McWilliams Wines Pty Ltd v. McDonalds System of Australia Ltd [1980] FCA 188

Federal Court of Australia|1980-12-16|Before: Fisher JJ, Smithers J

Trade Practices - - Misleading and deceptive conduct - Use

of Trade Mark "Big Mac" in respect of goods being a Trade Mark of another Corporation in respect of a different class of goods - Public misapprehension as to the limits of the corporation rights in respect of the name - Whether conduct creating mere confusion is conduct which is misleading or deceptive - - whether advertisement represented that a corporation had a sponsorship approval or affiliation

McWilliam's Wines Pty. Ltd. v. McDonald's System of

) ) NEW SOUTH WALES DISIRICT REGISIRY } N.S.W.G. No. 20 of 1980 ) )

Judges Making Order: Smithers Northrop and Fisher JJ.

The order made on 21 December 1979 be set aside.

The respondent pay the appellant's costs of the trial including all reserved costs and the costs of the

) ) NEW SOUTH WALES DISTRICT REGISTRY ) N.S.W.G. No. 20 of 1980 ) )

BET WEEN: McWILLIAM'S WINES PrY. LIMITED Appellant (Respondent) AND: MCDONALD'S SYSTEM OF AUSIRALIA PTY. LIMIT ED Respondent (Applicant) Coram: Smithers, Northrop and Fisher JJ. 16 December 1980 REASONS FOR JUDGMENT Smithers J.: This is an appeal as of raght from an order of

the Federal Court of Australia constituted by a single Judge which granted relief by way of injunction restraining the appellant from using or publishing or causing, procuring or authorising use or publication of the words "BIG MAC" in connection with the supply or possible supply of wine or in

connection with the promotion by any means of the supply or use

The order was based on a finding by the learned Judge that certain conduct of the appellant constituted a

contravention of s.52(1) of the Trade Practices Act 1974 (the

Act). The order was made pursuant to the authority conferred

on the Federal Court of Australia by s.80 of the Act.

The conduct of the appellant which was found to be in contravention of s.52(1) of the Act was the publication of certain advertisements in which there appeared the expression "BIG MAC" which was an expression used by the respondent in uts business of restauranteur and "fast food" retailer as the name of one of its products, namely a particular type of hamburger. In the conduct of its business the respondent had also used the name of "McDonald's" quite extensively as a trade name for itself. The "BIG MAC" hamburger had been widely advertised and was exceptionally well known to members of the public as a product of McDonald's. All advertisements were to the same effect and form. Each of them showed pictures of three bottles of wine, each two litres in size, and a number of glasses

The advertisements also contained comments by persons described as "Top wine writers". The comments were about "Rosedale Dry Red". And the labels on the bottles featured the

name "McWilliam's" and "Rosedale" and described the contents of

one bottle as "Dry Red Table Wine", another as "Medium White

Table Wine" and the third as "Dry White Table Wine". One of

the comments was by a Mr. Peter Wilson who said about the wine,

The respondent claimed that the use of the words "BIG MAC" by the appellant constituted, in trade or commerce, engaging in conduct that was misleading or deceptive or likely to mislead or deceive within s.52(1) of the Act. It also claimed that it constituted a contravention of s.53(c) of the Act in that the advertisement constituted a representation, in trade or commerce in connection with the supply or possible supply of wine, or in connection with the promotion by any Means of the supply of wine, that the wine had a sponsorship or approval which it did not have. It was also alleged that the

advertisement constituted a contravention of s.53(d) of the Act in that, in the same way, the advertisement represented that

the respondent had a sponsorship, approval or affiliation which

The main complaint of the respondent about the advertisement was the appearance of the words "BIG MAC" in letters about 3.5 centimetres in height, extending substantially right across the advertisement immediately below the word "McWilliam's" which was in letters about 1.5

The learned trial Judge found that the use of the words "McWilliam's BIG MAC" in the advertisement might be expected to cause a considerable amount of confusion to a sufficiently relevant number of potential purchasers of either or both the appellant's wines and the respondent's hamburgers. He expressed himself as satisfied that the measure of confusion which the relevant conduct would produce to be such that 1t would lead to a sufficient number of persons being likely to be misled or deceived upon the question of whether or not there was a business connection between the appellant and the respondent to establish a breach of s.52(1) of the Act. It was

upon this finding that the relief granted was based.

The learned trial Judge was not satisfied that by the relevant conduct of the respondent it represented that the Rosedale wine had a sponsorship or approval it did not have or that the respondent had a sponsorship, approval or affiliation

McWilliam's for the appellant and McDonald's for the

The case made for McDonald's before the learned trial judge was that the conduct complained of was such as was likely

to mislead or deceive the relevant persons in relation to

whether or not there wasS some commercial connection between

McWilliam's and McDonald's, of almost any type, including for example that McWilliam's and McDonald's had joined together to promote McWilliam's wines, that McDonald's had approved the use by McWalliam's of the name "BIG MAC" for the promotion of its wines, or that McWilliam's and McDonald's had joined in a joint venture to promote the wines, or that McDonald's

That was the case put for the respondent in this appeal. Neither at the trial nor in this appeal was any case made that the use of the words "BIG MAC" were likely to deceive or mislead persons by causing them to think that the wines in

respect of which the words were used were a product of

To my mind the message said to be conveyed by the advertisement might well be likely to create a favourable attitude towards the appellant's wine. Belief that McDonald's towards whom, or whose products a substantial number of the public had pleasurable thoughts, were promoting the sale of the appellant's wine, could not but be a favourable factor, but one

would think, on the whole, of minor importance in the sale of

The first question is whether the conduct of the appellant in publishing the advertisement was misleading or

deceptive or likely to mislead or deceive within the meaning of

The quality of being misleading or deceptive is said to attach to that conduct because the advertisement conveyed or was likely to convey to readers thereof the impression that McWilliam's and McDonald's had some business connection in relation to the promotion of the wine or the publication of the

The learned Judge found that the conduct caused confusion amongst a wide range of people. By confusion it would seem that his Honour meant that a substantial number of people were caused to wonder whether there was some connection of a business nature between the appellant and the respondent.

His Honour said that the wonderment which was caused was of such magnitude that it was likely that persons had been or

I understand his Honour's finding to be that the conduct of McWilliam's in publishing the advertisement was likely to have caused confusion and wonderment in people's minds as to whether or not there was a business connection between McDonald's and McWilliam's concerning the promotion of the wine, but not to be a finding that the conduct was likely to cause them to form conclusions that there was in fact

I am confirmed in this view because his Honour went to some length in the early part of his Reasons for Judgment to examine authorities which he considered led to the conclusion that a state of affairs which causes confusion is for purposes of the Act to be equated with a state of affairs likely to mislead or deceive. It would seem clear that 1t was by acting on this view that his Honour made the finding that the conduct of McWilliam's was such as to establish a breach of s.52(1)

of the Act. It would seem however that although an approach along these lines to a similar problem arising under s.114 of

the Trade Marks Act 1905 was appropriate, and was adopted by

Kitto J. in Southern Cross Refrigeration Co. v. Toowoomba

Foundry Pty. Ltd. 91 C.L.R. 592 it 1s not appropriate in

respect of s.52 of the Act. Section 114 of the Trade Marks Act

++-noO mark the use of which would by reason of its being likely to deceive or otherwise be deemed disentitled to protection in a court of justice

--. Shall be used or registered as a trade mark..."

It was pointed out by Kitto J. at p. 594 that the corresponding

provision of the English Trade Mark Act 1938 (Imp.) contained

the words "or cause confusion" after the words "likely to deceive" and said "...but, while these words make the section more specific they add nothing to its effect." And in the same

case on appeal in a joint Judgment the Full High Court said

"It 1s, of course, for the person applying for registration to establish that there in no likelihood of confusion and we agree with Kitto J. that registration should be refused if 1t appears that there is a real risk that 'the result of the user of the mark will be that a number of persons will be caused to wonder whether 1t might not be the case that the two products came from the same source';it 1s, of course, not necessary that 1t should appear that the user of the mark will lead to passing-off: see per Morton J. (as he then was) in In re Hack's Application (1940) 58 R.P.C. 91, at p.103."

The critical consideration appears to be that a person upon whom an onus lies to establish that use of his mark 1s not likely to deceive or be otherwise deemed disentitled to protection in a Court of justice can hardly succeed unless he establishes that there 1s no likelihood of confusion. The Sltuation which arises under s.52(1) is different. There, one 1s concerned with establishing that a person engaged in conduct having certain specified qualities, namely that it is misleading or deceptive or likely to mislead or deceive. In such a situation there 1S no scope for including in the proscribed conduct any conduct which does not fall within the very words of the Act. Accordingly the finding of the learned trial judge, as I have interpreted it, as indicated above, was not utself sufficient to sustain the order made in favour of

As a result this Court was invited to decide whether the conduct of McWilliam's in publishing the advertisement was likely to mislead or deceive persons by causing them to believe

that there was a business connection between McDonald's' and

McWilliam's in relation to the promotion of the sale by

McWilliam's of its wine or in relation to some aspect of the

In this connection it is to be observed that 1t 1s for the Court itself to determine whether there 1s a likelihood that the relevant persons will be misled, and, in the words of

Lord Morris in Parker-Knoll Ltd. v. Knoll International Limited

{1962] R.P.C. at 279, "In arriving at a decision the court must not surrender in favour of any witness its own independent judgment", There 1s ample authority for the proposition that 1t ius for the court objectively to determine whether the conduct 1S likely to mislead. If anything, authority is somewhat sparse for the view that evidence of members of the public has any relevance at all. Reference may be made to two passages from Halsbury 3rd ed. vol. 38, the first at »p.589

dealing with comparison between trade marks; namely,

"Whether or not any degree of resemblance likely to deceive or cause confusion exists, 18 a question of fact for the tribunal or court to decide upon the evidence in each case and 1s not a Matter for witnesses.

What degree of resemblance is likely to deceive or cause confusion in any instance is incapable of definition a priori and the observations of judges

upon other and quite different facts are usually of little help".

[he second is at p. 639, paragraph 1051, omitting the first

infringement or for passing off, whether the similarity of the name or get-up complained of to

that employed by the plaintiff is such as to be calculated to deceive, and it is therefore not proper for witnesses to be asked whether in their opinion this is the case."

Reference may be made also to the balance of that paragraph and

Reference may be made also to the dicta of Lord Diplock

in General Electric Co. (of U.S.A.) v. General Electric (Co.

Ltd. [1972] 1 W.L.R. at p. 738, Wrottesley J. in Concentrated

Foods Ltd. v. Champ [1944] K.B. at p. 350 and Lord Macnaghten

an Payton & Co. Limited v. Snelling Lampard & Co. Limited

In our opinion evidence of members of the public that they have been misled, 1f it does actually go so far as that, 1S not conclusive of the question for determination but merely of peripheral value. The court must make up its own mind, and 1t 1S easier for the court, particularly in our opinion, in the circumstances of this matter to make an objective determin-

It 1S important to observe that the expression "BIG MAC" is not used as a name by which to refer to or identify the business entity known as McDonald's. Many witnesses statad

that when they saw the words "BIG MAC" in the advertisement

they thought of the Big Mac hamburger sold by McDonald's.

1l. Certain witnesses then concluded that McDonald's must have a business connection with McWilliam's in relation to the matter

But of course no such mental procedure would have occurred unless in the first instance the person concerned had interpreted the use of the expression "BIG MAC" in its setting un the advertisement as a statement of some kind made by McWilliam's with reference to McDonald's "BIG MAC" hamburger. If a person did conclude that the advertisement was making some sort of a statement about the "BIG MAC" hamburger 1t would be natural for him to try to make sense of the advertisement. If one considers what the situation would have been had _ the advertisement actually said ""McWilliam's - McDonald's" instead of "McWilliam's BIG MAC", 1t would have been guite reasonable to conclude that the advertisement was saying that McWilliam's and McDonald's were in some joint venture together concerning

Accordingly if by using the expression "BIG MAC" in its setting an ordinary person knowing of McDonald's hamburger would understand the advertisement to be referring to or saying something about McDonald's hamburger, it seems reasonable that he also should conclude that there 1s some relevant joint venture. In that case he would be misled. Whether he would be misled by the advertisement or by some other factor may be a

question. But he would certainly acquire an erroneous i1dea of

the situation of the parties in relation to the matter in hand.

It would seem therefore that an important guestion is whether a person knowing of McDonald's "BIG MAC" hamburger would understand the advertisement to be referring to McDonald's hamburger i.e., saying something about it, and if so

It has been said that s.52(1) "...is concerned with consequences as giving to particular conduct a particular colour. If the consequence 1s deception, that suffices to mak2

the conduct deceptive." per Stephen J. in Hornsby Building

Information Centre Pty. Ltd. v. Sydney Building Information

Centre Ltd. 140 C.L.R. 216 at 228, 18 A.L.R. 639 at 647. But the mere fact that the conduct was a matter constituting one of the factors by reference to which persons formed an erroneous conclusion is not conclusive that the conduct was deceptive. Thus in the Hornsby case itself 1t was assumed that by the use of the name "Hornsby Building Information Centre" others were led to believe that that entity was a branch or otherwise associated with the Sydney Centre. Yet it was held that the use of that name was not a contravention of s.52(1) of the act. It was said to be necessary to examine why the misconcevdtion has arisen in the minds of others. The explanation was found in the circumstance that the name adopted by the Sydney Building Information Centre being descriptive was equally

applicable to any business of a like kind, its very

descriptiveness ensured that it was not distinctive of any Particular business, and hence its application to other like businesses would not ordinarily mislead the public. (per Stephen J. (supra) 140 C.L.R. at 229 and (1977) 18 A.L.R. at p. 648.) In such circumstances the conduct of the appellant did

not have the quality of being truly misleading or deceptive.

To determine how a person with knowledge of McDonald's "BIG MAC" hamburger would interpret the significance of the words "BIG MAC" 1n the advertisement it is convenient to examine the factors by which it 1s said a reader of the advertisement might be influenced in his understanding of the message presented in it. Omitting the erroneous assumptions and misconceptions referred to hereafter, they would in

there was in small print a statement by one, Peter Wilson, a journalist to the

the words "BIG MAC" in the advertise- ment could well be apt words to designate a large bottle of McWilliam's Rosedale

(x1) the printing in the advertisement of the words "BIG MAC" was not similar to the printing of the expression "BIG MAC" in

(xii) the expression "McWilliam's BIG MAC" was a grammatical way of expressing the notion that the advertisement concerned

(x111) the words "BIG MAC" are words associated in the public mind with McDonald's

McDonald's might join with McWilliam's in promoting wine or in publishing such

It is necessary, however, to consider factor (xiv). "BIG MAC" certainly identifies the McDonald's hamburger, but

on the evidence one could not be satisfied that, 1t 1s

Synonymous with the business entity trading as McDonald's .

On this matter it is useful to look at the respondent's publicity. In the quantity of publicity materials submitted to the Court one does not find any instance of McDonald's being referred to as "BIG MAC" . In every case it 1S clear that the trader concerned 1S McDonald's and that the Big Mac hamburger either named or illustrated, is its product. When "free offers" are made it is McDonald's which displays them, the logo which 1S displayed on publicity material is a capital "M" with the word McDonald's printed across it. The "Ronald McDonald Giant Song Story and Coloring Book" is "Available only at McDonald's", the products are obtainable at ""McDonaldland". The invitation to get a "'BIG MAC' hamburger with your back to school clothing" is redeemable only by presenting the relevant voucher at "McDonald's." The cover story of the Sydney "Bulletin" of 2 May 1978 contains an illustration of a "BIG MAC" but features McDonald's stating "at McDonald's they've got a recipe for hamburgers", and advising that 1t takeS money and years of work to become a millionaire making "BIG MAC's" under a McDonald's' franchise. The situation 15 Similar in relation to an article in the magazine "Business" and articles in other magazines. The nearest to use in the publicity submitted to the Court of "BIG MAC" being used to refer to the McDonald's business 1S an item in the Sun Herald of 7 October 1979 headed, " McDonald's is out to get it all" with a sub-heading "'BIG MAC' goes to the movies". That item explains how McDonald's has suceeded in 1ts mission to

educate the palates of Australian children and how "the Big Mac

company is shaping up to the 1980's". Television texts invite people to "Come to McDonald's... We'll give you a Big Mac Free". Subject to Big Mac going to the movies there 1s no suggestion of an invitation to Big Mac or to Big Mac's or that Big Mac does this or that. There is no suggestion that "BIG

MAC" is anything but a hamburger. It is not the company, it

The great majority of witnesses called by the respondent and some by the appellant deposed that immediately they saw the advertisement they thought of McDonald's Big Mac hamburgers. Some said they wondered whether McWilliam's "could get away with it, since everyone knew that "BIG MAC" was a hamburger." Others said that they thought Big Mac was a name they considered McDonald's was entitled to and therefore McDonald's must have given permission for use of the words "BIG MAC". But there 1s little support from any of the witnesses for the notion that the expression "BIG MAC" would

It 18 an alternative name for McDonald's "BIG MAC". But whether 1t is used in that sense in any varticulaar context would be a question of construction. In the instant case that matter of construction 1S complicated because of assumptions and preconceived ideas that were entertained by various readers one assumption was that it waS most unlikely that McWilliam's

would use the same name for its wine pack as the appellant had

Made famous with respect to its hamburger and that it was unlawful for it to do so unless it was done in conjunction with

In this context McDonald's as an entity, steps into the situation, whereas had the reader been free of his erroneous assumptions and preconceived ideas this would not have happened. So far as persons subject to such assumptions were concerned they certainly acquired an erroneous belief from the advertisement. When in a particular context one uses a trade name associated with a product of another person but which is a name which may lawfully be used, with respect to one's own product there is inevitably a risk that some persons may be confused. So far as McDonald's was concerned, subject to the law relating to passing off, trade mark infringement, and any incidental benefit 1t could obtain by means of relief under s.52(1), it had no right to deny McWilliam's the use of the name "BIG MAC" ain relation to any one of its wine products. And the one thing about which the bulk of witnesses in this case were in no doubt was that the product the subject of the advertisement was a wine product of McW1lliam's and not of "icDonald's. Also on the evidence no trade mark of McDonalds extended to wine. And whether McDonald's could achieve an incidental benefit through the operation of s.52(1) of the Act depended on the construction which persons would give to the advertisement. Of course it does not follow that

over time members of the public acquainted with McDonald's

use of the words "BIG MAC" have not become so familiar with its exclusive use as the name of McDonald's' product, that they have come to believe that there is some legal or other restriction on the use of those words much wider than that which actually exists. And having regard to the nature and extent of the reputation of Big Mac as a McDonald's hamburger 1t is quite possible that without formulating the matter in their minds people harbour either consciously or subcon- sciously, a general concept that in some way, "BIG MAC" belongs to McDonald's. The result may be that they cannot imagine that Big Mac could be used in any context save as referring to McDonald's hamburger and inevitably construe the words in the advertisement as saying something about

Any person of one of the states of mind described above who reads the advertisement, and who even observes that 1t relates to wine, may well think that McDonald's Must have consented to the use of the words "BIG MAC" and, accordingly,

conclude that there 1s some business connection between

McDonald's and McWilliam's relating to the wine or the advertisement, Immediately a reader thinks that the words "BIG MAC" are a reference to McDonald's hamburger they are

misled and it 1s almost inevitably that he will conclude that the McDonald's must be in the wine venture in some way. What

But were it not for the notion that there would be something improper in the use of the words by any trader other than McDonald's, or that in whatever context they were used they could only refer to McDonald's hamburger, or for some such notion in the mind of a reader, the advertisement would not convey to anybody the idea that it referred to or had anything to do with the hamburger. Any such initial impression would be destroyed by the context. At most, all that might occur would be surprise that McWilliam's were using the same name for 1ts product as McDonald's was using for its. At the most some people might wonder whether McDonald's and

McWilliam's were acting together. But even so they would not

It 1S a question therefore whether any misapprehension which has arisen is a consequence of McWilliam's conduct or of other factors, namely that the advertisement was read and interpreted by reference to erroneous concepts and assumptions. And the further and critical question is whether conduct otherwise neither misleading nor deceptive acguires deceptive quality because persons under the influence of erroneous ideas

It 1s no doubt a sound view that persons engaging in

commercial activity involving communications with the public

must take the commercial environment as it actually exists. It

May be said therefore, that when McWilliam's published the

advertisement the commercial environment was such that it was likely that some persons because of their erroneous preconceived ideas, would understand the words "BIG MAC" to refer to McDonald's hamburger and would draw inferences

therefrom as to the possible involvement of McDonald's in the

wine venture, and that if they did they would be misled.

Section 52(1) of the Act enjoins traders not to engage in conduct which 18 described by Stephen J. in the Hornsby Case (supra) as truly a contravention of the section, that is which 1s misleading or deceptive (see 140 C.L.R. at p. 226, 18 A.L.R. at p.645). It 1s difficult to think that conduct is truly misleading or deceptive if it tells the truth and is such that if 1t 1s observed by persons who have no false ideas concerning extraneous matters nobody will be misled. And that is the case with this advertisement. A person not under the influence of erroneous ideas such as those discussed above may well be surprised to see the words "BIG MAC" being used for a wine pack, he may wonder whether McWilliam's was entitled to use them, he may wonder whether McWilliam's had to get permission to use them. But he cannot proceed from wonder to conclusion or even to probability on those matters. He will never be more than at most, in the state described by the learned trial Judge in his basic finding in this case, namely confused as to whether there was or was not a business connection between

McWilliam's and McDonald's. Such a person is not misled.

It follows from the above that those persons who, by approaching the advertisement with erroneous ideas in their mind and interpreting its contents by reference thereto and are thereby misled do not arrive at their erroneous conclusion as a consequence of the terms of the advertisement, but because of the application, to those terms, of reasoning based on erroneous assumptions of their own. A member of the public can hardly complain of being misled by the conduct of another if because of errors made by himself he erroneously interpreted the nature of that conduct. And one would not contemplate that conduct, only misleading to those who misinterpret 1t because they apply erroneous assumptions in the exercise of interpretation, would be proscribed by the legislature, Such

conduct would not be, one would think, truly misleading or

In those situations in which it 1s lawful for a trader to commence to use, in connection with his product, a name already in use by another trader for his product and widely known in respect of that product the possibility that persons familiar with the previous use of the name will, for a time, wonder how 1t comes to be used for the new product, and to entertain theories about it, inevitably exists. But it 1S not the purpose of the Trade Practices Act to intercept the conduct of lawful business. But in such situations as last mentioned

lawful business would be intercepted 1f£ the name could not be

used otherwise lawfully, but unlawfully because persons acting by reference to erroneous assumptions might for a time misunderstand what waS going on. It Seems a sound view that, in such situations, a certain amount of misunderstanding 1s tolerable, just as it was declared to be tolerable by Lord Simmonds in cases where like descriptive names are used for

separate businesses. (see Office Cleaning Services Ltd. v.

Westminster Window and General Cleaners Ltd. (1946) R.P.C. 39 at

But in this case, basically it is to be tolerated because such misunderstanding as occurs is the consequence not of misleading conduct by the appellant but of a misunderstand-

ing by observers induced by erroneous assumptions on their

Having regard to the foregoing the respondent's claim

for relief under s.53(c) and (d) of the Act necessarily fails, as 1t did also in the view of the learned trial judge, for the

As a result the appeal should be allowed, the injunction dissolved, the cross appeal dismissed, the action dismissed and the trial Judge's orders as to costs be set aside and in their place it be ordered that the respondent pay the appellant's costs of the application made on 23 November 1979

and that the respondent pay the appellant's costs of the trial

including the costs of the proceedings for interlocutory relief

preceding pages are a true copy of the Reasons for Judgment herein of his Honour

BETWEEN: MCWILLIAN'S WINES PrY. LTD. Apoeliantr (Respondent) and McDONALD'S SYSTEM OF AUSTRALIA Try. ITD. .

Responcent (Applicant) NORTHROP J. REASONS FOR JUDGNENT 16 DECHMSEF 1929

The facts of this appeal are sev. out in the reasons for judgment of Smithers J. and need not be repeated. I agree generally with his Honour's reasons for Judgment and

his conclusion, but I desire to make some general commerts.

In reaching his conciusion, the learned trial judge placed great reliance upon expressions of opinion contained in judgments given .n matters involving the application cof the law relating to trade marks. Likewise, counsel for tho respondent relied upon a similar aprroach. Much assistance can be derived in considering the meaning and application of

8.52 Trade Practices 4ct 1074, as awended, by reference to

those authorities ard authoriti2s relating to the tort of

passing off, but at the same tiwe great care must be taken Since the policy of both the common law and statutes relating to trade marks and passing off have a different emphasis to

the policy of Part V of the Trade Practices Act. For present

purposes it is sufficient to say that the' policy of Part V is to protect the public as consumers of goods and services

provided by corporations in trade and commerce, see R. v.

Credit Tribunal; ex parte General Motors Acceptance

Corporation, Australia (1976-77) 137 C.L.R. 545 per Mason

J. at p.561 and Hornsby Buriding Information Centre Pty. Ltd.

v. Sydney Building Information Centre Ltd. (1977-78). 140

The law relating to passing off ard to trade marks have a common basis, and although based upon deception to the public, are directed to protecting the proprietary rights of a trader. The essential characteristics to found a successful action of passing off have been summarised in

Warnink v. Townsend & Sons (Hull) Ltd. [1979] A.C. p.731. At

"My Lords, A. G. Spalding & Bros. v. A. W. Gamage Ltd., 864 L.d. Ch. 449 and the Jatcr cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresantation (2) made by a trader ain the course of tradc, (3) to prospective customers of his cr ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable

conseguence) and (5) which causes actual] damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so."

"As my noble and learned friend, Lord Diplock, said in Star Industrial Co. Ltd. v. Yap Kwee Kor [1976] F.S.R. 256, 269:

'whatever doubts there may have previously been as to the legal nature of the rights which were entitled to protection by an action for 'passing off' in courts of law or equity, these were laid to rest more than 60 years ago- by the speech of Lord Parker of Waddington in Spalding v. A.W. Gamage Ltd., 32 R.P.C. 273

('the Gamage case') with which the other Members of the House of Lords agreed. A

passing off action 1S a remedy for the invasion of a right of property not in the Mark, name or get-up improperly used, but in the business or goodwill likely to be injured by the misrepresentation made by passing off one person's goods as the goods of another. Goodwill, as the subject of proprietary rights, is incapable of subsisting by itself. It has no independent existence apart from the business to which it 18 attached. It is local in character and divisible; if the business is carried on in several countrijes a separate goodwill attaches to 1t in each. So when the business is abandoned in one country in which 1t has acquired a goodwill the goodwill in that country perishes with it although the

business may continue to be carried on in other countries."

An action for infringement of a trade mark 1s a remedy for the invasion of a right in the mark, and at ihe present time depends upon the existence of a statutory right of a proprietary nature, see Kerly's Law of Trade Marks and

Trade Names 10 Ed. para. 15-02, p.307. In Australia, see

Trade Marks Act 1955, as amended, and for present purposes

s.58, s.62 and s.65. See also Moorgate Tobacco Co. Lid. v.

Marks Act depends largely upon the absence of deception or confusion to the public and it is with respect to the sections relating to that aspect of trade marks law that

reference 1s made. The following sections of the Trade Marks

"25. Subject to this Act, the Registrar shall not register in respect of goods a trade mark identical with one belonging to a different

proprietor which is already on the register in respect of the same goods or description of

goods or so nearly resembling such a trade mark as to be likely to deceive."

"114. No scandalous design, and no mark the se of which would by reason of its being likely to deceive or otherwise be deemed disentitled to protection in a court of

justice, or the use of which would be contrary to law or morality, shall be used or

registered as a trade mark or part of a trade marl." These two sections and related issues arising in infringement actions have been considered in a large number of matters before the High Court. Registration of a mark confers a

right of a proprietary nature and this has affected the

exegesis of the sections. In Southern Cross Refrigerating

Co. v. Toowoorba Foundry Pty. Ltd. (1953-4) 91 C.L.R. 592

Katto J. sets out a summary of the relevant principles

developed by the courts. At pp.594-5 his Honour said:

"I am concerned, therefore, to consider only s.114, the material provision of which 1s that no mark, the use of which would by reason of its being likely to deceive or otherwise be deemed disentitled to protection in a court of justice shall be registered as a trade mark. The corresponding section of the English Act (s.l1 of the Trade Marks Act 1938 (Imp.)) 18s in the same terms with the addition of the words 'or cause confusion' after 'likely to deceive'; but, while these words make the section more specific, they add nothing to its effect. In relation both to the English and to the Australian section there are certain propositions which I think may he accepted as established by the cases. I take them,' Substantially, from the Judgment of Romer J., (as he then was), 1n In re Jellinch's Applicatian (1946) 63 R.P.C. 59, at p.78 : (2) In all applications for registration of a trade mark, the onus is on the applicant to Satisfy the Registrar (or the court) that there 1s no reasonable probability of confusion. (i2) It 1S not necessary in order to find that a trade mark offends against the section, to prove that there 1S an actual probability of deception leading to a

passing-off. While a mere possibility of confusion 1s not enough - for there must be a real, tangible danger of i1itsS occurring

(""eckitt & Colman (Australia) Ltd. Vv. Boden (1945) 70 C.L.R. 84, at pp.34, 95; Sym Choon & Co, Ltd. v. Gordon Choonrs Nuts Ltd. (1949) 80 C.L.R. 65, at p.79) - 1t 18 sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt. (111) In considering the probability of deception, all the surrounding circumstances have to be taken into consideration. (This includes the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold, and tne character of the probable purchasers of the goods : Jafferice v. Scorlett (1937) 57 C.L.R. 115, at p.120). (iv) In applications for registration, the rights of the parties are to be determincd as

at the date of the application. (v) The onus must be discnarged by tne applicant in respect of all goods coming within the specification in the application (pursuant to s.32(2)) of the goods or class of goods in respect of which the registration is desired, and not only in respect of those goods on which he 1s proposing to use the mark immediately. And the onus 1s not discharged by proof only that a particular method of user will not give rise to confusion. The test is, what can the applicant do if he obtains registration?"

In dismissing the appeal from the decision of Kitto J., the High Court, comprising Dixon C.J., McTiernan, Webb, Fulliagar

"We have thought 1t necessary to make some reference to the matters proper for consideration in relation to this issue under s.25 for the argument of the appell nt seizes upon them and asserts that once these matters have been considered and the relevant issue answered in favour of an applicant 1t 1s impossible to say that the use by him, with respect to his goods, of the trade mark in guestion would be 'Jikely to deceive' within the meaning of s.114. Whilst conceding that the likelihood of deception 1s not as great where, 1n no sense, can it be said that an

applicant's goods are the same or of the same description as those of en opponent, it is guite clear that the latter finding by no means disposes of the relevant inquiry under s.114. To suggest that it does really confuses the nature of the inquiry which arises under s.25 for 1t 18 not sufficient in order to reach the conclusion that an applicant's goods are of the same description as those of an opponent, merely, to find that in the course of marketing there 185 a likelihood of deception taking place; the inguiry 1S much more limited and must be answered ain favour of the applicant unless upon an examination of the material matters

the conclusion 1s justified that the applicant's goods ought to be reuyarded as

being of the same description as those of the opponent. This 1s far from saying that 1£ the evidence shows a probability or likelihood of deception such a conclusion would be justified. Indeed 1f it wer? not a distinct and ceparate inquiry it would be impossible to reconcile the multitude of cases - of which In re Jellinek's Application ((1946) 63 R.P.C. 59) and Reckitt & Colan (Australia) Ltd. v. Boden ((1945) 70 C.L.R. 84) are themselves examples ~- in which it has been thought necessary to consider the likelihood of deception notwithstanding a finding that the respective goods of the applicant and _ the Opponent were not the same or of the same description,"

earlier cases, but it is desirable to set out some passages

therefrom. In Jafferjyee v. Scarlett (1937) 57 C.L.R. at

"Both the applicant and the opponent have filed declarations expressing opinions, on the one hand, that no person is likely to he

deceived by the registration of the applicant's mark, and on the other hand, that

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (310 paragraphs)

Cited By (1)