Conclusion
99 The first and most important issue to be determined is whether the applicant has established that the respondent, by its advertising and signage, has falsely represented the existence of a connection, or association, between the applicant's restaurant and its own.
100 In my opinion, the respondent's use of the two Chinese characters that make up the name "Mei Qian" when read by a Chinese-speaking person, and "Ajisen" when read by a Japanese-speaking person, gives rise to a representation that the two restaurants are connected or associated in some way. Indeed the use of those characters constitutes a representation that the respondent's restaurant has "sponsorship" or "approval" that it does not have.
101 In arriving at that conclusion, I have not compared the signs, and their respective Chinese characters, side by side. Although this is not a trademark case, the principles that govern the question of deceptive similarity in that context appear to me to be relevant in the present context. The question is one of impression, based on "recollection of the mark": Melbourne Chinese Press Pty Ltd v Australian Chinese Newspapers Pty Ltd [2004] FCAFC 201 at [16].
102 That representation is false. It is likely to mislead or deceive at least some members of the public in sufficient numbers to satisfy the requirements of s 52. In arriving at that conclusion, I am conscious of the fact that there is a distinction between the likelihood that a person may be confused, and the likelihood that that person may be misled. Evidence that particular persons have been confused does not in itself explain why that confusion has occurred. In My Kinda Town Ltd v Soll and Another [1983] RPC 407, Lord Justice Oliver emphasised that confusion per se does not give rise to an action for passing off. The action is based on a misrepresentation by the defendant, whether deliberate or unintentional, that the goods or services which he offers are those of the plaintiff or are connected with the plaintiff. A similar approach may be taken in relation to s 52.
103 I accept the evidence of all of the applicant's witnesses who have eaten at its restaurant on a regular basis that they have come to know it by the name "Mei Qian". A number of them know it by that name alone. I do not think it appropriate to compare, and contrast, the entirety of each sign on a logo by logo basis, or on a character by character basis. The evidence seems to me to establish that a Chinese-speaking patron would not look at these signs on a "word by word" basis, but would rather focus upon the first, and key, components of the name, "Mei Qian".
104 I also accept the evidence of at least some of those witnesses that upon seeing the sign outside the respondent's restaurant, they immediately concluded that the respondent's restaurant was connected to or associated with that of the applicant. Others merely "wondered" whether that was so, and probably were not relevantly misled.
105 It is true that there was a substantial body of evidence led by the respondent that suggested that no such link would be drawn by Chinese-speaking patrons. These witnesses said that they were in no way misled by the fact that the signage for the new restaurant contained the same two Chinese characters as the signage for the applicant's restaurant. However, it seems to me to be significant that most of the witnesses who gave evidence of this nature on behalf of the respondent were familiar with the Ajisen Ramen chain of restaurants overseas. In many cases they spoke English as well as Chinese. Such persons are far less likely to be misled, or even confused, by the use of the same Chinese characters having regard to the very different logos and signage used by the two restaurants. They will not conclude that there is any connection or association between them.
106 However, it is not that group that is likely to be misled or deceived. It is, rather, the members of the Chinese community that is likely to be misled who are primarily reliant upon Chinese as their effective means of communication, who speak little or no English or Japanese, and who have never come across the Ajisen Ramen chain before. In addition, it may include a smaller group who only speak Japanese, and not Chinese or English. Persons in this category may see the four Chinese characters on the applicant's sign, all of which they can understand, and associate them with the combination of Kanji and Katakana characters on the respondent's sign, thereby concluding that there is a link between the two restaurants. I should emphasise, however, that my judgment in this matter is not based upon this latter group as no evidence of this kind was led before me.
107 The applicant's restaurant bases its goodwill largely upon recommendations by its patrons. It is not difficult to see how a Chinese-speaking patron who speaks little or no English or Japanese, to whom a recommendation regarding the applicant's restaurant has been made, and who decides to eat there, could be misled by the respondent's signage into thinking that the respondent's restaurant is in fact the "Mei Qian" restaurant at which that person wishes to dine.
108 The chance that such a person might be misled is increased by the fact that both restaurants serve Japanese food, are in close proximity, and purport to specialise in ramen noodles although their menus suggest that many other dishes are available.
109 Indeed, the prospect that the applicant may lose some potential customers who are misled by the respondent's signage is further enhanced by the fact that, in the ordinary course, patrons are likely to approach the two restaurants from Swanston Street, and will therefore arrive at the respondent's restaurant before they have any real opportunity to see the applicant's restaurant. As such, more patrons are likely to enter the respondent's restaurant in the mistaken belief that it is the applicant's restaurant than vice versa. In addition, it is possible that they will remain there even if they discover that the respondent's restaurant is not the restaurant to which they were actually recommended.
110 It seems to me that there is another group of prospective patrons of the applicant's restaurant that is likely to be misled by the respondent's use of the Chinese characters in its signage. That group consists of those who have eaten regularly at the applicant's restaurant, and who happen to notice the respondent's restaurant's signage, or its proposed advertisements. It is likely, in my view, that at least some members of that group will assume that there is a connection between the two restaurants. They may try the respondent's restaurant because they have enjoyed the meals they have eaten at the applicant's restaurant in the past. These patrons may be lost to the applicant forever.
111 It was submitted on behalf of the respondent that no sensible person could possibly conclude that there was a connection between the two restaurants merely because they both have on their signage the Chinese characters "Mei Qian". I reject that contention. A number of witnesses gave evidence before me that this was precisely the conclusion that they had arrived at, and I accept their evidence as truthful. I do not regard them as persons devoid of common sense. Nor do I accept that they wilfully closed their eyes to the differences in the signage between the two restaurants. It is not unreasonable that those who speak only Chinese would refer to Chinese restaurants by their Chinese names. It is not unreasonable that they would focus upon those names, and ignore or attach little weight to logos, or differences in the English names, which they cannot in any event read or understand. In any event, putting to one side logos on well-known chains such as "McDonald's", I doubt that logos of the kind displayed on these two restaurants would create any lasting impression. It is worth recalling the evidence given by Mr Chan in re-examination that not all restaurants that are linked, and operate under the same name, use the same signage and logos.
112 I accept that the numbers of prospective patrons who are likely to be misled by the common use of the Chinese characters will not be great. On the other hand, that number may not be insignificant when considered from the perspective of the applicant. I reject the respondent's submission that the numbers in question should be characterised as minuscule because they must be viewed against the entire class of potential restaurant patrons throughout greater metropolitan Melbourne. It seems self-evident that a representation conveyed by the use of Chinese characters cannot be communicated to anyone who cannot read those characters. It follows that the class of potential restaurant patrons who might be misled is essentially confined to those who speak and/or read only Chinese. Understood in that context, the proportion of the applicant's present and prospective customer base that might be misled, though not great, could nonetheless be significant.
113 I reject the respondent's contention that the name "Mei Qian" is used only in a descriptive sense. "Mei Qian" is a composite expression and is the name by which the applicant's restaurant is generally known within large sectors of the Chinese community. The reputation that the restaurant has built is linked to that name, and any use of the same name by a nearby Japanese restaurant is likely to be misleading to some patrons. I note in that regard the very different circumstances that prevailed in Monaco Willows Pty Ltd v Greenbax Pty Ltd (1996) 36 IPR 387, where Merkel J concluded that the use of the name "La Piazza" by an Italian restaurant in Templestowe did not constitute misleading or deceptive conduct, or passing off, in relation to the applicant's three takeaway Italian food outlets located at Box Hill Central, Northland and Australia on Collins shopping centres. The risk that there will be a significant diversion of trade from the applicant's restaurant in this case goes much further than the risk of minor confusion on the part of a handful of persons in that case.
114 I also reject the respondent's contention that the applicant does not come to this Court with "clean hands". There is no satisfactory basis upon which I can conclude, on the evidence before me, that when Eddy Sinn chose the name "Mei Qian" he had in mind, whether consciously or subconsciously, the signage of the Ajisen Ramen chain, including its use of the Kanji characters for "Ajisen". His evidence was that the idea for the name "Mei Qian" probably came from a Chinese magazine. Whether or not that was so, that statement cannot fairly lead to a finding that the applicant borrowed the name from the Ajisen Ramen chain.
115 That leads me to the final issue to be determined. Having concluded that the respondent has engaged in misleading or deceptive conduct, and thereby contravened s 52 and s 53(c), and has possibly also committed the tort of passing off, to what relief, if any, is the applicant entitled?
116 By its application, the applicant claims declaratory relief, injunctive relief, damages and orders for delivery up by the respondent of all materials which the respondent has used, or proposes to use, in engaging in the conduct that is said to be misleading or deceptive. In reality, however, the only remedy actually sought during the course of the trial was an injunction restraining the respondent from continuing to use the Kanji characters for "Ajisen".
117 The injunction that was originally sought was couched in terms that would have restrained the respondent from advertising, marketing, or operating a Japanese restaurant at 130 Bourke Street Melbourne, or anywhere else in the greater Melbourne metropolitan area, under or by reference to the names "Mei Qian", or "Ajisen Ramen", or the Chinese characters currently depicted on the sign outside the respondent's restaurant. In addition, it was sought to restrain the respondent from using any names that were "misleading or deceptively similar thereto and/or to the Chinese characters" that make up the name "Mei Qian La Mien" currently depicted on the signage of the applicant's restaurant.
118 An injunction framed in such broad terms would obviously be inappropriate. It would go far beyond the applicant's legitimate concerns that its customers would be diverted to the respondent's restaurant. Mr Clarke readily acknowledged that this was so during the course of argument. He submitted, however, that I should grant a more tightly framed injunction, and he argued that nothing short of an injunction prohibiting the use of the Kanji characters would be effective.
119 The power to grant injunctive relief for contraventions of the Act is contained in s 80. Section 80(1) provides that where the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes, inter alia, a contravention of a provision of Pt V, the Court may grant an injunction in such terms as it determines to be appropriate. Section 80(4) provides that the power of the Court to grant an injunction may be exercised whether or not it appears that the person intends to engage again, or to continue to engage, in conduct of the kind in question, whether or not that person has previously engaged in conduct of that kind, and whether or not there is an imminent danger of substantial damage to any person if that person engages in conduct of that kind.
120 It is clear that s 80 does not confer upon the Court an arbitrary discretion. Moreover, to require, rather than permit, the Court to grant an injunction once a contravention has been established would deny the Court the power to adapt the remedy to the needs of the case, and would lead to injustice: Mikasa (NSW) Pty Ltd v Festival Stores (1972) 127 CLR 617 at 651 per Gibbs J.
121 The principles which govern the Court's discretion to grant injunctive relief are well-established. Those principles are helpfully set out in ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 256-257 per Lockhart J and at 267 per Gummow J. While actual or likely damage is not a jurisdictional requirement by virtue of s 80(4), it remains relevant to the exercise of discretion.
122 There are many examples of cases where breaches of various kinds have been proved, but injunctive relief has been refused in the exercise of the Court's discretion. See for example Trade Practices Commission v Gold Coast Property Sales Pty Ltd (1994) 49 FCR 442; Australian Competition and Consumer Commission v Health Partners Inc (1997) 151 ALR 662; Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2001) ATPR 41-802; Australian Competition and Consumer Commission v Danoz Direct Pty Ltd (2003) 60 IPR 296.
123 It is obvious that a final injunction should not be expressed in terms which are too broad. It should bear upon the case proven. There must be a nexus between the conduct found to constitute the relevant contravention and the injunction granted. The Court must ensure, so far as it can, that its orders are certain, and provide clearly for what the parties affected by them are bound to do or refrain from doing. There is a useful analysis of the relevant principles in Trade Practices Commission v GLO Juice Co Pty Ltd (1987) 73 ALR 407.
124 Although a competitor has standing to take action under s 52 in relation to conduct closely akin to passing off, the right conferred upon the competitor is a right to enforce a provision of the Act. It is not a private right to protect the competitor's reputation.
125 It is important to note that s 87(1) provides that, without limiting the generality of s 80, where the Court finds that a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by the conduct of another, it may make such order or orders as it thinks appropriate against the person who engaged in the conduct or was involved in the contravention if it considers that this will compensate in whole or in part for the loss or damage, or prevent or reduce that loss or damage. The subsection applies to proceedings instituted under Pt VI. This is such a proceeding. The section confers a wide power upon the Court to make remedial orders. That power is not fettered by any express terms, but it is nevertheless permissible for the Court to have regard to equitable and other principles that are established in other contexts.
126 Section 87 allows for a broad range of possible orders: see generally Deane v Brian Hickey Invention Research Pty Ltd (1988) 11 IPR 651 at 656 per Burchett J and Akron Securities v Iliffe (1997) 41 NSWLR 353. Among the orders that it permits, pursuant to s 87(2), are orders declaring contracts void, orders requiring the refund of money or the return of property, orders directing the payment of money, orders directing the repair of goods that are defective, and orders requiring the supply of specified services.
127 It is not immediately obvious whether the orders referred to in s 87(2) are intended to be read as an exhaustive list of the orders that can be made under s 87, or whether there is some flexibility built into ss 87(1) and (1A) to enable orders to be tailored to meet the exigencies of particular cases.
128 There is no general power conferred upon the Court to order what might be described as "corrective advertising". The Court has power under s 86C to make an order requiring a person to publish, at the person's expense, and in the way specified in the order, an advertisement in the terms specified in, or determined in accordance with, the order. However, only the Australian Competition and Consumer Commission ("the Commission") can apply to have that section invoked: see generally ACCC v Kaye at [203]-[205]. Section 86C(3) provides that s 86C does not limit the Court's powers under any other provision of the Act.
129 It seems clear that the power conferred upon the Court to grant injunctive relief under s 80 is sufficient to allow the Court to order a form of corrective advertising if that is appropriate to meet the needs of the particular case. In Janssen Pharmaceutica Pty Ltd v Pfizer Pty Ltd (1985) 6 IPR 227 Burchett J determined at 237-238 that power existed under s 80 to issue a mandatory injunction requiring the respondent to publish what was in effect corrective advertising. I consider, with respect, that his Honour was entirely correct in arriving at that conclusion. I note that in Mundine v Layton Taylor Promotions Pty Ltd (1981) 51 FLR 73 Ellicott J expressed doubt (at 77) whether the Act, as it then stood, empowered the granting of relief of this kind in an application not made by the Minister or the Commission. However, as Burchett J observed, the problem was that s 80 then authorised the making of orders of carefully defined types, which did not include corrective advertising, while s 80A specifically empowered the Court to make such an order but only on the application of the Minister or the Commission.
130 Section 80 is now cast in general terms and should be regarded as enabling the Court to tailor any injunction to ensure that the objects of s 52 can be achieved without causing disproportionate prejudice to a respondent who may inadvertently have contravened the section. If the real vice in the present case is that a small but significant number of customers will be diverted from the applicant's restaurant by being misled into thinking that there is a connection between the two establishments, or that the respondent's restaurant is in fact operated by the applicant, one solution to that problem is to require the respondent to take practical steps to ensure that this does not occur.
131 There is of course a difference between corrective advertising, whether ordered pursuant to s 87 or s 80, and an injunction that prohibits the continuation of misleading or deceptive conduct. In some cases, corrective advertising will operate as a compensatory measure to prevent loss flowing from the misleading or deceptive conduct. In that sense the remedies available under these sections may be regarded as conceptually distinct. It may even be thought that s 87(1) is the more appropriate basis for a mandatory order compelling what is in substance a form of corrective advertising.
132 It would of course be possible to ensure that no prospective patron is misled into thinking that there is a connection between the two restaurants by preventing the respondent from using the offending characters in its signage. The applicant contends that nothing less than an order in those terms would suffice. It is necessary, however, to bear in mind that the applicant is not entitled to injunctive relief as of right. The grant of that relief is discretionary. In addition, the applicant is most certainly not entitled to be protected from lawful competition. The fact that a Japanese ramen noodle restaurant is about to open, virtually next door to the applicant's restaurant, may mean that the applicant will lose significant custom. Neither s 52, nor the tort of passing off, operates to provide any redress in relation to such loss.
133 The present case is unusual in that the two Chinese characters that make up the word "Mei Qian" also happen to be used as Kanji characters in the Japanese word "Ajisen". In addition, those characters have the same meaning in both languages. The evidence suggests that the problem that the applicant faces by reason of the respondent's proposed use of those characters could be overcome, in a practical sense, by requiring the respondent to make it absolutely clear to anyone contemplating eating at its restaurant that there is no connection between the two establishments.
134 I note that the applicant suggested that the respondent could retain the name "Ajisen" but avoid using Kanji characters, and use Katakana or Hiragana script instead. However, the evidence is that "Ajisen" must be written in Kanji, or it will not be recognised as having the meaning "taste thousand" that is traditionally associated with the Ajisen Ramen chain. I accept that evidence.
135 I should add that there is no basis for any finding that the respondent has sought to copy, or reap the benefit of the applicant's restaurant's reputation, by using the Kanji characters. As previously indicated, the use of those characters is standard for all Ajisen Ramen franchise restaurants.
136 In summary, I am satisfied that the harm that the applicant might suffer if the respondent were to use the offending characters in its signage would not be great, and could substantially be overcome by ensuring that steps were taken to prevent prospective patrons from being misled. It would be wrong, in my view, to grant injunctive relief that went well beyond the needs of the case, and cause significant and unnecessary harm to the respondent in circumstances where a ready alternative form of relief is available. There is no reason why the respondent should be prevented from using the Kanji characters that have long been associated with the Ajisen Ramen franchise. Substantial expense has already been incurred in preparing for a fit-out and operation of the respondent's restaurant using crockery and other paraphernalia bearing the Ajisen lettering and logo. That expenditure would be thrown away if the injunction sought by the applicant were granted.
137 I take into account the fact that Irene Lau denied that she had any ulterior intent in opening her restaurant in close proximity to that of the applicant, and I accept her evidence. She claimed that she was unaware that the applicant's restaurant had the Chinese characters "Mei Qian" on its signage until she received a letter from the applicant's solicitor informing her of that fact on or about 4 September 2004, and there is no reason to disbelieve her. It is really only the fact that the two restaurants are near each other that creates the risk that there may be some diversion of trade from the applicant's restaurant. I would not regard that risk, or the level of harm that the applicant would be likely to sustain, as sufficient to warrant restraining the respondent from using the Kanji characters as part of its signage as proposed.
138 On the other hand, I consider that the applicant is entitled to some protection against the risk that a number of prospective customers might be misled into thinking that there is a connection between the two restaurants. Steps can be taken to prevent that from happening. Customers should be made aware of the fact that there are no links whatever between those restaurants, and that anyone wishing to dine at the applicant's restaurant will find that restaurant at 122 Bourke Street, and not at 130 Bourke Street.
139 In my view, this object can readily be achieved by requiring the respondent to display, for an appropriate period, in a prominent location, and clearly visible from the exterior of its restaurant, signs written in both Chinese and Japanese that make it clear that the two restaurants are not in any way connected or associated. I also consider that a similar disclaimer should be included in all of the respondent's advertisements.
140 As foreshadowed during the hearing, I propose to hear the parties further regarding the form that any such orders should take. I also propose to hear the parties regarding the costs of this proceeding.
I certify that the preceding one hundred and forty (140) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg.