Trade Practices Act, 1974, s. 52

Solicitors for the Respondent: Mallesons Stephen Jaques

The applicants bring in short minutes of orders to reflect the reasons of the court.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Commencing in 1981, a business of the conduct of microwave cooking classes has been carried on by the second applicant, Mrs McDermott, and latterly by a company which she formed, the first applicant. The name of the business, from the beginning, was "Microwave Cuisine". It apparently grew quite rapidly, so as to embrace classes in every state of Australia and in both main islands of New Zealand. The principal activity of the business is the conduct of cooking classes which focus exclusively upon the use of microwave ovens; but other activities of the business include the issue of cookery books for microwave cooking, the giving of advice to members of the public and also to food manufacturers about the cooking of food in microwave ovens and about recipes and products which are suitable for use in cooking in that way, and the endorsement of products associated with microwave ovens, such as Gladwrap, Crown Corning ware, Mighty Chef, Prestige and Vitri products. Persons who attend Microwave Cuisine cooking classes are told that Microwave Cuisine "do recipe development", carrying out tests on recipes, as well as product development testing with food manufacturing companies. There is organized through Microwave Cuisine a Microwave Cuisine Recipe Club by which information about new products connected with microwave cooking is provided on a regular basis to persons who join the club. This club is advertised at the cooking classes.

2. In the Microwave Cuisine classes, apart from the recommendation of the products I have mentioned, there are also regular endorsements of particular food products, such as ETA Maestro microwave cake mix and White Wings brand cake mix. The demonstrators demonstrate cooking with these mixes, and indicate that they were specifically formulated for microwave cooking.

3. About early August 1988, a Miss Norris, one of the home economists employed by the applicants, was doing her own shopping at a Coles New World Supermarket at North Rocks, when she noticed in the frozen food cabinet a package endorsed with the words "Microwave Cuisine" in writing which appeared to her to be similar to the writing the applicants used, for their business name, on the cookbooks distributed by them. Miss Norris was asked in evidence:

"Well, when I saw Microwave Cuisine written on

it I thought of our cooking school

immediately because of the format that the

words were written in and I wondered if we

were endorsing the product why Joan

(referring to Mrs McDermott) had not said

anything to us because I know she likes to

keep us up to date with things that the

company is doing. That is what I first

thought."

Miss Norris reported the matter to Mrs McDermott the same day, telling her that the words on the packet were written "the same way we write it on the cookbook."

4. It is not in dispute that the product seen by Miss Norris is produced by the respondent, which is a member of the Panfrida Foods Limited group, under the brand name "Willow Valley". The group had launched a new frozen fast food on the market, designed for heating in a microwave oven, which it called a "Pita Pick-up". The packages containing Pita Pick-ups are endorsed with the brand "Willow Valley", but immediately after those words they also bear, in larger letters, and in a cursive script quite different from the print used for the brand name, the words "Microwave Cuisine". The cursive writing would be likely to recall to a person who had seen the applicants' cookbooks, or many other documents emanating from the applicants (though not all, and not the most recent), the business name of the applicants which had frequently been written in just that way, and particularly was so shown on the cookbooks.

5. The applicants reacted promptly to the information received from Miss Norris. By letter dated 19 August 1988, their solicitors threatened proceedings under s.52 of the Trade Practices Act 1974. Events then moved fast. A group for which the applicants performed services was the Nestles group; on 20 August 1988 a representative of that group complained to Mrs McDermott by telephone, expressing concern "that it looks as if you have endorsed Panfrida's product, which is in direct opposition to Nestles' products." A letter followed shortly afterwards, dated 25 August 1988, in which the Nestles group sought an assurance that there was no conflict of interest for the applicants between work for Nestles and for the Panfrida group. Meanwhile, by letter dated 23 August 1988 the solicitors for the respondent rejected the applicants' demand, specifically denying their right to "any protectable reputation in the words 'Microwave Cuisine'." These proceedings were then commenced by application filed 26 August 1988, in which injunctive relief was claimed, as well as damages or an account of profits. The points of claim base the relief sought on alleged breaches of ss.52, 53(c), and 53(d) of the Trade Practices Act, and on passing off.

6. At this point, it is desirable to consider in more detail the evidence concerning the reputation of the name "Microwave Cuisine". As I have said, the business commenced in 1981. From small beginnings, it has grown to a substantial size. During the five years to 30 June 1988, over $440,000 was spent on advertising. Not far short of one million Microwave Cuisine cookbooks have been sold by the applicants. In 1988, there were five hundred centres, throughout Australia, where classes were regularly held, representatives visiting very many of these centres each six to eight weeks. Over fifty classes were held each week. At the headquarters of the business, in the Sydney suburb of Cherrybrook, up to fifty telephone calls a day are received from members of the public, inquiring about classes and microwave cooking problems, whose calls are answered:"Microwave Cuisine." For the past five years, Microwave Cuisine has been advertised regularly in local newspapers throughout the Sydney, Melbourne, Adelaide, Hobart and Perth areas. Posters have also been placed in shop windows and on local noticeboards, for example, at public schools and clubs. Brochures and leaflets have been handed out, and talks given, at large department stores, such as David Jones and Grace Bros. Thousands of letters have been received from members of the public in envelopes addressed to Microwave Cuisine. Several hundred thousand people, according to Mrs McDermott's estimate, which I accept (I found her a credible witness), have attended Microwave Cuisine classes where that name has been used by Mrs McDermott, or by home economists employed by her or by the applicant company, as the name of the cooking school. The Microwave Cuisine cooking school has also been referred to on television and radio, where Mrs McDermott has been interviewed as the founder of Microwave Cuisine. Literature bearing the name Microwave Cuisine is regularly available in the microwave oven sections of department stores in Sydney and Melbourne. The name "Microwave Cuisine" has been registered under the Business Names Act 1962 of New South Wales, and under the corresponding Acts of all mainland states of Australia.

7. It is clear, from these facts, that a great number of people in that section of the public which is interested in microwave cooking is likely to know the name "Microwave Cuisine" as the name of a cooking school, and to have known that name for a considerable time. There is also specific evidence of the use by members of the industry concerned with microwave ovens, and by members of the wider public, of the name "Microwave Cuisine" to refer to the applicants' cooking school. That evidence includes the listing of the name, along with the names of leading companies and organizations, as the name of the organization represented by Mrs McDermott, at a large conference of those concerned with the promotion of the microwave cooking industry. It includes, too, the thousands of letters from members of the public received by the applicants addressed "Microwave Cuisine".

8. The documents in evidence also make it clear that the name has frequently been associated with its representation in writing by a kind of freehand cursive script.

9. For the respondent, it was submitted that the name "Microwave Cuisine" makes use of ordinary English words descriptive of the activity of the school, and that the applicants are not entitled to prevent others using these ordinary English words to describe similar activities. I shall discuss later in these reasons the law with which the submission is concerned. It should be pointed out at once, however, that the words "Microwave Cuisine" appear on the respondent's packages with capital initial letters, as a name would be written, and that, standing alone, they are not a natural description of the contents of the package, which consist of a pre-cooked meal suitable for heating in a microwave oven. If there is such a thing as a microwave cuisine, it is a style of cooking.

10. But the applicants retort that there is in fact no such thing as a microwave cuisine, in the true meaning of the words. For that reason, they claim that an inapt, but suggestive, use of the words is appropriate as their business name. It is evocative partly because of the antithesis between cooking by microwave oven and the gastronomic vision conjured up by the word "cuisine". Mrs McDermott said (and other witnesses were in accord with her in this) the word "cuisine" is used "usually to describe up-market style cooking". Again:

"It certainly is very unusual to be referred

to in connection with microwaves. Most

people do not realize, especially consumers,

that gourmet or up-market foods, especially

cuisine foods, can be cooked in a microwave

oven. They are struggling with basic foods."

Asked by counsel for the respondent if it struck her as surprising that "there are uses of the word 'cuisine' in Australian Microwave Magazine in connection with the microwave", she said:

"It surprises me that they use it because it

certainly is not a general term used with

microwave cooking. ... I have dealt with

many thousands of women who use microwave

ovens, and some men, and I really do not

believe that most people associate anything

other than the basic(s) of cooking (with

microwave ovens), and the amount and the type

of food styles - the amount and types of food

that most consumers use in their microwave

oven - attest to that. They have (a) problem

cooking basic meats and vegetables, let alone

gourmet cuisine food."

"It is my experience that people do not cook

advanced foods in a microwave oven."

On the precise question of the conjunction of the words in the name "Microwave Cuisine", she said:

"I have never seen the words "Microwave

Cuisine" linked together ever before other

than in connection with the Microwave Cuisine

cooking schools."

She also gave evidence that she had received additional royalties from the publisher Bay Books for the right to use the name "Microwave Cuisine" in connection with a cookery book.

11. Counsel for the respondent endeavoured, as is indicated by his question referred to above, to suggest examples of the use together, as ordinary English, of the words "microwave cuisine", but was unable to produce any example precisely in point. This suggests that the phrase does not have any place in common parlance to describe cooking in a microwave oven - and certainly not to describe food merely suitable for heating in a microwave oven. I am satisfied that, to a large part of the section of the public which uses microwave ovens, and is concerned about foods suitable for cooking or heating in those ovens, the words "Microwave Cuisine", especially written with capital initial letters and in a cursive script, do not convey a descriptive message, but overwhelmingly the name of the cooking school associated with the applicants. Quite apart from the implications which would naturally flow from the presence of that name on a product which might be heated in a microwave oven, I think in the year 1988, having regard to the numbers of people who had attended Microwave Cuisine cooking classes, many persons would have known that the applicants do endorse some food products in their schools, and would have been very likely to conclude, as Miss Norris and representatives of the Nestles group did, that a message of endorsement, or at least approval, by the applicants was being conveyed. Other persons would have been likely to infer from the use of the name of the applicants' business, written in the very style they have often used, that there was an association of a business nature between the product, or those who produced it, and the applicants.

12. The respondent called evidence from the graphic designer who suggested the design of the package, a Mr Ridley, that he had never heard of the Microwave Cuisine cooking schools; and from the general manager of the Bakeries group of Panfrida Foods Limited, a Mr Newell, that the words were intended simply as "a descriptive term with sales appeal". But the graphic designer's expertise did not, of course, extend to the microwave oven industry, so that his lack of knowledge of the Microwave Cuisine schools is not surprising. Mr Newell's assertion about the words is harder to accept, since they were included in an application for a trademark registration made by his company in respect of the expression "Willow Valley Microwave Cuisine", the last two words being written in a cursive script. But no evidence was given by the respondent's food economist, Barbara Lowery, who has special experience in relation to Microwave Technology, or by the respondent's managing director, Mr G. Jureidini, who personally approved the packaging. They had a prior association with each other and with microwave cooking, and their respective positions within the respondent's organization suggest that they would both have been very much involved in the launching of the new product here in question. In 1986, they took part in the first Australian Microwave Conference as co-presenters with Mrs McDermott. The name of Microwave Cuisine was made prominent at that conference by advertising. Both Mrs McDermott and Barbara Lowery were involved in the organization of the conference and spoke at it, as did Mr Jureidini. The delegate's list showed Mrs McDermott as attending on behalf of Microwave Cuisine.

13. The association of Barbara Lowery with Mrs McDermott had in fact been quite close from some time in 1985. From that time on, for about eighteen months, Barbara Lowery promoted a product of her then employer through Microwave Cuisine. Also, during about the same period, Mrs McDermott and Barbara Lowery were both members of the executive committee of the Microwave Information Council of Australia, of which Barbara Lowery was for a while president, and of which Microwave Cuisine was a business member.

14. I do not accept the evidence of Mr Newell that Barbara Lowery had no involvement with the packaging of the Pita Pick-ups product. It is very unlikely, considering her position and background, and her prior working association with the managing director, that she was not intimately involved in the production of this particular product, designed especially to be heated in microwave ovens. In any case, Mr Jureidini may well have consulted her directly and not through Mr Newell, so that if he was unaware of her involvement that would not deny its reality. It is admitted that Mr Jureidini did have a personal involvement with the packaging of the product. In these circumstances, the failure of both Mr Jureidini and Barbara Lowery to give evidence is significant: Jones v. Dunkel [1959] HCA 8; (1959) 101 CLR 298. In my opinion, the proper inference from the evidence is that Mr Jureidini, on behalf of the respondent, did intend, when the wording on the packaging was adopted, to obtain the benefit of the reputation of the applicants, knowing that a significant number of people would be likely to associate the words, written as they were, with the business of the cooking schools, and would be likely to understand that a connection between the product and those schools was being suggested.

15. The gist of the applicants' claim, whether it is put under s.52 or on the basis of passing off, is that the use of the words "Microwave Cuisine" conveyed the misrepresentation previously referred to because those words had become distinctive of the applicants' business, of which they were the name. The respondent relied on the fact that the words are ordinary English words, and on their alleged use, by the applicants and by the respondent itself, in a descriptive sense. This was said both to deny the applicants' reputation in relation to the words, and also that their use by the respondent conveyed any misrepresentation.

16. The respondent's argument requires reference to be made to the decision of the High Court in B.M. Auto Sales Pty Ltd v. Budget Rent A Car System Pty Ltd (1976) 51 ALJR 254; 12 ALR 363. In that case, the leading judgment was delivered by Gibbs J., who said at 257-8:

"(I)t was argued on behalf of the appellants

that the word 'Budget' was an ordinary

descriptive word in common use, and that

there was no evidence sufficient to establish

that the name Budget Rent A Car had become

distinctive of the respondent's business. It

is true that 'Budget' is an ordinary word,

which nowadays is sometimes used to mean

'inexpensive'. The phrase 'rent a car'

contains three ordinary words, and is

commonly used to describe a business of a

particular kind. However, it is clear law

that a name composed of descriptive words may

become distinctive of the business of a

particular person, and if a plaintiff shows

that the name in fact distinguishes his

business and that the use of the name by the

defendant is calculated to deceive persons

into supposing that the business carried on

by the defendant is that of the plaintiff,

and is likely to cause damage to the

plaintiff's business, he will be entitled to

relief: see cases cited in Halsbury's Laws

of England, 3rd ed., vol. 38, par. 1025, and

Angelides v. James Stedman Henderson's Sweets

Ltd [1927] HCA 34; (1927) 40 CLR 43.

17. The view that the use of descriptive words has set legal consequences should not be pushed too far. Unless explained, it can tend either to assume that all cases where words have been used descriptively are similar, or else to smack of erecting rules of law out of the factual reasoning of past judgments. (Cf the remarks of the Earl of Halsbury L.C. in The Cellular Clothing Company, Limited v. Maxton & Murray (1899) AC 326 at 332-334; and for an example of the importance of the facts concerning the way in which a descriptive word, to which a secondary meaning is alleged to have become attached, has actually been used, see Burberrys v. J.C. Cording & Co. Ld (1909) 26 RPC 693 at 701 et seq.) In the final analysis, whether or not the words in question may be called descriptive, the court must apply, in the particular situation of each case, the principles relating to passing off: Angelides' case (supra) at 72-73, per Higgins J; Motorcharge Pty Ltd v. Motorcard Pty Ltd [1982] FCA 90; (1982) 64 FLR 153 at 160; Abundant Earth Pty Ltd v. R. & C. Products Pty Ltd (1985) 7 FCR 233 at 238-9; James Watt Constructions Pty Ltd v. Circle-E Pty Ltd (1970) 3 NSWR 481 at 488-490. Those principles rest on misrepresentation: see the recent re-examination of the basis of passing off in Institut National des Appellations d'Origine des Vins et Eaux-de-Vie v. Andres Wines Ltd (1987) 40 DLR (4th) 239. One situation may involve the use of descriptive words as the name of an applicant's business (for example, the Budget Rent A Car case); in another, the descriptive words may be added to the name of the business to indicate the product sold by the applicant (for example, "McCain Oven Chips", the name in question in McCain International Ltd v. Country Fair Foods Ltd (1981) RPC 69); in yet another, the descriptive words may be simply the name of the product produced by the applicant (for example, "Minties", as in Angelides' case, or "Camel Hair Belting", as in Reddaway v. Banham (1896) AC 199). Obviously, these disparate situations will not always give the same result, and in any one of them the result may be changed by the evidentiary matrix of circumstances. A useful contrast may be drawn between the McCain International case (where the plaintiff failed because the reputation attached to McCain's oven chips, and not simply to oven chips) and the James Watt Constructions case (where the words "Barrier Beam" had "ceased to be simply descriptive of a particular type of (electronic) machine guard", so that they meant the plaintiff's guard, and did not require the addition of the plaintiff's name to be so understood). There may also be different categories of use by a respondent of descriptive words which have become sufficiently associated with an applicant. The respondent may use the words to refer to his product, but at the same time with clarity so state that it is his product as to prevent any deception; or he may use the descriptive words in a way which either suggests he is selling the applicant's product, or suggests he is selling a product which has the applicant's endorsement.

18. (Of course, to the extent that the words in question are not ordinary descriptive words, or are not used as such, the application of the principles of passing off cannot be affected in the same way by the considerations on which the respondent relies. Reference is invariably made in the authorities to invented or "fancy" words, in respect of which a complaint of passing off may more readily succeed.)

19. A great deal will depend on the context in which the words are used, and on the nature of the applicant's business. Some applicants may be expected to endorse products (Pacific Dunlop Limited v. Paul Hogan, unreported, Sheppard, Beaumont and Burchett JJ., 25 May 1989); and then, endorsement may readily be suggested by a use of the applicant's business name, even if it does consist of descriptive words. In the present case, there is evidence of endorsement of various products, related to the use of microwave ovens, by the applicants in their cooking classes. This clearly increases the probability that a reference to the business name "Microwave Cuisine" may convey such an endorsement, which there is nothing to negative. Contrast the McCain International case (supra) at 81 where it was suggested "the defendants cannot be prevented from using those same descriptive words so long as they make it clear that their brands of the product are not the same as the brand of the plaintiffs." There the words "oven chips", unlike the name "Microwave Cuisine" here, were never used as the name of the plaintiffs' business, but only of their product.

20. Another factor of considerable significance is the length of time during which descriptive words are alleged to have acquired a secondary meaning: see, for example, the speech of Lord Macnaghten in Weingarten Bros. v. Charles Bayer & Co. (1905) 22 RPC 341 at 350, a case in which the shortness of the time was fatal to this aspect of the claim, and see also the McCain International case (supra) at 73, where the twelve years of accumulation of "ample evidence" in Reddaway v. Banham (supra) was contrasted with the mere eighteen months, that had elapsed in the case in suit.

21. It is necessary, too, to bear in mind that in cases involving descriptive words, just as in other cases, a customer is more likely to be deceived by an impression, inexactly conveyed by the use of a sufficiently well known name, where the product is a relatively cheap product the purchase of which can hardly involve any prolonged consideration. Pita pick-ups are just plucked by a busy shopper from a jumble of frozen foods in a super-market freezer.

22. Where, therefore, careful consideration is not to be expected of the consumer, clearer measures of differentiation will be required from someone who uses a name in itself deceptively similar to that of another, or to that of another's product. In the present case, it must be added that the writing of the words "Microwave Cuisine" with initial capitals, in a script standing out from the accompanying words on the packet, a script, too, resembling that frequently used by the applicants, increases the likelihood of deception: Weingarten Bros. v. Charles Bayer & Co. (supra) at 349. But a countervailing principle comes into play in the case of a name which is truly descriptive; in order to preserve the right of all to use the English language, "the Court will accept comparatively small differences as sufficient to avert confusion": Office Cleaning Services, Ld v. Westminster Window and General Cleaners, Ld (1946) 63 RPC 39, per Lord Simonds. (See also South Australian Telecasters Limited v. Southern Television Corporation Limited (1970) SASR 207 at 220-1; Hornsby Building Information Centre Proprietary Limited v. Sydney Building Information Centre Limited [1978] HCA 11; (1978) 140 CLR 216 at 229; Telmak Teleproducts (Australia) Pty Ltd v. Coles Myer Ltd (1988) 84 ALR 437 at 444-5). This, as his Lordship was careful to point out at 41-42, does not detract from the existence of a remedy if a respondent has used words which are "calculated to deceive". Cf World Series Cricket Pty Ltd v. Parish (1977) 16 ALR 181 at 189, per Bowen C.J.

23. I have reached the conclusion that the respondent's packages are calculated to deceive, and that the applicants are entitled to succeed both under section 52 and upon the principles relating to passing off. They should have an injunction to restrain continuance of the offending conduct. The application also seeks damages or an account of profits. Since Edelsten v. Edelsten (1863) 1 De GJ & S 185 (46 ER 72); 7 LT 768, as Lord Macnaghten pointed out in Weingarten Bros v. Charles Bayer & Co (supra) at 351, the rule has been established that a party suing successfully for passing off, in a case of this kind, has the option the applicants claim. I direct the applicants to bring in short minutes of appropriate orders to reflect these reasons.