment sought to be attributed to Cherry Lane clothes. In that sense it could be said that the word is descriptive. It cannot be monopolised, just as the applicant in Hornsby could not monopolise the descriptive term which it used to describe its business".
It is not appropriate on a motion for an interlocutory injunction, where an undertaking to pay damages is proffered, "to decide difficult questions of law which call for detailed argument and mature considerations" (see Cyanamid 1975 AC 396 at 407).
If one were, simply for the purposes of argument, to assume that the written submissions of the respondents were soundly based in law, there would remain a serious question to be tried whether, when the catalogue is considered objectively, the word "Jump" should be regarded as having been used in it in its primary sense.
Without prejudice to their primary submissions, counsel for the respondent undertook to reprint the catalogue without the word "Jump]" on the cover before distributing any further copies of it. In my opinion, while this alteration would strengthen the respondents' case, there would remain a serious question to be tried in relation to the catalogue as so amended.
Mr Cywynski deposed to the commercial consequences to the respondents of interruption to the mailing of the catalogue (see paragraphs 9-11 of his affidavit) and the applicants have pointed out the threat which they consider that its mailing represents to their business and to the present and future value to them of the name "Jump".
There is no question of the financial strength of the applicants and of the value of the undertaking which they have proffered. If the circulation of the catalogue were allowed to continue, and the serious question to be tried were decided at the trial in favour of the applicants, it would be very difficult to assess damages in respect of the losses suffered by the applicants in their business and in respect of the investment they have made in the use of the name "Jump". The balance of convenience seems to me to favour the continuance of the injunction until the hearing and determination of the application, or until further order.
The applicants claim that there is a serious question to be tried as to whether the respondents have passed off their clothing as and for clothing manufactured, supplied and marketed by or connected or associated with the applicants and also as to whether the respondent companies, without the licence or authority of the applicants have used their trade marks in the course of trade in connection with the marketing supply and sale of the clothing in question.
There is much common ground between these claims and those made under the Act and in my opinion there is a serious question to be tried as to each of them.
Section 62 of the Trade Marks Act 1955 provides that a registered trade mark is infringed by a person, not being the registered proprietor or a registered user, who uses a mark which is substantially identical with or deceptively similar to the trade mark, in relation to goods in respect of which it is registered.
Under s.6, "mark" includes, amongst other things, a device, brand, heading, name, word or any combination thereof.
It seems to me that there is a serious question to be tried as to whether, the respondent companies have used a mark in the form of the word "Jump" which is substantially identical with or deceptively similar to the registered trade mark, in a way which amounts to a breach of s.62.
The orders of the Court are that:
1. All times be abridged as necessary to permit the hearing of the claim for interlocutory injunctions.
2. Upon the applicants by their counsel undertaking to pay to any party adversely affected by the injunctions hereby granted such compensation (if any) as the Court thinks just, until the hearing and determination of the Application herein or until further order, the first, second and third Respondents and each of them whether by themselves, their servants or agents, or any of them or otherwise howsoever be restrained from advertising, displaying or distributing to any person any publication which is a copy of or is in the form of the style guide, a copy of which is annexed to and forms part of the original of this Order.
3. The costs of and incidental to the Application for interlocutory injunctions be reserved.
4. Liberty be reserved to any party hereto to apply for such further or other orders and directions as they may be advised.
5. By consent it is directed:
(i) The application is to proceed by way of pleadings.
(ii) Any request for further and better particulars of the statement of claim is to be filed and delivered on or before 12 March 1985.
(iii) A defence and any counter claim is to be filed and delivered on or before 19 March 1985.
(iv) Further and better particulars of the statement of claim in response to a request therefore are to be filed and delivered on or before 26 March 1985.
(v) Any request for further and better particulars of the defence and any counter-claim is to be filed and delivered on or before 26 March 1985.
(vi) Any reply is to be filed and delivered on or before 26 March 1985.
(vii) Further and better particulars of the defence and any counter claim in response to a request therefore are to be filed and delivered on or before 2 April 1985.
(viii) Mutual discovery between the parties is to occur on or before 16 april 1985.
(ix) The directions hearing is adjourned until 3 may 1985 at 10.30 a.m.
(x) Costs of the directions hearing are reserved.
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