Cat Media Pty Limited v Opti-Healthcare Pty Limited

Federal Court of Australia|2003-03-04|Before: Branson J

introduction 1 The market in Australia for products claimed to assist weight loss is apparently both large and competitive. Each of the applicant and the respondent sells to the public and to retail outlets a product in tablet form which is asserted to assist weight loss. The products are sold 'over‑the‑counter' and not by prescription. The applicant's product is called 'Fat Blaster' and the respondent's product is called 'Fat Terminator'. 2 Fat Blaster has been available to the public in Australia since November 2000. It has proved to be a very successful product. Fat Blaster has become the largest selling 'weight loss supplement' sold in Australia. Fat Terminator has only been available to the public in Australia since August 2002. This proceeding was instituted on 13 September 2002. 3 The applicant claims that the respondent has sought to take advantage of the reputation of Fat Blaster to increase the sales of its product, Fat Terminator. In particular the applicant claims that the respondent has engaged in conduct in contravention of ss 52 and 53(c), (d) and (eb) of the Trade Practices Act 1974 (Cth) ('the TPA') in that it has sold Fat Terminator in packaging which is likely to mislead consumers into concluding that Fat Terminator is the applicant's product or is in some way associated with the applicant or with Fat Blaster. The applicant further claims that the respondent has passed off its Fat Terminator product as being the product of the applicant or as being associated with the applicant or Fat Blaster. The respondent denies the applicant's claims. 4 For the reasons set out below, I have concluded that the respondent has engaged in conduct that was misleading or deceptive and that it has passed‑off Fat Terminator as being a product of the applicant or as being associated with the applicant or Fat Blaster. 5 I stress that this decision is in no way concerned with the accuracy of the claims made by each party with respect to its product or with the respective merits of the two products.

statutory provisions 6 Each of ss 52 and 53 of Part V of the TPA is concerned with consumer protection. 7 Section 52 of the TPA provides: '52(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).' 8 Section 53 relevantly provides: '53. A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services: … (c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have; (d) represent that the corporation has a sponsorship, approval or affiliation it does not have; … (eb) make a false or misleading representation concerning the place of origin of goods; …'

facts 9 Ms Sonia Amoroso ('Ms Amoroso') was one of the founders of the applicant and she has been the applicant's managing director since the company was formed in March 1997. She was closely involved in the development and launch of the product which became Fat Blaster. 10 I accept the evidence of Ms Amoroso, which is supported by the product samples received in evidence, that prior to the launch of Fat Blaster, 'weight loss supplements' were primarily marketed by reference to the distributor's major brand. The respondent's weight loss supplement product at the time was called 'Optislim 2000'. 11 I further accept the evidence of Ms Amoroso, which is also supported by the product samples received in evidence, that prior to the launch of Fat Blaster the majority of weight loss and appetite suppressant products sold by companies other than the applicant comprised capsules sold in bottle‑like containers. In late 1999 the applicant, however, sold a product called 'Proslim' which was sold in a carton containing fifty 'blister' packed capsules. Ms Amoroso had determined that the applicant's product should be sold in cartons containing blister packs as she believed that this form of packaging gave the products the 'look and feel' of medicinal products. I note that the product 'Cellasene', which is referred to in [21] below, was also sold in 'blister' packs. There is some controversy about the proper characterisation of Cellasene. Ms Amoroso described it as a cosmetic product that purports to reduce cellulite. I note that the Cellasene box in evidence carries the statement 'This product is not recommended for weight loss'. The respondent's witnesses, however, regarded Cellasene as a weight loss product. It is not necessary for a finding to be made as to the proper characterisation of Cellasene. 12 I also accept the evidence of Ms Amoroso that she was aware of the Gerber baby food 'branding', which includes a prominent image of a baby's face, and that she wanted the applicant's products, including Fat Blaster, to rely heavily on a photographic image 'that would define the product and show its results'. I accept that Ms Amoroso was not aware of another over‑the‑counter weight loss supplement product that utilised a photographic image in that way as part of its packaging and 'branding'. I find that, although it appears likely that some 'health' products, including vitamin tablets and weight loss supplements, were packaged in late 2000 in a way which gave prominence to photographs of the human figure, or part of it, no weight loss product of significance in the marketplace was so packaged at that time. A possible exception is the product 'Natural Nutrit Chromaslim' which, I accept, accounted for approximately 4.4% of the market by dollar value of weight loss supplements sold in Australian pharmacies as at 10 September 2000. The photograph of Natural Nutrit Chromaslim packaging which is in evidence shows a photographic image of a woman in a one piece swim suit wearing a sun visor and a man wearing knee-length white shorts with what appears to be a white towel draped over one shoulder and covering much of his chest. The photographic image covers all but the left hand third of a box which is higher than it is wide - i.e. it has a 'portrait', as opposed to 'landscape', format. The general impression created by the image is quite different from that created by the photographic image on the Fat Blaster packaging which is discussed below. The evidence does not establish when the Natural Nutrit Chromaslim packaging which is shown in the photograph was adopted. 13 Fat Blaster is sold for $39.95 in a cardboard box:

(a) with dimensions of 120mm x 75mm x 55mm; (b) which is designed to lie horizontally on a shelf so as to display one of the 120mm x 75mm sides as the front or face of the box; (c) which shows on its face, covering most of the right half of the face of the box, a neck-to-knee image of a male and female model ('the models') each of whom is apparently young, slim, fit and Caucasian: (i) standing close together; (ii) with the woman nearer the centre of the box; (iii) with the woman wearing a bikini and the man tight shorts only (i.e. a lot of flesh is displayed); and (iv) the female figure is posed so as to face the photographer and the male figure turns slightly towards the female figure; (d) which has the background colour of white with additional colours being principally red, black and the skin tone of the models; (e) the name of the product appears prominently on the bottom left side of the face of the box; and (f) the name of the product appears also on the left side of the top of the box behind a red stripe which colours the full width of the top section and slightly more than a third of its depth.

I am satisfied that the Fat Blaster packaging was highly distinctive in the weight loss supplement market when the product was launched in November 2000.

14 In about November 2001 the applicant launched a second Fat Blaster product known as 'Fat Blaster Max'. Fat Blaster Max is promoted as an advanced formulation of Fat Blaster. Fat Blaster Max is now the second highest selling weight loss supplement product in Australia, the highest being Fat Blaster. 15 The applicant has spent in excess of $1.5 million in advertising and promoting Fat Blaster. Between July 2001 and December 2001 Fat Blaster was advertised regularly in a number of Australian mass circulation magazines and newspapers including Cosmopolitan, Woman's Day, Women's Weekly, Sunday Telegraph, Brisbane Sunday Mail, Melbourne Sunday Mail, Adelaide Sunday Mail, Perth Sunday Times, Tasmanian Advocate and the Sunday Tasmanian. During the same period Fat Blaster was advertised regularly on the Network 10 program Good Morning Australia which is hosted by Bert Newton and broadcast nationally. Between January 2002 and July 2002 Fat Blaster continued to be advertised in mass circulation Australian magazines and Sunday newspapers, in some other newspapers, on the Good Morning Australia program and on some public outdoor display boards. In September and October 2002 Fat Blaster was advertised on a number of Australian television channels including Network 10, Channel 9, WIN and Channel 7. 16 Notwithstanding certain denials in its defence, the respondent ultimately conceded that the applicant has extensively marketed, advertised and promoted the applicant's Fat Blaster product in Australia by reference to the names Fat Blaster and Fat Blaster Max and by reference to the Fat Blaster packaging. The respondent further concedes that the names Fat Blaster and Fat Blaster Max, and the Fat Blaster packaging, are well known to:

(a) consumers who have been induced to purchase Fat Blaster or Fat Blaster Max by the applicant's print media advertisements or television 'advertorials' (including first‑time purchasers); and (b) by stockists of Fat Blaster and Fat Blaster Max.

17 I am satisfied that the applicant has acquired a substantial goodwill and reputation in the name Fat Blaster and in the Fat Blaster get‑up in connection with the distribution, sale and offering for sale of weight loss supplement products in Australia. As a consequence I am satisfied, as the respondent concedes, that the distribution, advertising, promotion, offering for sale and sale in Australia of weight loss supplement products by the names Fat Blaster and Fat Blaster Max, and by the Fat Blaster packaging, would signify to persons who had read or seen the applicant's advertising of Fat Blaster, that such products were made by the applicant and are sold by the applicant or with its approval. 18 The marketing of Fat Blaster does not emphasise the benefits of diet and exercise. Although Ms Amoroso did not accept the accuracy of the description, Fat Blaster is, I find, regarded in the relevant industry as a 'Magic Bullet' product. In late 2000 the respondent did not distribute a Magic Bullet weight loss product. 19 In late 2000 (i.e. immediately prior to the launch of Fat Blaster) the respondent's product Optislim 2000 was the most successful over‑the‑counter weight loss product in Australia. It was marketed as a product to be used as part of a dietary and exercise regime for the loss of weight. The product was sold with a diet plan which was placed inside the bottle. 20 Optislim 2000 was in late 2000, and continues to be, sold for $49.95 in a white bottle‑like container with a wrap-around label that virtually covers the body of the container. The colour scheme of the label is yellow, red, white and black with yellow covering the largest proportion of the label. The label does not include any photographic image. It gives prominence to what was described in evidence as 'the stylised image of a man and a woman, which is now known as the "squiggle logo"'. The advertisements of Optislim 2000 also tend to use the colours yellow, red, white and black and to highlight the squiggle logo. 21 The history of the development and launch of Fat Terminator is as follows. In mid 1999 the respondent had decided to produce a Magic Bullet product to compete with a then successful Magic Bullet product known as Cellasene. The proposed name for the new product was 'Optislim 3000 - Premium Gold'. Cellasene did not maintain its initial popularity and the respondent concluded that the time was not right for it to launch a Magic Bullet product. 22 In February 2001 the respondent engaged an advertising and design business, Inhouse Advertising and Design Pty Ltd, now called Inhouse MAD Pty Ltd ('Inhouse') to manage its advertising. John Francis Rathgeber ('Mr Rathgeber'), the sole director and secretary of Inhouse, arranged for a strategic planning session to be held with a strategic analyst. Recommendations which Peter Vanas ('Mr Vanas'), a director of the respondent, understood to have been identified as a result of this strategic planning session included that:

(a) the Optislim name should be developed as a brand name to build brand name awareness and identity and to trade off the considerable reputation built up by Optislim 2000; (b) The colours of the Optislim 2000 design should be promoted as the 'corporate colours' of Optislim in its advertising; and (c) To avoid letting the respondent's advertising benefit anyone other than the respondent, new advertising should be more original and distinctive.

23 Mr Vanas' evidence was that, with the benefit of the services of Inhouse, the summer 2001/2002 was a very successful period for Optislim 2000. Nonetheless it was apparent to him that Fat Blaster was achieving sales far in excess of Optislim 2000. In February 2002 the respondent concluded that the time was right for it to introduce the envisaged Optislim 3000 ‑ Premium Gold product to the market. 24 Inhouse was engaged to design the packaging for the respondent's new product. Stephen Anthony Lucius ('Mr Lucius'), the Senior Creative Director of Inhouse, undertook the design work for the new product. His evidence, which in this regard I accept, was that he was told that the product would be a 'unisex' product and would be sold in a horizontal or landscape box the colour scheme for which should be the red, white, yellow and black colours of Optislim 2000. 25 The evidence as to the design process for the Fat Terminator box is unsatisfactory in its lack of detail. Mr Vanas gave evidence that the first package design for the product which was ultimately called Fat Terminator which he saw was, apart from the name change, essentially the same as the actual Fat Terminator packaging. Consequently, Mr Vanas' evidence did little to elucidate the design process which led to the adoption of the Fat Terminator packaging. In my view Mr Vanas sought by his evidence to understate his involvement in the design process. The evidence as a whole, including the limited contemporaneous material touching on the design process, suggests that Mr Vanas was, as one would expect, quite closely involved in the design of the Fat Terminator packaging. I so find. 26 Mr Rathgeber gave evidence that he arranged for Mr Lucius to start preparing a design for the packaging for the product which became Fat Terminator and that he discussed the evolving designs with Mr Lucius and 'workshopped' some of the later design with Mr Vanas and other representatives of the respondent. I accept this aspect of Mr Rathgeber's evidence. Nonetheless Mr Rathgeber's recollection of the design process was poor. He was unable to identify certain of the draft packaging which Mr Lucius acknowledged, accurately as I find, to have been part of his design process. 27 I found Mr Rathgeber's evidence concerning the design of the Fat Terminator packaging unsatisfactory. The unsatisfactory nature of his evidence may, in part, be a reflection of his limited role in the design process, but I was left with the impression that Mr Rathgeber was not entirely frank with the Court. I conclude that he wished by his evidence to minimise the involvement of Mr Vanas in the design process. I found his refusal to acknowledge the similar connotations of the words 'Terminator' and 'Blaster' troubling, especially in view of his agreement that the word 'Terminator' evokes references to the character played by the actor Arnold Schwarzenegger in the violent action movies Terminator and Terminator 2. Equally curious, to my mind, was Mr Rathgeber's refusal to accept that he regarded 'Fat Blaster' as a 'punchy' name even though his evidence was that he advised the respondent to abandon the name 'Optislim 3000 Fat Burning Formula' because it lacked punch having regard to the fact that the proposed product would be competing in a market dominated by 'Fat Blaster'. He agreed that 'Fat Terminator' was a 'punchy' name. I attribute limited weight to Mr Rathgeber's evidence, especially where it is contradicted by the evidence of others or is inherently implausible. 28 Mr Lucius in his evidence identified some of the draft designs for the product which was ultimately called Fat Terminator, but indicated that not all of the draft designs were available to be placed in evidence. I accept that this may be, as he said, because much of his work was done on a computer so that new images overrode previous designs. However, as a result, I am left with an incomplete understanding of how the design, which I accept was originally based on key elements of the Optislim 2000 packaging, came to adopt its final form. The final form of the Fat Terminator packaging shares very few features of the Optislim 2000 packaging but many features of the Fat Blaster packaging. 29 Mr Lucius denied that during the design process for the Fat Terminator packaging he referred to the packaging of Fat Blaster. However, I find, as indeed he acknowledged, that early in the design process he saw the packaging of the products with which Fat Terminator was intended to compete. Fat Blaster was clearly identified by Mr Lucius' client, the respondent, as the principal competitor of the products that became Fat Terminator and I am satisfied that Mr Lucius saw the Fat Blaster packaging early in the design process. 30 Mr Lucius asserted that he did not have a Fat Blaster advertisement in his 'possession' and that he did not 'review' a Fat Blaster advertisement as part of his design process. I accept that this evidence may have been accurate in a technical sense, but I am satisfied from Mr Rathgeber's evidence and from Mr Rathgeber's reference to a Fat Blaster advertisement in an e‑mail sent by him to Mr Lucius, that an advertisement for Fat Blaster was held in the offices of Inhouse during the design of the Fat Terminator packaging. 31 The e-mail sent by Mr Rathgeber to Mr Lucius is, in my view, of significance. It includes a heading 'Optislim 3000 Advertisement (New design)'. Beneath this heading appear the words 'New advert to hit the Magic Bullet market'. The e-mail goes on to indicate, under the sub-heading 'Background', that the market is 'Currently dominated by Fat Blaster'. The e-mail contains, amongst other directions, the direction: '▪ Refer the Fat Blaster news print advert; ▪ Use the same language - "Join the hundreds of thousands of people in Australia loosing [sic] weight with this…".' 32 I attach importance to this e-mail in two regards. First, it establishes that Mr Rathgeber was willing to direct Mr Lucius to copy aspects of a Fat Blaster advertisement. Secondly, since the advertisement which Mr Lucius was to design was for a new product (i.e. for a product which could not have been used by hundreds of thousands of people in Australia) the direction was calculated to lead to the design of an advertisement likely to evoke memories of Fat Blaster or its advertisements or its packaging. Mr Rathgeber gave evidence that it was part of his object in the development of the design for the packaging of the product which became known as Fat Terminator 'to produce a unique and distinctive product in terms of presentation for the market'. Although the e-mail was concerned with the design of an advertisement, rather than with the design of packaging, the content of the e‑mail sit uncomfortably with this aspect of Mr Rathgeber's evidence. I do not accept his evidence in this regard. 33 I am satisfied that, either directly or indirectly via the instructions given to Mr Lucius, the final design of the Fat Terminator packaging was influenced by, and intended to be open to be confused with, the Fat Blaster packaging. Two factors, which are independent of the many points of similarity in the packaging of the two products and of the matters discussed in [32] above, contribute to my satisfaction in this regard. The first is the minimal use of the colour yellow on the face of the Fat Terminator box. Although yellow is ordinarily used prominently in the respondent's product packaging, and is acknowledged by the respondent to be one of its corporate colours, a casual observer could overlook the short, fine, broken yellow line on the face of the Fat Terminator box. The second factor is the limited emphasis on the face of the Fat Terminator box of the Optislim name. Although the name appears on the front of the box it is in small print and is not accompanied by the 'squiggle logo'. Each of these factors would seem to be contraindicated by the advice given to the respondent which is mentioned in [22] above. 34 I am satisfied that it was Mr Vanas who directed that the packaging for the product which became Fat Terminator should be in a box with dimensions which were in fact the dimensions of the Fat Blaster box. It was, I find, Mr Vanas' intention that the design of the Fat Terminator packaging should be such that the box would lie horizontally on the shelves of retail outlets so as to display prominently the face of the box. In these regards I am satisfied that Mr Vanas intended the Fat Terminator packaging to be the same as the Fat Blaster packaging and that he believed that this would assist the respondent's product to compete with the applicant's product. I am further satisfied that in approving the final design of the Fat Terminator packaging, Mr Vanas was influenced by its similarity to the Fat Blaster packaging. 35 Fat Terminator, like Fat Blaster, was placed on the market with a price of $39.95 per box. The Fat Terminator box shares with the Fat Blaster box each of the features identified in [13] above other than (c) (iii). In the photograph reproduced on the Fat Terminator box the young couple appears to be wearing gym, rather than beach, clothing and they are both holding tape measures around their waists. Nonetheless, the women's abdomen and the man's chest are uncovered in both photographic images (i.e. a lot of flesh is displayed). Another feature of difference between the two photographic images is that the photograph reproduced on the Fat Terminator box is more severely cropped than that reproduced on the Fat Blaster box. The difference is more noticeable at the bottom of the image than the top with the Fat Terminator image terminating at approximately hip, rather than knee, level. Nonetheless, the overall impression created by the two photographic images is not dissimilar. 36 In my view, the Fat Terminator box does not present as unique and distinctive. It presents, in my judgment, as having many similarities with the Fat Blaster box and as sharing few features with the packaging of other products of the respondent or, as the photographs received in evidence of pharmacy shelves reveal, other products competing in the same market.

the applicant's claims 37 The applicant by its statement of claim alleges that the respondent has engaged in conduct in contravention of ss 52 and 53(c), (d) and (eb) of the TPA and has sought to pass off Fat Terminator as being a product of the applicant or as being associated with the applicant or Fat Blaster or as having the licence, sponsorship or approval of the applicant. The applicant further alleges by its statement of claim that the respondent has passed itself off as being associated with the applicant or having the licence, sponsorship or approval of the applicant. 38 No submissions were advanced by the applicant in support of the allegation that the respondent has engaged in conduct in contravention of s 53(eb) of the TPA. This paragraph has previously been thought to be concerned with the geographic origin of goods (see, for example, QDSV Holdings Pty Ltd v Trade Practices Commission (1995) 59 FCR 301; Trade Practices Commission v Pacific Dunlop Ltd (1994) ATPR 41-307; Siddons Pty Ltd v Stanley Works Pty Ltd (1991) 29 FCR 14). The applicant has not made out its claims so far as they are based on s 53(eb) of the TPA. 39 Similarly no submissions were advanced by the applicant in support of the allegation that the respondent has engaged in conduct in contravention of s 53(d) of the TPA. The case of the applicant was that the respondent had sought to link its product with the applicant or the applicant's product, Fat Blaster, rather than that the respondent had sought to link itself with the applicant. The applicant has not made out its claims so far as they are based on s 53(d) of the TPA. 40 I do not understand the applicant to have advanced submissions in support of the allegation that the respondent has engaged in conduct in contravention of s 53(c) of the TPA. The applicant contended that significant numbers of consumers 'are likely to be misled into believing that the respondent's Fat Terminator product, in its current get-up, is the Fat Blaster brand or comes from the same source as Fat Blaster'. However, deception as to the identity of a product or its source is not the same as deception as to the existence of a sponsorship or approval. The evidence is insufficient, in my view, to make out a case based on s 53(c) of the TPA. The applicant's claims so far as they are based on s 53(c) of the TPA fail. 41 It remains for consideration to be given to s 52 of the TPA and the tort of passing off. These two causes of action may conveniently be considered together. Section 52 of the TPA is aimed at conduct likely to be harmful to consumers. However, its 'clear and quite general words' are not to be given an unnaturally confined meaning because of the heading of Part V of the TPA (Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 225 ('Hornsby') per Stephen J, with whom Jacobs J, and in this regard Murphy J, agreed). The tort of passing off, on the other hand, is concerned to protect a trader's goodwill in its business. Nonetheless, as Stephen J pointed out in Hornsby at 226: '… a consequence of the very direct relationship which necessarily exists between the deception of consumers in the course of trade and the injury caused by the unfair practices of a trade rival [is that] [l]egislation which aims at the prevention of the former will, at the same time, tend to put an end to the latter.' 42 In Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 355 Gummow J observed that '[a]ttempts to produce a definition of the tort [of passing off] which is both succinct and comprehensive have had mixed success'. However, in this case, which is not suggested to raise any novel or complex question of law, the elements of the tort may be regarded as those identified by Lord Oliver in Reckitt & Colman Products Ltd v Borden Inc (1990) 17 IPR 1 at 7. These elements were described by the Full Federal Court in Vieright Pty Ltd v Myer Stores Ltd (1995) 31 IPR 361 in the following way at 369: '(1) that the trader's get-up, including any brand name, is recognised by the public as distinctive specifically of the plaintiff's goods; (2) that there has been a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods offered by the defendant are the plaintiff's goods (whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods is immaterial, provided they are identified with a particular source, e.g. by means of a brand name which is in fact the plaintiff's); (3) that the plaintiff suffers or, in a quia timet action is likely to suffer, damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods is the same as the source of those offered by the plaintiff.' 43 I understand the respondent to have conceded the first of the above elements. Lest my understanding be wrong, I record that, in my view, the evidence that the Fat Blaster get‑up is recognised by a significant segment of the public as distinctive of the applicant's Fat Blaster product is strong. Having regard to the nature and extent of the advertising of Fat Blaster, I am satisfied that the name Fat Blaster and the Fat Blaster packaging is recognised not only by those who have already purchased the product, whether as consumers or stockists, but also by others who have an interest in weight loss products. As is mentioned in [17] above, I am satisfied that the applicant has acquired a substantial goodwill and reputation in the name Fat Blaster and in the Fat Blaster get‑up in connection with the distribution, sale and offering for sale of weight loss supplement products in Australia. 44 I turn to consider the second element of the tort, namely, in the context of this case, whether there has been a misrepresentation by the respondent to the public leading or likely to lead the public to believe that Fat Terminator is the product Fat Blaster or alternatively that Fat Terminator comes from the same source as Fat Blaster. 45 I have referred above to the major features shared by the Fat Blaster packaging and the Fat Terminator packaging. There are other less prominent features which they share. Examples are the notation that the box holds 60 tablets and the description of the product on the back of the box. The opening words of the Fat Blaster description on the back of the box are 'A breakthrough in weightloss, this potent formula contains a synergistic blend of herbs and nutrients that give excellent support to your diet and exercise plan'. The opening words of the Fat Terminator description on the back of the box are 'A major breakthrough in weightloss, this formula contains 37 of the most potent ingredients ever formulated for weight control'. 46 Fat Terminator was placed on the market at the same price as Fat Blaster with the consequence that price could not operate as a factor which would alert a purchaser to confusion between the two products. Nor, as is mentioned above, was the Optislim brand name given prominence on the face of the Fat Terminator box in a way likely to obviate confusion between the two products or their respective sources. 47 The names 'Fat Blaster' and 'Fat Terminator' are given prominence on the respective boxes of the two products. However, while the names are, in a sense, descriptive, their force or 'punch' as names comes from the connation of explosive force which I am satisfied that they are each apt to convey to an ordinary member of the public. I accept the submission of the applicant, with which Mr Rathgeber in part agreed, that the word 'terminator' in the context of the Fat Terminator packaging was calculated to evoke a connection with Mr Schwarzenegger and the movie roles in which he 'blasts' away opponents. I am satisfied that the Fat Terminator name is not calculated, despite its prominence on the face of the Fat Terminator box, clearly to distinguish Fat Terminator from Fat Blaster. 48 In the end it is a question of fact for the Court to decide whether there is such a reasonable probability of deception arising from the packaging that the respondent has adopted for its product Fat Terminator that the continued use of that packaging should be restrained: Australian Woollen Mills Limited v FS Walton and Company Limited (1937) 58 CLR 641 ('Australian Woollen Mills') per Dixon and McTiernan JJ at 658. In deciding whether there is such a reasonable probability of deception it is legitimate to consider the possibility of the two products being displayed on the retailer's shelf side by side or in close proximity. It is also legitimate to consider the possibility of a potential purchaser seeking to identify a product from a recollection or impression earlier produced in his or her mind of a Fat Blaster box or an image of a Fat Blaster box reproduced in an advertisement seen either on television or in the print media. Further, I consider it legitimate to consider the possibility of a potential purchaser seeking to identify a product recommended by word‑of‑mouth where the potential purchaser has been given an oral description of the Fat Blaster packaging. 49 In Australian Woollen Mills Dixon and McTiernan JJ at 658 observed: 'The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight.' 50 In this case unchallenged evidence was placed before the Court of consumers and pharmacy representatives acting on the apparent assumption that Fat Terminator is a product distributed by the applicant. I reject the submission of the respondent that this evidence is of little probative value because it says little, if anything, about the effect of the Fat Terminator get‑up on the mind of the person who made the apparent assumption. I am satisfied that the evidence, taken as a whole, establishes instances of actual deception and is of importance to the judgment or estimation which I am required to make of the effect likely to be produced in the wholesale and retail marketplace for weight loss products of the Fat Terminator packaging. I stress, however, that I would have reached the conclusion which I have identified above in the absence of the 'confusion evidence'. 51 As is mentioned above, I am satisfied that the significant similarities between the Fat Blaster box and the Fat Terminator box, the dissimilarity between the Fat Terminator box and the packaging of other rival products, and the absence from the Fat Terminator box of a significant feature capable of unambiguously distinguishing it from the Fat Blaster product, means that there is a reasonable probability of ordinary or reasonable members of the class of prospective purchasers of over‑the‑counter weight loss products being deceived by the Fat Terminator packaging. The respondent submitted that a prospective purchaser of Fat Blaster would, by reason of the way in which Fat Blaster has been advertised, and because of the likely subjective importance to him or her of the proposed purchase, have a heightened awareness of the brand name Fat Blaster such that they would not be deceived by the Fat Terminator packaging. I reject this submission. First, in my view, it attributes unrealistic significance to the precise brand name and insufficient significance to the general impression of the product and its packaging created by the Fat Blaster advertisements. Secondly, in my view, the submission pays insufficient regard to the likelihood of prospective purchasers acting on word‑of‑mouth endorsements of Fat Blaster which might not be given in a way, or might not be recalled in a way, which is dependent on the precise name Fat Blaster. 52 In my view, by its adoption of the Fat Terminator packaging the respondent has made a representation to the public which is likely to lead a significant proportion of prospective purchasers of over‑the‑counter weight loss products to believe that Fat Terminator is Fat Blaster or alternatively that Fat Terminator is a product which comes from the same source as Fat Blaster. 53 As to the third element of the tort, I am satisfied that the applicant is likely to suffer damage by reason of the erroneous belief engendered by the respondent's misrepresentations. That damage will flow from lost sales of Fat Blaster or Fat Blaster Max. 54 The applicant has established its claim of passing off. Further, the applicant's claim that the respondent has contravened s 52 of the TPA is made out. 55 I conclude these reasons for judgment with the following observations. Each of the parties placed before the Court expert evidence in the form of a report of a marketing consultant touching on the issues, including the ultimate issue, which the Court is required to determine in this proceeding. The evidence was received in each case without objection. I make no criticism of the parties' conduct in this regard. However, I consider it appropriate to record that in the particular circumstances of this case, which is concerned with the packaging of a product intended to appeal to a wide segment of the general public, I have found the expert evidence of no real assistance. This is not only because there is, as is common in cases of this kind, conflict between the evidence of the two experts. It seems to me that evidence of opinions based on market research and expert appreciation of consumer behaviour will rarely be of assistance in litigation where the Court's primary concern is with the behaviour to be expected of, and the judgments likely to be made by, ordinary (even if it might be thought, somewhat credulous) members of the community intent on making a relatively modest purchase in a conventional way. I endorse the comment of Beaumont J in Pacific Publications Pty Ltd v IPC Media Pty Ltd [2003] FCA 104 at [92] that where a claim is essentially a matter for the Court's impression, expert views which are merely 'impressionistic' can be given no more than nominal weight. These observations are not intended in any way to belittle the importance of market research and expert appreciation of consumer behaviour in other types of cases and for other purposes.

56 I direct the applicant to bring in short minutes of order which reflect the findings of the Court. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson .

Counsel for the Applicant: Mr AJL Bannon SC and Mr D Kell

Counsel for the Respondent: Mr DM Yates SC and Mr JM Hennessy

Solicitor for the Respondent: Tress Cocks & Maddox

Date of Hearing: 4, 5, 6 & 7 February 2003

Trade Practices Act 1974(Cth)ss 52, 53(c), 53(d), 53(eb)

At a glance

Court

Decision date

Before

Source

Judgment (16 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (8)