C: CONSIDERATION: LEGAL PRINCIPLES AND THE FACTS AS FOUND
78 The principles governing passing off are generally well settled. The tort gives effect to the notion that a trader must not pass off the trader's goods or services as the goods or services of another. That is, a trader is not permitted to use names, marks, get-up, or other characteristics of another trader's goods so as to induce purchasers to believe that the goods that the trader is selling are the goods of the other. The tort is designed to protect a trader's intangible property rights in the trader's business, goodwill or reputation, which is likely to be injured by the misrepresentation involved in a passing-off: see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 ('Hornsby Building Information Centre') at 226-227.
79 In ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 ('ConAgra') at 356, Gummow J remarked that "the law of passing off contains sufficient nooks and crannies to make it difficult to formulate any satisfactory definition in short form". This remains true. For present purposes, it suffices to say that, in order to establish the tort of passing-off, NW must establish that:
(1) a goodwill or reputation attaches to the NW Product Range in the minds of relevant purchasers by association with the get-up under which the NW Product Range is supplied to the public, such that the get-up is recognised by the purchasers as distinctive of the NW Product Range;
(2) Baco has misrepresented to the public (whether intentionally or unintentionally) that the products in the Baco Product Range are products in the NW Product Range or that they come from the same source as products in the NW Product Range; and therefore that a significant proportion of potential purchasers is likely to believe that the products in the Baco Product Range are the products of NW or that they come from the same source as products in the NW Product Range; and
(3) NW has suffered or is likely to suffer damage by reason of the erroneous belief engendered by Baco's misrepresentation.
See Reckitt and Colman Products Ltd v Borden Inc [1990] RPC 341 ('Reckitt and Colman') at 406-7 per Lord Oliver of Aylmerton; Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd ('Pub Squash') [1980] 2 NSWLR 851 at 857 per Lord Scarman; Morgan & Banks Pty Ltd v Select Personnel Pty Ltd (1991) 20 IPR 289 at 294 per Clarke JA (with whom Priestley JA and Hope AJA agreed); ConAgra at 355-356 per Gummow J; and Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd(2002) 55 IPR 354 ('Red Bull') at 371-2 per Weinberg and Dowsett JJ (with whom Branson J agreed). Lord Diplock's more detailed statement of the elements of the tort in Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731 at 742 has also been regularly cited and relied on in Australian courts: see, e.g., Betta Foods Australia Pty Ltd v Betta Fruit Bars Pty Ltd [1998] ATPR 441-624 at 40, 839 per Goldberg J and Red Bull at 370. Nothing here turns on the differences in the formulations. If a case of passing off is made out, a court will presume damage, but, as to the measure of damage, the court will consider all the circumstances of the case: see Childrens Television Workshop Inc v Woolworths (NSW) Ltd [1981] 1 NSWLR 273 at 281-2 per Helsham CJ in Eq and Draper v Trist (1939) 56 RPC 429 at 442 per Goddard LJ.
80 The relevant date for determining whether NW had the necessary reputation in the elements of packaging and get-up in question was the date upon which Baco launched the Baco Product Range in the Australian market, that is, in May 2009: see Pub Squash at 861; Ricegrowers Ltd v Real Foods Pty Ltd (2008) 77 IPR 32 ('Ricegrowers') at 43 per Rares J; Health World Ltd v Shin-Sun Australia Pty Ltd (2008) 75 IPR 478 at 489 per Jacobson J; and Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 79 IPR 174 at 181 per Tamberlin J.
81 The tort of passing off can be made out without proof of actual deception and without proof of any "actual, subjective intention to mislead" on the tortfeasor's part: see Red Bull at 372. It is sufficient that there be a misrepresentation that is likely to lead the public to believe that the tortfeasor's goods are those of the claimant. This is a question of fact that the court must decide, having regard to the relevant circumstances. In this case, these circumstances include the marketing, branding and get-up of NW's products and those of its competitors and the likely knowledge of potential purchasers in the market into which the parties' products are sold: compare Reckitt and Colman at 415.
82 Proof that the alleged tortfeasor deliberately sought to take the get-up (or other distinguishing feature) of the other trader's product is of evidentiary value in the sense explained by Dixon and McTiernan JJ in Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 ('Australian Woollen Mills')at 657 and, more recently, in Red Bull at 388 per Weinberg and Dowsett JJ. That is, if a get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it can be presumed that the appropriated get-up is fitted for the purpose and therefore likely to deceive or confuse. It remains, however, for the court to decide whether in fact there is a misrepresentation likely to lead the public astray as to the source of the goods. See also Telmak Teleproducts (Aust) Pty Ltd v Coles Myer Ltd (1989) 15 IPR 362 at 383 per Wilcox and Einfeld JJ; The Kettle Chip Company Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 ('Kettle Chip') at 162-163 per Burchett J; and WD & HO Wills (Australia) Ltd v Philip Morris Ltd (1997) 39 IPR 356 at 367 per Davies J. Further, as Pub Squash (discussed below) shows, passing off is not established merely because the alleged tortfeasor is found to have copied features of a competitor's product. The copying of elements of another's products "may indicate nothing more than realisation that the plaintiff has a useful idea which the defendant can turn to his own advantage, though not intending to pass off his goods as those of the plaintiff": see ConAgra at 345 per Lockhart J.
83 Sometimes the proven circumstances may support causes of action under Pt V of the TPA (which includes ss 52 and 53) as well as in common law passing off. As the Court said in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 ('Cadbury') at 418-419, despite their different origins and purposes, there is an overlap between these causes of action. A misrepresentation as to the source of a trader's goods is not only an element in the tort of passing off, it can also be conduct that is misleading or deceptive or likely to mislead or deceive for the purposes of s 52 of the TPA: see Mars Australia Pty Ltd v Sweet Rewards Pty Ltd ('Sweet Rewards') (2009) 81 IPR 354 at 360 per Perram J and Ricegrowers at 48 per Rares J. Equally, such a misrepresentation can amount to a relevant misrepresentation for the purposes of s 53(c) and (d). As the Full Court said in Cadbury at 418:
[T]rade indicia other than names and logos can become associated with a particular trader, such that a use by another trader could give rise to misleading and deceptive conduct or passing off. If particular branding elements used by a trader have been identified in a special way with that trader in the minds of members of the public, there may be misleading or deceptive conduct by reason of the appropriation of those particular branding elements by another trader.
84 Section 52 of the TPA provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Relevantly for present purposes, s 53 provides that a corporation shall not, in connection with the supply of goods represent that goods have sponsorship or approval that they do not have (para 53(c)); or represent that the corporation itself has sponsorship, approval or affiliation it does not have (para 53(d)). In substance, NW's case under the TPA is that, Baco, by using features of the packaging or get-up of the NW Product Range in the presentation of the Baco Product Range, misrepresented to consumers that: (1) Baco's products are the enhanced water products of NW; (2) Baco's products have the sponsorship or approval of NW; or (3) Baco has the sponsorship and approval of NW or is affiliated with NW.
85 As in the case of passing off, under the TPA, whether or not a representation is misleading or deceptive or likely to mislead or deceive is a question of fact, which must be determined by the court, having regard to all the relevant circumstances, including the history of the claimant's product, the circumstances in which the respondent's get-up was adopted, and the circumstances prevailing in the market at the relevant time. Further, in considering the statutory question, there are a number of well recognised principles to be borne in mind: see S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd (1998) 88 FCR 354 at 361-3 per Hill, RD Nicholson and Emmett JJ citing Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431 at 440-441 per Hill J. Chief amongst these is the principle that conduct may be found misleading or deceptive or likely to mislead or deceive notwithstanding that the respondent acted honestly and reasonably and did not intend to mislead or deceive. Should the court find that the respondent had such an intention, as in the case of passing off, the court may the more readily find that the conduct was in fact misleading and deceptive.
86 The latter proposition is, however, subject to much the same qualification as for passing off. As with passing off, the mere fact that one trader may have copied the design or get-up of another trader's product is not sufficient of itself to establish a contravention of ss 52 or 53 of the TPA, so long as the copyist has sufficiently distinguished its products and made it clear that they are not the goods of the trader whose design or get-up is copied: see Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (1999) 44 IPR 281 ('Dr Martens') at 367-369 (affirmed on appeal: see (1999) 95 FCR 136), citing Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 ('Puxu') at 196, 199-200 per Gibbs CJ, 209-210 per Mason J, 225-226 per Brennan J. In Dr Martens at 369-370, Goldberg J referred to a number of decisions, including Reckitt & Colman, in which the labelling of a product had been insufficient to prevent passing off, but held that the decisions were distinguishable on their facts.
87 As with passing off, whether or not impugned conduct is misleading or deceptive, or likely to mislead or deceive, is to be determined at the time the impugned conduct commenced, that is, in May 2009: see Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 ('Taco Bell') at 195-196 and 203-204 per Deane and Fitzgerald JJ; Thai Wood Import & Export Co Ltd v Shuey Shing Pty Ltd (1989) 17 IPR 289 at 302 per Gummow J; Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182 at 237 per Allsop J; Dr Martens at 363 per Goldberg J; and Natural Waters of Viti Ltd v Dayals (Fiji) Artesian Waters Ltd (2007) 71 IPR 571 ('Natural Waters') at 585 per Bennett J.
88 For the purposes of the statutory claims, in determining whether a misrepresentation has been made, the court must consider the effect of the impugned conduct on the "ordinary" or "reasonable" member of the class to whom the conduct is directed, rejecting reactions which are extreme, fanciful or capricious. As the Court in Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 ('Campomar') at 87 said, "[t]he initial question which must be determined is whether the misconceptions, or deceptions, alleged to arise or to be likely to arise are properly attributed to the ordinary or reasonable members of the classes of prospective purchasers". Much the same standard is applied in a claimed case of passing off in assessing whether a representation of the relevant kind was made and its likely effect on the potential purchaser: see Ricegrowers at 46. The ordinary or reasonable member of the class need not be particularly intelligent or well informed; equally he or she is not to be considered as if careless or indifferent to the matter in question: compare Australian Woollen Mills at 658.
89 The place of reputation in a claim under s 52 (and therefore s 53(c) and (d)) was explained by the Full Court in Cadbury at 418-419, where the Court said:
Whether or not there is a requirement for some exclusive reputation as an element in the common law tort of passing off, there is no such requirement in relation to Pt V of the Trade Practices Act. The question is not whether an applicant has shown a sufficient reputation in a particular get-up or name. The question is whether the use of the particular get-up or name by an alleged wrongdoer in relation to his product is likely to mislead or deceive persons familiar with the claimant's product to believe that the two products are associated, having regard to the state of the knowledge of consumers in Australia of the claimant's product.
90 As this passage shows, in considering the TPA claims in this case, one must focus on the statutory questions to which ss 52 and 53(c) and (d) give rise. When addressing these questions, the fact, if it be proven, that NW had a reputation in the feature or features allegedly appropriated by Baco such that the feature or features had become distinctive of its business or products is relevant to the answer the court gives. Unless NW had a reputation in May 2009 in the features of its packaging or get-up that it sought to protect, the use of those features by Baco is unlikely to convey the misrepresentations referred to in s 52 or s 53(c) and (d). In Sweet Rewards at 360, Perram J said much the same thing in a similar sort of case, when his Honour noted that reputation in a get-up or other features is not only essential for passing off, but important for a corresponding claim under s 52 of the TPA, because, in the case of s 52, "it is the reputation in those features which is the springboard for the argument that consumers are deceived by a particular imitation".
91 Thus, in order to establish passing off, or breach of ss 52 or 53 of the TPA, NW had to show that it had, as at May 2009, the requisite reputation in the feature or features of packaging or get-up that Baco had allegedly appropriated: compare Natural Waters at 585 per Bennett J. As to this, Baco argued that NW's claim failed because NW had not established any discrete reputation in those features as opposed to its overall get-up or packaging. This was because NW had not shown that Baco had appropriated any features that were distinctive of the NW Product Range within the enhanced water market. Absent the requisite reputation in these specific features, then, so Baco said, NW's passing off claim must fail. Further, without a showing of reputation, so Baco said, there could be no finding of relevant misrepresentation in breach of ss 52 or 53 of the TPA.
92 Natural Waters is illustrative of the difficulty of establishing reputation in get-up alone. The caseconcerned competitors in the bottled water market and, like this case, involved claims in passing off and under ss 52 and 53 of the TPA. The claimant argued that the respondent's bottled water shared the following features with its product: (1) use of a clear bottle with a recessed central body portion defined by protruding shoulders and base portions, with the label positioned in the recessed body portion; (2) use of a blue cap; (3) use of a colourful, tropical motif featuring tropical plants and other vegetation; (4) a three-dimensional effect created by having a partially transparent label on the front panel of the bottle revealing the inner side of the back label; and (5) prominent use of the word "Fiji": see Natural Waters at 575.
93 In dismissing the claims, Bennett J found that the claimant had failed to establish that these features had become individually distinctive of its product, or had come to be associated by consumers with it or its product: see Natural Waters at 579, 586. Her Honour explained (at 583):
The fact that Natural Waters may establish reputation in the Fiji Water get-up does not mean that it has a monopoly over each aspect of that get-up. The goods are ordinary articles of consumption. By their nature, goods of different manufacturers will bear some resemblance to each other. Water is sold in bottles, frequently in transparent bottles and commonly with blue caps. The marks, brands and labels play an important part in distinguishing the goods of one manufacturer from those of another: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 200; 42 ALR 1 at 7-8; 1A IPR 684 at 689-90 per Gibbs CJ. Whether the reason for the distinctiveness of Fiji Water is one or more particular aspects of its packaging or the totality of its get-up, the offending product will only mislead or deceive consumers where it has taken the distinctive aspect(s) or so much of the totality of the get-up that the overall impression or the 'gestalt' of the Fiji Water brand … is adopted.
94 Her Honour added (at 585):
The reputation which must be proved in a case such as this is that the get-up, packaging, shape, or trade dress relied upon is associated by consumers with the applicant's product. It takes a strong case to establish a reputation of this nature (Interlego [AG v Croner Trading Pty Ltd(1992) 22 IPR 65] at 103-4) as consumers will not necessarily associate a get-up with the applicant's product: Collins Debden Pty Ltd v Cumberland Stationery Co Pty Ltd (No 2) [2005] FCA 1398 at [33]-[34] per Lindgren J. The requisite reputation will more readily be found where the get-up is unique or striking rather than descriptive, mundane, merely functional, or in common use. (Emphasis added.)
95 In Natural Waters Bennett J accepted (at 590) that the applicant had sufficient reputation in the overall effect of its get-up to found an action in passing off or under s 52 (or s 53) of the TPA, but her Honour considered that, despite the similarities between the claimant's and the respondent's products, no reasonable consumer would be mislead or deceived into believing they were from the same manufacturer.
96 As stated above, I accept that, as at May 2009, NW had a reputation in the NW Product Range, but NW has not established that its reputation lay in the features it seeks to protect as opposed to its overall packaging or get-up, including its distinctive name and logo, which Baco has not sought to appropriate. NW has relied on a combination of features, which are said to be distinctive of the NW Product Range. Most of these features are shared with other competitors in the enhanced water market, particularly with vitaminwater, and, to a lesser extent, Smart Water. Most of the brands of the enhanced water products in evidence produced a rainbow-like effect of brightly coloured beverages when arranged appropriately. Most, if not all, enhanced water products presented their beverages in similarly bright colours. The numbers of variants in most brand ranges were similar. All enhanced water products were presented in clear plastic bottles and the principal traders used comparatively large wrap-around labels, with colour and white horizontal banding - the bright colour on the label complementing the colour of the beverage variety. The three principal traders each used light-hearted quirky comments on their labels too. All the enhanced water products in evidence had a 'wellness' theme. I am unable to accept that NW established such a degree of distinctiveness in the colours of the NW Product Range or any other feature, alone or together, that might have justified the proposition that it had a discrete reputation in those colours or some other feature.
97 As stated above, in the design of its own products, NW had copied many of the distinctive features of the US version of vitaminwater. By May 2009, a similar Australian version of vitaminwater had been on the market for well over a year and had become the market leader in terms of sales volume. It is, therefore, unsurprising that the features that might have been seen as distinctive of the NW Product Range in the Australian market before vitaminwater entered the market were no longer distinctive after vitaminwater had established itself there. This had clearly happened by May 2009. Other traders, such as Smart Water, had, moreover, by then entered the market and adopted many of the features that might previously have been thought characteristic of vitaminwater and NW.
98 In the circumstances of this case, the sales and marketing evidence adduced by NW cannot justify the conclusion that the features that Baco allegedly appropriated were, as at May 2009, associated by consumers with NW in particular as opposed to competitors in the enhanced water market generally. There is no room in such a case as this for a finding that NW has the requisite reputation in the features of the get-up on which it relies, because, when it first entered the market, NW substantially adopted the 'look and feel' or the 'gestalt' of the US version of the vitaminwater product and a local version of vitaminwater has since entered the Australian market.
99 On this analysis, NW's case fails from the outset, because it has not established the reputation, which is the first element in the tort of passing off; nor has it established the foundation upon which the misrepresentations referred to in ss 52 and 53 might be proved.
100 Even if NW had established a discrete reputation in a feature or features copied by Baco in designing its enhanced water products, for the purposes of the passing off claim, I would not be disposed to find that, on the balance of probabilities, Baco misrepresented to the public that its enhanced water products were products in the NW Product Range or came from the same source as the NW Product Range. Further, I would not be disposed to find that, on the balance of probabilities, a significant proportion of potential purchasers is likely to believe that Baco's products are the products of NW or that they come from the same source as the NW Product Range. Nor, for the purposes of the claims under ss 52 and 53 of the TPA, would I be disposed to find that, on the balance of probabilities, Baco, by using features of the packaging or get-up of the NW Product Range in the presentation of its products, misrepresented to consumers that: (1) Baco's products are the enhanced water products of NW; (2) Baco's products have the sponsorship or approval of NW; or (3) Baco has the sponsorship or approval of NW or is affiliated with NW.
101 The court must determine whether or not Baco has made any relevant misrepresentations to the public by launching its enhanced water products into the market "on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs": see Australian Woollen Mills at 659 per Dixon and McTiernan JJ. In this case, the court compares the effect of NW's enhanced water products, including their packaging, bearing in mind any reputation that NW has with respect to these products, and the impression likely to be made on the ordinary reasonable consumer when he or she has it in mind to purchase one of Baco's enhanced water products: see 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 10 IPR 289 at 306 per Gummow J.
102 Bearing in mind that the NW and Baco enhanced water products are not typically sold side by side, it is inappropriate to decide the matter of misrepresentation, including the likelihood of deceptive or misleading conduct, by putting the NW and Baco products side by side and comparing them. Further, these matters are not to be settled by close inspection and detailed argument. As Bennett J said in Natural Waters at 580 "[t]he determination of passing off and of contravention of the Act … is assessed as a matter of impression based on recollection", in this case of the get-up of the NW Product Range and the get-up of Baco's 'Grassroots' enhanced water products.
103 The fact that the goods are inexpensive is also relevant to the nature of the consideration that an ordinary reasonable consumer will give to the purchase. This case concerns the potential purchase of an inexpensive beverage, where an ordinary reasonable consumer is unlikely to engage in lengthy or detailed comparison of respective get-ups: see Natural Waters at 579 and Kettle Chip at 161. As the evidence of consumer confusion (such as it is) indicates, in choosing an enhanced water product, an ordinary reasonable consumer would probably choose fairly rapidly by reference to his or her preferred brand as indicated by packaging, name and logo. Indeed, products such as these, which appeal to a healthy life-style, may attract a higher degree of brand awareness and loyalty than that which attaches to less life-style orientated, but no less inexpensive, products.
104 In the context of the passing off claim made against it, Baco also relied on the proposition that the use of get-up that is common to the trade does not attract any liability. This proposition is accepted in this branch of the law: compare Ford v Foster (1872) LR 7 Ch App 611 at 628 per Mellish LJ, cited with approval by Lindley LJ in Reddaway v Bentham Hemp-Spinning Co [1892] 2 QB 639 at 643 and by Weinberg and Dowsett JJ in Red Bull at 371; Payton & Co Ltd v Snelling, Lampard & Co Ltd (1900) 17 RPC 48 ('Payton'); and W H Burford & Sons Ltd v G Mowling & Son (1909) 8 CLR 212 ('Burford'). The first use in a market of a particular get-up in a market does not confer monopoly or proprietary rights so long as any subsequent use by another trader is not likely to deceive the ordinary reasonable consumer into mistaking that trader's goods for the goods of another.
105 For a claim of passing off to succeed in a case where products generally resemble each other because of features common in the trade, the claimant must establish that the likeness between the claimant's goods and the alleged tortfeasor's extends to those features that otherwise distinguish the claimant's goods from others in the market: see Payton at 52 per Lindley MR. The decisions in Burford and Pub Squash are illustrative of the application of this principle.
106 In Burford, a soap manufacturer had been selling its laundry soap under the name "Signal Soap" in strawboard cartons about the size of a brick for twenty years. For four or five years, the defendants, also manufacturing soap, had packaged laundry soap, under the name "Tulip Soap", in long bars wrapped in strong paper, but, prior to the institution of the proceeding, had changed their packaging to cartons of exactly the same size, shape and material (although of a slightly different colour) to those used by the plaintiffs. There was evidence that the defendants had done so because they had seen the success of the plaintiffs and considered that using similar packaging would be advantageous to them too. The plaintiffs brought a proceeding for passing off, seeking injunctive and other relief. The defendants argued that they had a right to use the packaging, and that there was no similarity likely to deceive. O'Connor J said at 216:
There is no doubt about the law in such a case. Every trader has prima facie a right to put up his goods in any packages which he may think attractive and convenient, and in any method which he may consider suitable for the carrying on of his trade. But that right is subject to limitations. He must not use the registered trade mark of another, and he must not put up his goods in such a form as to be likely to deceive ordinarily intelligent persons into mistaking his goods for goods known in the market as manufactured, put up, or sold, by another. Subject to these limitations every trader has a right to use any material or any shape he may think fit for packing of his goods and for putting them on the market. The plaintiffs have no monopoly in the particular kind of packing which they have adopted. … It is a material of very common use for packages and is becoming of more common use for that purpose every day. The use of strawboard for packages is therefore open to the trade, and no one trader can acquire a monopoly of it. … But that which distinguishes the plaintiffs' packages from what is common to the trade is the large and distinctive lettering on the package 'Signal Soap'.
At 217, his Honour added that:
[W]here, as in this case, a certain method of get up, though open to all traders, has been for many years solely identified with the plaintiffs' goods in a particular market, it is incumbent on a trader, who adopts the same method of get up for the purpose of pushing his trade in a similar article in the same market, that he shall clearly differentiate his goods on the face of the package from those of the plaintiffs.
107 In Burford at 218-219, O'Connor J held that the special characteristic that distinguished the plaintiffs' soap from what was common to the trade was the description "Signal Soap" appearing in large letters on its face; and that while the defendants' packaging was of the same material, shape, size and colour and "general get up" as that of the plaintiffs' soap, the distinguishing characteristics of the two products - the names of the products printed on the cartons - were sufficient to make it "impossible for anyone who can see to mistake the defendants' package for the plaintiffs'"; and that this was so despite similarities in the "general shape and form of the lettering on the other sides of the packages." Accordingly, his Honour granted the defendants' motion for nonsuit. On appeal, Griffith CJ, Isaacs and Higgins JJ expressed their agreement with the decision and reasoning of O'Connor J and dismissed the appeal: see Burfordat 222-224.
108 In Pub Squash the trial judge held that the defendant had sought to take advantage of the plaintiff's success in developing its 'Solo' lemon squash soft drink by seeking to copy or approximate the formula for 'Solo' and by choosing a product name and get-up derived from and intended to gain the benefit of the plaintiff's advertising and get-up. Notwithstanding these findings, the trial judge found that there had been no relevant misrepresentation on the defendant's part because the defendant had sufficiently distinguished its product from the plaintiff's product and, accordingly, the plaintiff had not made out a case of passing off. Delivering the judgment of the Privy Council dismissing the appeal, Lord Scarman noted (at 861) that:
The [respondent's] intention was, not to pass off the respondent's goods as those of the appellants, but to take advantage of the market developed by the advertising campaign for 'Solo'. Unless it can be shown that in so doing the respondent infringed 'the plaintiffs' intangible property rights' in the goodwill attaching to their product, there is no tort: for such infringement is the foundation of the tort' [citing Hornsby Building Information Centre].
The law was designed, so Lord Scarman explained (at 858), to strike a balance between the protection of a trader's reputation and the need to keep competition free.
109 As Pub Squash and Burford show, the adoption by a trader of elements of get-up that appear to have been successfully used by a competitor is not new. Baco admitted that it had adopted certain design elements in its Baco Product Range that were shared with NW, but Baco argued that, as at May 2009, these elements were common to the enhanced water category in Australia.
110 I accept Baco's submission on this point. The features of NW's get-up that NW relied upon as distinctive were, as at May 2009, also used by vitaminwater and, to a lesser extent, by Smart Water. Moreover, a number of these features had been used by vitaminwater in the United States for some years before NW entered the market in Australia; and provided a design model that NW adopted for its own products when they entered the Australian market. Further, vitaminwater, with its similar get-up to NW (and to a lesser extent to Baco), had taken over from NW as the market leader in the Australian market.
111 As already stated, whether or not the colour and horizontal banding was appropriately described as a category signature is not the important point. The important point is that the banding, together with the use of bright wrap-around comparatively large labels corresponding to the colour of the beverage as viewed through a clear plastic bottle, and the use of a quirky comment, associated with a health-driven look, had become indicative of an enhanced water product by May 2009. By May 2009, there were a number of enhanced water products in the market having these features in common.
112 As noted earlier, most of the brands of enhanced water products in evidence produced a rainbow-like effect of brightly coloured beverages when placed appropriately together; and the colour of each variant was emphasized by the use of bright colours on the labels. I am unable to accept that, by using similarly bright colours in a similar way, or by using any of the other features to which NW pointed, Baco misrepresented to the public that its enhanced water products were products in the NW Product Range or came from the same source as the NW Product Range. Further, I do not accept that an ordinary reasonable consumer would be likely to believe that Baco's products were the products of NW or that they came from the same source as the NW Product Range.
113 Seen from the perspective of the ordinary reasonable purchaser, in a retail environment, the enhanced water products of NW and Baco would look different in a number of material respects, especially having regard to the branding, name and logo. In the case of the Baco 'Grassroots' products the prominent 'G' logo, coloured the same shade as the beverage variant, would stand out against a mainly white background constituting the top border of the label. The distinctiveness of 'Grassroots' enhanced water products, as compared with their competitors, is reinforced by a moderately large green grass band running through the centre of the label. The registered mark 'grassroots', which runs vertically down the top white band is clearly visible. The name and logo appear on each of three panels on the bottle label and would therefore be visible to the consumer no matter how the bottle was placed on a retailer's shelf, whether in or out of a refrigerator.
114 In the same way, the distinctive black and white 'NW' logo can be seen no matter how the bottle is placed on the shelf. This was, moreover, the effect of Mr Dennis' evidence because Mr Dennis agreed that, since the NW logo appears on all three panels of the label, it is almost impossible to have a NW enhanced water product located in a store without the name and logo being visible to the potential purchaser.
115 The evidence in this case shows that the branding of products in the enhanced water market is significant because potential purchasers are likely to understand and accept a brand as denoting a trade source. There was sufficient evidence to show that potential purchasers were likely to have relevant brand awareness.
116 In the period leading up to May 2009, NW regularly marketed and promoted its enhanced water products by reference to the 'NutrientWater' name and logo. In so far as Mr Dennis gave evidence to the contrary, I do not accept it. As Mr Dennis ultimately conceded, "if you were buying the NutrientWater product you would expect to see the name 'NutrientWater' or the logo on the product".
117 Especially following the entry of vitaminwater and other brands of enhanced water products into the Australian market, advertising and other promotional activities have been designed to make consumers brand-aware. The rapid and significant success of vitaminwater, as well as the growth in NW's sales, is indicative of the success of these activities. In such a market, it may reasonably be assumed that the ordinary reasonable purchaser would be alive to the differences between the branding, name and logo of the NW Product Range and Baco's enhanced water products, as well as those of their competitors. Given that the branding clearly differentiates the Baco Product Range from the NW Product Range, it is not probable that the ordinary reasonable consumer would be mislead or deceived into believing they were all NW's products or from the same trade source; or that Baco has the sponsorship or approval of NW or is affiliated with NW. It is worth noting that, in a case of this kind, before likely misleading or deceptive conduct can be established under s 52 of the TPA, it is not enough that "particular conduct causes confusion or wonderment"; rather there must be conduct that is misleading or deceptive or likely to mislead or deceive: see Campomar at 87, quoting Taco Bell at 137. NW has failed to establish that this is a case of the latter kind.
118 I find that, as at May 2009, the NW Product Range was distinguished from other products in the enhanced water market by its branding (including its name and logo), and not by the other features of get-up on which it relied. In this circumstance, Baco's 'Grassroots' enhanced water products did not convey any representation of association with or sponsorship by NW. This conclusion is entirely consistent with the evidence of Mr Mark Epstein and Mr Lee that Mr Epstein provided samples of competitors' products, including the NW and vitaminwater products, with the express instruction that Baco's labels were clearly to distinguish Baco's products from those of its competitors.
119 The evidence as to intention in this case contrasts with the findings made in Cat Media Pty Ltd v Opti-Healthcare Pty Ltd [2003] FCA 133 ('Cat Media') and Red Bull. The Court in both cases expressly found that the respondent had designed its product with the intention of misleading consumers.
120 In Cat Media, Branson J considered two products sold in very similar packaging under the names 'Fat Blaster' and 'Fat Terminator'. Her Honour found that the Fat Blaster packaging "was highly distinctive in the weight loss supplement market when the product was launched" and that "the applicant ha[d] 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": see Cat Mediaat [13], [17] and [43]. Further, her Honour considered that the respondent's product presented as "having many similarities with the Fat Blaster box and as sharing few features with the packaging of the other products of the respondent or ... other products competing in the same market": see Cat Mediaat [36]. Accordingly, her Honour held that the applicant had established its claims in passing off and under s 52 of the TPA. In doing so, Branson J emphasised (at [51]) that this conclusion was based on the significant similarities between the competing products; "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". In both Red Bull and Cat Media there were findings of deliberate copying by the respondent with intention to deceive: see Cat Media at[33] and Red Bull at 365.
121 The evidence of Mr Mark Epstein, corroborated by Mr Lee, was that the design of Baco's 'Grassroots' enhanced water products was intended to be distinctive, and differentiate the products from Baco's competitors, whilst being referable to the enhanced water market. I accept this evidence, which was fully supported by the documentary record. Further, Baco's use of the 'Grassrooots' name and logo to differentiate its enhanced water products from others was consistent with its use of this name and logo on its corporate stationery and the cartons in which the Grassroots products were packed for delivery to distributors and retailers.
122 I find that there was no intention on Mr Epstein's (or Baco's) part to deceive or mislead consumers into believing that Baco's goods were, or were relevantly associated with, NW's products. On the contrary, by its product branding, Baco sought to distinguish its products from its competitors in the enhanced water market.
123 Plainly enough, Baco sought to benefit from the success of the NW Product Range and the vitaminwater products in the Australian market. It was for this reason that Baco selected a get-up that emulated various characteristic features of other enhanced water products. Having regard to the circumstances prevailing in the enhanced water market by May 2009 (including its history and development, marketing and advertising, NW's branding, get-up or packaging and the branding, get-up or packaging of other traders), the likely knowledge of potential purchasers in the enhanced water market and likely impression on them of the get-up of the NW Product Range and the Baco enhanced water products, the circumstances in which Baco adopted its product get-up, and such other relevant considerations as have been mentioned, I find that Baco's enhanced water products were sufficiently differentiated from the NW Product Range as not to be likely to deceive or mislead potential purchasers or consumers as to the products' trade source or trade association.