W.D. & H.O. Wills (Australia) Ltd v Philip Morris Ltd

[1997] FCA 1116

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 391  of   1997

GENERAL DIVISION

BETWEEN:	W.D. & H.O. WILLS (AUSTRALIA) LIMITED APPLICANT
AND:	PHILIP MORRIS LIMITED RESPONDENT
CORAM:	DAVIES J
DATE OF ORDER:	27 OCTOBER 1997
WHERE MADE:	SYDNEY

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The respondent, Philip Morris Ltd, be restrained from selling, offering for sale, advertising or promoting in Australia, any cigarettes in packaging which is the same or substantially the same as the packaging for the respondent's cigarettes as in Exhibit B in these proceedings.

1. The applicant, W.D. & H.O. Wills (Australia) Ltd, provide any particulars of damage to the respondent by 24 November 1997.

1. The respondent pay the Applicant's costs of these proceedings.

1. The proceedings be stood over until 27 November 1997 at 9:30 a.m.

Note:              Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NO NG 391 of 1997

GENERAL DIVISION

BETWEEN:	W.D. & H.O. WILLS (AUSTRALIA) LIMITED APPLICANT
AND:	PHILIP MORRIS LIMITED RESPONDENT

CORAM:	DAVIES J
DATE:	27 OCTOBER 1997
PLACE:	SYDNEY

FURTHER REASONS FOR JUDGMENT

In this matter I handed down reasons for judgment on 9 October 1997.  On 16 October 1997, counsel moved the Court for the orders which they sought.  At that hearing, counsel for Philip Morris Limited (“Philip Morris”) sought an express ruling as to the Summit packets containing cigarettes containing 2 mg or less of tar and those containing 4 mg or less of tar.

These packets are similar in colour to the two previous Horizon packets containing the cigarettes with a two low content of tar.  However the 2 mg and the 4 mg Summit packets have a colour distinctly different from the new Horizon packets, which have adopted a uniform colour similar to that of the former 8 mg colour.

During the course of the hearing two witnesses said that there would not be confusion as between the Summit 2 mg and 4 mg packets and the current Horizon packets.  Mr K.P. Clancy, the marketing training manager of WD & HO Wills (Australia) Limited (“Wills”) gave this evidence in cross-examination:-

"Let me put it to you this way, Mr Clancy, I am about the distance from you that a consumer would be when seeing cigarettes in a tobacconist or in a supermarket kiosk, am I not?---Yes.

A distance of a metre and a half or so.  It is clear to you, is it not, that comparing the Horizon tar variant with its Summit equivalent above it, for example in relation to the Ultimate Summit and the 2 milligram Horizon variant that they are distinctly different packs?---Those two, yes."

Dr  G.R. Beaton, a marketing expert called on behalf of Wills, gave this evidence:

“Just looking at the relevant packs, if I could come to a distance of about one and a half metres from you which would be about the distance that a consumer would be away from the packs at the time, do you agree that the two milligram tar variants;  the one at the right hand side of the range and its Horizon counterpart are distinctly different in appearance - - -?---The blues are certainly different, yes.

And that there is no prospect of confusion to consumers between those two packs?---There’s little:  I agree with that.”

However that line of questioning went to the issue as to whether there would be deception because a customer would mistake a Summit packet for an Horizon packet.  It was not on that basis on which relief was sought or on which I considered that relief should be granted.

In my reasons for judgment I expressed the view that “a significant number of customers might think that the cigarettes came from the same source as Horizon cigarettes.”  That conclusion follows equally with respect to the 2 mg and 4 mg variants of the Summit cigarettes for they are similar in appearance to the 2 mg and 4 mg variants of the Horizon cigarettes which were on the market for many years.  Moreover, Horizon’s old packs will not be exhausted for several months as stock is still held by retailers and by Wills.  The advertising proposed would also add to the deception for it was proposed to feature the bird hologram with clouds on a blue background.  If the 2 mg and 4 mg Summit packets were marketed in the manner proposed, the course of conduct would be likely to mislead or deceive customers into thinking that the source of the cigarettes was the same as that of Horizon cigarettes.

Accordingly, in relation to all the cigarettes the subject of the proceedings, an injunction should issue.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies

Associate:

Dated: 27 October 1997        

Counsel for the applicant:  D.K. Catterns QC

with S.J. Goddard

Solicitors for the applicant:  Mallesons Stephen Jaques

Counsel for the respondent:  R.M. Garratt QC  
  with M.R.J. Ellicott, P. Gray & W. Harris

Solicitors for the respondent:  Arthur Robinson & Hedderwicks                

Dates of hearing:  11-15 August 1997

Place of hearing:  Sydney

Date of  further reasons:  27 October 1997