Eveready Australia Pty Ltd v Gillette Australia Pty Ltd [1998] FCA 1588

The television advertisements communicate at three levels. The images depict mechanical rabbits, powered by the respondent's batteries kicking goals, while those powered by other batteries fall over. At a second level it communicates by words superimposed on the screen, and at a third, by voiceover. I will attach to this judgment transcripts of the two advertisements. The two versions contain the same words and voice over statements with two exceptions. The 30 second version contains the additional words in voice over, "extra power for extra time". A superimposed statement, "ordinary batteries = zinc carbon batteries" is exposed for two seconds in the 30 second form and for only one second in the 15 second form. There are also additional visual images in the 30 second version but nothing turns on them. There is emphasis throughout on the figure 4, no doubt intended to reinforce the theme of the greater life expectancy of the respondent's product. This appears to have been a dominant element of the whole campaign. By its statement of claim the applicant asserts that the billboards, the stickers and the television advertisements are misleading and deceptive and in breach of sections 51A, 52 and 53. In connection with the billboard, it is said that it represents that the respondent's batteries last up to four times longer than zinc carbon batteries, including the applicant's zinc carbon batteries. As to the stickers and television advertisements, it is alleged that they breach sections 51A, 52 and 53 of the Act for that reason and also because they falsely represent that the respondent's batteries last four times longer than all equivalent batteries, including the applicant's alkaline batteries. Although this latter allegation is not made concerning the billboards, argument proceeded upon the basis that the same complaints were made against all advertising media. At the invitation of the parties, I have viewed one of the billboards at the corner of Campbell and Hunt Streets, Sydney. Whilst passing the board in the front passenger seat of the car, I was able to read all of the wording on it. As I have said the applicant complains of misleading comparisons of the respondent's alkaline battery with its own alkaline batteries and with zinc carbon batteries. As to the latter comparison it was conceded in argument that such complaint, by itself, would not be likely to attract interlocutory relief. While the applicant asserts that "four times" is an overstatement of the relative performance of the respondent's battery as against zinc carbon batteries, alkaline batteries undoubtedly outperform zinc carbon batteries, and the price differential is enough to cause potential purchasers to pause to consider the options. In argument the applicant concentrated upon the allegedly misleading comparison between the respondent's battery and the applicant's alkaline battery. It is common ground that the respondent's alkaline battery does not outperform the applicant's by a factor of four, if at all. The first question is as to a serious question to be tried. Can it be argued that the respondent's advertisements misrepresent the comparative qualities of the applicant's and respondent's respective alkaline batteries? On the face of the material they do not do so. The billboards operate at two levels. Assuming that a passer-by did not read the footnote, he or she would receive the message, "Duracell alkaline battery … kick on … four times longer", but no indication of the second integer in the comparison. The person might ask "Four times longer than what?" If the notional passer-by read the footnote, he or she would know that the comparison was with ordinary zinc carbon batteries. The applicant emphasised the difficulty in reading the footnote in all of the advertising media, but especially on the billboards. Some boards, it is said, can be seen from trains, and train travellers may have less opportunity to read the full text. Further, the location of some boards may result in their lower parts being obscured. Such factors are relevant in considering the message conveyed by any one board, but a listing of them in the abstract highlights the difficulty faced by the applicant in obtaining blanket interlocutory relief in respect of all such signage. Even accepting that many members of the public are likely to overlook the footnote, that leaves the the shorter message, "Duracell alkaline battery … kick on … four times longer." It is asserted that because of the dominant positions of the applicant and the respondent in the market place, a member of the public would be likely to infer that the comparison was with the applicant's alkaline batteries. Survey evidence suggests that members of the public discriminate between "premium" and "reliable" batteries. Premium batteries, including Duracell and Energiser, (the applicant's alkaline battery), are perceived to last longer but to be more expensive compared to "reliable" batteries. There is little awareness of the term "zinc carbon" which refers to the so-called "reliable" batteries and to other cheaper batteries, but consumers classify the applicant's zinc carbon batteries as "reliable". My own impression of the billboard, without reference to the footnote, is that it invites comparison with that "reliable" class of battery rather than with other versions of the "premium" battery. Alternatively, it might not contain any invitation to meaningful comparison. If a passer-by were to refer to the footnote, it would reinforce my first meaning, the word "ordinary" conveying a reference to the "reliable" category. He or she would infer that an "ordinary" battery was a zinc carbon battery. Despite my view, I consider that the applicant's argument to the contrary is not unsustainable and may be reinforced by further market research and more detailed analysis of the existing material. The applicant has an arguable case but I do not consider it to be a strong one. As to the stickers, the position is very similar but it must be kept in mind that they are seen by potential customers at the point of sale. The impact of the stickers may vary depending upon the customer, whether he or she is in a hurry, the purpose for which the battery is required and the customer's financial position. Such impact may also depend upon the way in which the shopkeeper displays the various battery products. In the end I come to the same conclusion as to the probable meaning conveyed by the stickers as I do in relation to the billboards. In the case of the red and black sticker, the impact of the impugned statement is very much reduced by its location inside the booklet. The stickers may be arguably misleading, but the argument is not strong. This conclusion is based upon the assumption that a potential customer does not read the footnote. In my view, the applicant's case is weaker if he or she does so. I turn to the television advertisements. I will deal firstly with the 30 second version. The first comparison is with the "ordinary" batteries which are defined in superimposed wording as zinc carbon batteries. Again, my own view is that an ordinary member of the public would take the reference to "ordinary" batteries as a reference to the class of cheaper and short lived batteries, the "reliable" batteries in the language of the survey evidence. The superimposed text might well extend his/her knowledge by identifying such batteries as zinc carbon. I do not consider that the advertisement is likely to be taken as inviting comparison between different versions of the more expensive and longer-lived products, the "premium" batteries. The advertisement strongly reinforces the "four" concept and that the Duracell product offers extra power in the form of extra life expectancy, but the question remains, "As compared to what?". This incomplete comparison is repeated at the end of the advertisement. The superimposed text says "lasts up to four times longer". The spoken wording is "Duracell batteries last up to four times longer". I consider that it is unlikely that a viewer would take the comparison as being between the longer-lived, more expensive products, although that may be arguable. The exposure of the definition of "ordinary" battery in the 15 second version is shorter than in the 30 second version, but on my view of the effect of the message, this is irrelevant. I am satisfied that there is a serious question to be tried with respect to all three advertising media and therefore I proceed to consider the balance of convenience. I keep in mind my assessment of the applicant's case as being relatively weak. I should firstly dispose of more peripheral matters. The first is the relevance to this application of the general rule in defamation cases that one should not readily restrain, in advance of trial, an allegedly defamatory publication. The possibility of such an approach having relevance for the purposes of a case such as this was considered by Jenkinson J in Construction Industries (Long Service Leave Board) v Odco Pty Limited (1988) 10 ATPR 40-886 at page 49-599. Of course, I should not consider such a matter other than as one of many factors to be taken into account. Counsel for the applicant submitted in argument that the policy of the Trade Practices Act 1974 must also be recognised, that being to prevent unfair and misleading advertising. In the end neither factor looms large in this case. The other point is that the respondent asserted that I should doubt the applicant's good faith in bringing this application because it has not consistently complained of earlier similar advertising by the respondent. The applicant says that it has challenged some, but not all, other advertisements depending upon its assessment of whether each was legally offensive. I have no doubt that each party has, at all material times, been anxious to take such advantage as has been reasonably and properly available to increase its market share at the expense of the other. I do not think this matter should be given great significance for present purposes. Of greater concern is the market disruption likely to be caused to the applicant by the current campaign and whether it can be readily compensated in damages should the action be successful. Against this is the likely disruption of the respondent's marketing campaign by any injunction at this sensitive period of the retail year and the prospects of compensation for any loss by an award of damages, should the action fail. It would be foolish in considering balance of convenience to overlook the positions of the parties as major suppliers in a lucrative market. Any advantage obtained by one is likely to have an equivalent, but negative, effect on the other. It is likely that the benefit to the applicant of an injunction will result in an equivalent negative effect for the respondent. Similarly any benefit to the respondent from its present campaign is likely to have an equivalent detrimental effect on the applicant. It will be equally difficult to calculate the applicant's loss if there is no injunction as it will be to calculate the respondent's loss if an interlocutory injunction is wrongly given. Further, an injunction would compel the respondent to rejig its campaign. On the other hand, in the absence of an injunction, the applicant will presumably have to take defensive action. Theoretically it would be possible to seek to tailor the relief to meet specific complaints in a limited way by restraining the respondent's use of one or more of the advertising media in question or requiring amendment of one or more of the forms presently in use. Neither party suggested the first option although the applicant suggested the second as a possibility. I have given thought to the question of trying to find some agreed basis which would meet the applicant's complaints, but given my view of the strength of its case that seems inappropriate. One is compelled to ask rhetorically why the applicant should be allowed to interfere in the respondent's business on the strength of a doubtful complaint if the balance of convenience does not so dictate.

In the end I fall back upon my assessment of the strength of the applicant's case as the decisive factor in the balance of convenience, all other things being materially equal. The balance of convenience lies against an injunction. The motion will be dismissed. I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett

Counsel for the Applicant: Mr S. Finch SC & Mr F. Kunc

Counsel for the Respondent: Mr R.C. Macaw QC & Mr S.J. Sharpley

Solicitor for the Respondent: Mallesons Stephen Jacques