The evidence of Professor G R Dowling
14 Professor Dowling gave opinion evidence, which was admitted subject to the respondent's objection, and thus subject to its relevance being established (to which I shall return), as follows:
· Consumers "buy - and may form relationships with - brands rather than products per se". Brands provide a "shorthand" device or means to help simplify consumers' product choice decisions. Consumers form associations between the names, logo and/or other branding elements of a brand on the one hand and, on the other, both tangible (e.g. product type) and intangible attributes of the brand.
· Brand recognition-based choice occurs for many people in many low-risk, low involvement, impulse consumer purchase situations, such as the purchase of a magazine. In a narrowly defined product category (like homemaker magazines) where a consumer buys on impulse, and many of the brands have similar names, there is the potential for the consumer to confuse brands with similar names - either by their inability to recall correctly a brand name prior to purchase, or to recognise it at the point of purchase. A new brand entering such a market might well capitalise on this situation by using a name that looks and/or sounds like a more established brand (a tactic of "false recognition").
· Brand extension (of either the line extension or the category extension type) is common, and are now familiar to consumers. In the music and publishing industries, one type of line extension is to create a "best of", or other form of compilation of, an artist's or author's previous works.
· Contemporary marketing practice is based on the central idea of offering different groups (segments) of customers a different "offer", as a blend of the product, price, promotion and sale location, depending on a combination of demographic, behavioural, and situational factors.
· Based on the circulation and readership figures, the applicant has established a "market-leading brand" in the Australian homemaker magazines market, namely "HOME BEAUTIFUL". This brand has developed a "very considerable reputation" ("brand equity") with Australian consumers, as the likely result of "a combination of a distinctive 'banner' title or masthead, extensive promotion, wide retail distribution, long-term sales and word-of-mouth effects".
· The "HOME BEAUTIFUL" brand is likely to be known and recognised by Australian consumers by reference to the following factors:
q Its brand name "HOME BEAUTIFUL" or, alternatively "AUSTRALIAN HOME BEAUTIFUL".
q The positioning of this name in prominent typeface in the upper section of the front cover, one word beneath the other (i.e. "HOME" above, "BEAUTIFUL" below) with greatest [sic] prominence given to the word "HOME".
q The typeface being a sans serif font, in lower case, stretched vertically, especially in the case of the word "HOME".
q The entire background of the front cover being comprised of a different photograph of a contemporary home interior for each issue, such image being likely to convey an impression of an affluent home owner.
q Availability in most newsagencies, merchandised with other homemaker's magazines and sometimes given relative prominence within this category by being placed in the high-volume stacks near the front of the relevant store section as well as being placed at or near eye level in racks.
q A current retail price in the vicinity of $5.90.
· Upon the assumptions that the "25 BEAUTIFUL HOMES" magazine was launched into the Australian market on 4 December 2002 and is being sold widely throughout Australia in newsagencies, a significant number of consumers will perceive it to have a similar overall brand identity to that just described in relation to "HOME BEAUTIFUL", namely:
q Its brand name "25 BEAUTIFUL HOMES".
q The position of this name in prominent typeface in the upper section of the front cover, one word beneath the other (i.e. "BEAUTIFUL" above, "HOMES" below) with greatest [sic] prominence given to the word "HOME" and the number "25".
q The typeface being a sans serif font, in upper case.
q The entire background of the front cover below the white band being comprised of a photograph of a contemporary home interior, such image being likely to convey an impression of an affluent home owner.
q Availability in most newsagencies, being merchandised with other home-maker's magazines and, because it is a new magazine, it may be given relative prominence within this category by being placed in the high-volume stacks near the front of the relevant store section.
q A current retail price of $6.95.
· A significant number of consumers already familiar with the applicant's brand "HOME BEAUTIFUL" are likely, if exposed to the "25 BEAUTIFUL HOMES" magazine in its current get-up, to believe it to be a magazine from the same source as "HOME BEAUTIFUL", since -
q The choice and range of magazines promoted for sale in Australia, including homemaker magazines, is almost overwhelming today.
q Magazine choice is mostly a self-service activity and the role of the newsagent in the choice process is minimal.
q Faced with a wide choice of magazines in a self-service environment, many consumers inevitably attempt to simplify the processing of information and decision-making.
q Such consumers tend to look for magazine brands that they know, and, in doing so, they scan the store shelves for visual cues by which they recognise such brands. In this mode, consumers: (a) respond to the overall form of, or impression created by, a magazine's packaging; (b) make inferences about a magazine based on the overall form or impression, rather than actively considering all detailed elements of the publication - for example, few consumers would check the actual publisher of the magazine, information about which is generally in small print several pages into the magazine; and (c) do not attend closely to, and hence may not perceive, elements that might not exactly fit into the impression they might have previously formed.
· Many consumers in this category are known as "variety seekers", who look forward to reading and viewing the contents of homemaker magazines for the range of new or innovative ideas presented each month or periodically. In response to such variety-seeking behaviour, publishers strive to vary their magazines each issue, often adopting different foci, styles and particular subject matters. Such variation in magazines from edition to edition, in combination with variety-seeking behaviour on the part of the consumers, means that consumers are forced to rely substantially on brand name and banner style as cues to recognise the brand of magazine they seek. Given the diversity of competing magazines and significant variation in content of each edition for each of these magazines, consumers cannot rely on the vast majority of the cover page of a magazine if they are to be able to recognise the magazine they seek. Furthermore, with shelf displays of so many magazines often overlapping, consumers when approaching the shelf are often only able to see the top banner section of each magazine, reinforcing the central importance of this part of the front cover in the consumer recognition process.
· Accordingly, given the obvious similarity in name and title layout of the two magazines, a significant number of consumers who are making a rushed magazine purchase may mistakenly believe the "25 BEAUTIFUL HOMES" magazine to be one and the same as the "HOME BEAUTIFUL" magazine.
· Additionally, magazine publishers commonly release special issues under the magazine title or a variation of it. There are various formulations of this evident in the market, including:
q Special one-off issues, sometimes called collector editions, including premium content drawn from previous issues often referred to as "best of" collections.
q Special semi-regular issues, such as Christmas or summer editions.
q Permanent titles related in name, known in marketing as brand extensions, such as the fashion magazine "VOGUE" and its home-maker relation "VOGUE LIVING".
· Newsagents and consumers are aware of, and have come to expect, these special editions or brand extensions of well-known magazine brands. As such, they have become accustomed to looking for, and interpreting, relationships between titles, whether implicit or explicit.
· For both the more discerning, and the rushed, homemaker magazine buyer who sees both magazines in the same section of the newsagency, the "25 BEAUTIFUL HOMES" magazine title is likely, for a significant number of consumers, to be interpreted as a special edition of the "HOME BEAUTIFUL" magazine, possibly as a one-off "special", or "best of", edition of twenty-five of the best houses profiled in previous issues, or as a semi-regular seasonal or Christmas edition, whereby periodically a "best of" range will be profiled, assuming that the contents of "25 BEAUTIFUL HOMES" is similar, if not identical, to that of "HOME BEAUTIFUL".
· A range of different consumer segments and buying scenarios in which some consumers are particularly likely to be misled or deceived is indicated:
q Where a significant proportion of readers read a copy of such magazines bought by other persons, and less frequently purchase magazines themselves, at which time they rely heavily on their memory of magazines previously read but not retained in their possession.
q Where there is no opportunity for side-by-side comparison in a particular newsagency, or even where such opportunity exists but "clutter" at the shelf reduces the likelihood that consumers, particularly those in rapid purchase decision mode, will see the comparison
q Where both the applicant's magazine and the respondent's are displayed in close proximity, increasing the likelihood of the consumer perceiving that the respondent's magazine is a "best of" edition of applicant's magazine.
q Where consumers, particularly in the cases of newly released magazines such as the respondent's, tend to "try before they buy" and leaf through such a new release, examining the contents; the content that is of the greatest significance is the display photographs of the "featured" homes and interiors; if the content they are perusing (of this nature in particular) is similar to that of the applicant's past editions, or if similar or the same houses are featured, then the probability of confusion or error in assuming the two publications are of the same origin increases accordingly.
· This conclusion follows notwithstanding a number of differences present in the get-up of the "25 BEAUTIFUL HOMES" magazine, namely:
q The use of the number "25" as a prefix, noting, however, the frequency with which numbers are displayed prominently on magazines in this category to indicate to prospective purchasers, or readers, the quantum of ideas or entries within the magazine. For example, the front cover of the April 2001 edition of "HOME BEAUTIFUL" boldly advertises "10 best ever colour combinations"; in the March 2002 issue there appeared on the front cover "101 kitchen & bathroom ideas"; in the April 2002 issue there appeared "218 homewares under $100"; and in the July 2001 issue it was "10 secret rules of decorating like a pro".
q The reversal of the words "BEAUTIFUL HOMES" from "HOME BEAUTIFUL", with the effect that the respondent's version is more descriptive and generic, whereas the applicant's version is unusual and distinctive due to its reversed form, somewhat reminiscent of a poetic syntax.
q The font used for the names differs, and is in upper case in the respondent's magazine.
q The use of a white solid background behind the magazine title in the respondent's magazine.
q A slightly higher price, although not so high as to place it in line with most imported magazines or collectors' edition, noting in any event that an examination of the retail prices of such publications varies widely, and of itself is not a reliable guide in associating a given brand to a relatively fixed price.
q Slightly different physical dimensions, being slightly larger page width and height in the respondent's magazine.
· Any effect of these differences, in terms of the ability of consumers firstly to attend to, and secondly perceive, them, is more than outweighed by the substantial similarity of the brand names, and the overall impression of similarity. This is particularly so because of the important role that brand names play in the homemaker magazine market, and the relatively lesser importance of other features on the front cover within this market. This must also be seen in the long-term context. The words "HOME BEAUTIFUL", when used in connection with interior or homemaker magazines, and through extensive promotion and usage since the launch of the publication in 1925, have become associated with the applicant's magazine. Against this backdrop of the applicant's brand, the question to ask is whether the respondent has employed any element or combination of elements on its front cover which would signal to consumers that its magazine is not related in some way to the applicant's magazine, but rather is separate. The answer for many potential consumers to this question would be "no".
· Two magazines are imported on a small scale from the United Kingdom under the titles "25 BEAUTIFUL HOMES" and "25 BEAUTIFUL KITCHENS". Such titles are also likely to have confused a proportion of consumers, albeit on a smaller scale, given the limited distribution, foreign content and higher prices charged for such magazines. But, mainly because of the limited distribution of the imported magazines, the applicant's "HOME BEAUTIFUL" brand has not been significantly eroded.
· Some other magazines sold in the Australian market use "similar" names to "HOME BEAUTIFUL". The expression "similar" is meant to identify the names listed below.
· A range of magazines titles contains variants of one of the words "HOME" or "BEAUTIFUL" in combination with other words, for instance:
"BEAUTIFUL KITCHENS AND BATHROOMS"
"BEAUTIFUL NEW HOMES"
"BETTER HOMES AND GARDENS"
"BUILD HOME"
"CALIFORNIA HOMES:"
"CONTEMPORARY HOME DESIGN"
"COUNTRY HOMES"
"GOOD HOME"
"HOME STYLE"
"HOMES OF GRANDEUR"
"HOUSE & HOME"
"IDEAL HOME"
"LUXURY HOME DESIGN"
"ROMANTIC HOMES"
"TOP HOME"
"TRADITIONAL HOME"
"UNIQUE HOMES"
"WOMAN & HOMES"
"YOUR HOME"
"25 BEAUTIFUL KITCHENS"
· In each of the above titles, only one of the words "HOME" or "BEAUTIFUL" or variants of these are used, but not both. The use of the two words in combination by the respondent gives rise to the likelihood of confusion in this case.
· It is notable that the names listed mostly use generic and descriptive words. Although an attempt is made to differentiate each magazine through the use of a different typeface layout of the name and overall layout on the front cover of the magazine, it is more likely that the name remains the primary basis on which many consumers attempt to identify the brand they seek. In such a situation, given the similarity of many of the names listed above, this makes it difficult for less vigilant consumers.
· There are several scenarios, or purchase situations, in which the similarities between the identifying elements of the "HOME BEAUTIFUL" and "25 BEAUTIFUL HOMES" get-ups can easily lead to consumer confusion, for instance:
q A consumer who is peripherally aware of "HOME BEAUTIFUL" visits a general newsagency that carries "HOME BEAUTIFUL", then sees "25 BEAUTIFUL HOMES" in a setting - such as a stand-alone display - in which he or she is unable easily to compare the magazines and takes "25 BEAUTIFUL HOMES" believing it to be "HOME BEAUTIFUL".
q A relatively uninvolved magazine buyer - like a great many consumers - who has read "HOME BEAUTIFUL" at some time in the past and who, operating with imperfect recollection, responds to the "25 BEAUTIFUL HOMES" get-up, and purchases "25 BEAUTIFUL HOMES", believing it to be "HOME BEAUTIFUL", or a brand extension of it.
q A consumer who, seeing "HOME BEAUTIFUL" and "25 BEAUTIFUL HOMES" displayed side-by-side or in close proximity to one another on a newsagency shelf, purchases "25 BEAUTIFUL HOMES" in the mistaken belief that "25 BEAUTIFUL HOMES" is a product from the same source as "HOME BEAUTIFUL", namely a "one-off", or special, or "best of", edition.
· Assuming that a number of magazines now available to consumers via newsagencies are also similar in one or more respects to the applicant's magazine, including packaging, content, price and distribution, there is a risk that some consumers being exposed to those magazines may also become confused in a similar fashion to that in the case of "25 BEAUTIFUL HOMES". However, these other magazines do not bear as close a resemblance to the applicant's magazine as does "25 BEAUTIFUL HOMES". Furthermore, it is less likely that these magazines have established sufficient consumer reputation as to have significantly eroded the applicant's distinctive position in the minds of a great many Australian magazine buyers.
15 As mentioned, Professor Dowling's evidence was admitted subject to the respondent's objection to its relevance, a question dealt with below in the course of considering my conclusions on the ultimate issues. Without prejudice to its objection, the respondent's Counsel, Mr Yates SC, in the course of challenging Professor Dowling's opinion of the likelihood of confusion here, cross-examined Professor Dowling as follows:
"MR YATES: There is no way of telling from your opinion is there whether it's likely or how likely persons making a rushed magazine purchase may mistakenly believe 25 BEAUTIFUL HOMES to be AUSTRALIAN HOME BEAUTIFUL magazine?---Your Honour, could I be permitted to give a slightly more long winded answer to this one?
HIS HONOUR: Yes?---And it's in the early part of the affidavit. One of the fundamental principles of modern marketing is there is no such thing as an average customer so marketeers look at the world in terms of different segments of consumers and when one accepts that that is no such thing as an average customer and different people react in different ways in different purchase environments then a statement of somebody, time poor in a rushed environment mistakenly believing one magazine is as another fits the theory 101. It's as simple as that. One of the foundations of modern marketing is that we don't make generalisations about all customers all of the time ... .
MR YATES: Yes?---Is just highlighting one of the principles in terms of the segmentation of markets. ... [C]ustomers in different purchase situations can react quite differently.
MR YATES: Well now there is no way of telling is there whether a person making a rushed purchase is acting reasonably in his or her own interests?---What do you mean by reasonably? There is a whole psychology which underlies that.
There is no way of knowing is there the factors weighing on a purchaser's mind when that person makes a rushed purchase?---As I said your Honour, in this court room today, no, but given a budget and a survey, yes at a later point in time.
Such a person could be acting under a variety of levels of distraction?---Your Honour that is what I have been saying, yes, they can react under a variety of stimuli."
16 Later in his cross-examination, Professor Dowling was asked about his analysis of the "one-off" or "best of" phenomenon. He said that he had not carried out any empirical study himself, and was unaware of anybody else's work in this area.