Ricegrowers Ltd v Real Foods Pty Ltd

NEW SOUTH WALES DISTRICT REGISTRY NSD 1219 of 2007

Introduction 1 Ricegrowers Limited manufactures and distributes a number of processed food products including rice cakes and corn cakes under the trading or brand name "SunRice". In August 2003 it began selling, under the SunRice brand, sour cream and chives flavoured rice cakes. Those rice cakes were originally about 1.6cm thick, but by March 2004, SunRice was making thin ones about 0.8cm thick. In May 2006 Ricegrowers introduced sea salt and balsamic vinegar flavoured thin rice cakes to its SunRice range. Next, in August 2006 Ricegrowers began selling SunRice nacho cheese flavoured thin corn cakes. All three products were sold in flow pack packaging. 2 Real Foods Pty Limited also manufactures and distributes a number of processed food products including rice cakes and corn cakes. By mid 1996, Real Foods had produced and sold, under the trading name "Corn Thins", corn cakes which were about 0.8cm thick. These corn cakes were unflavoured. Additionally, Real Foods produced a number of varieties of "Corn Thins", such as soy and linseed, multigrain, wholegrain and organic with sesame. In 1999 Real Foods began producing and selling, under the trading name "Rice Thins", rice cakes which were about 0.8cm thick. 3 Ricegrowers has brought these proceedings because, in about April 2007, Real Foods commenced promoting and offering for sale a range of three flavoured thin corn cakes called "NEW CORN THINS", also in flow pack packaging. The three varieties of Real Foods corn cakes are: CORN THINS - sour cream and chives flavour; CORN THINS - sea salt and vinegar flavour; and CORN THINS - tasty cheese flavour. Ricegrowers claims that Real Foods is passing off its corn cakes as Ricegrowers', or is engaging in misleading and deceptive conduct in its packaging and get-up for its flavoured "Corn Thins".

Passing Off and Misleading Conduct Claim 4 Ricegrowers alleges that there is a substantial similarity between the two flavoured rice cakes and one flavoured corn cakes products it sells and three flavoured corn cakes products Real Foods sells. Both Ricegrowers and Real Foods make the majority of their sales of these products through the two large supermarket chains, Woolworths and Coles. Ricegrowers alleges that by selling its range of corn cakes, Real Foods has made false representations in trade or commerce, namely that: (1) Real Foods' flavoured corn cakes are products of Ricegrowers; (2) Real Foods' flavoured corn cakes are sold with the licence, endorsement, consent or approval of Ricegrowers; (3) Real Foods' flavoured corn cakes are a range of the products sold by Ricegrowers; (4) Ricegrowers was selling a range of corn products either alone or in tandem with its rice cake products. 5 Ricegrowers alleges that if Real Foods is found to have made each of those representations, its conduct in making them: · contravened s 52 of the Trade Practices Act 1974 (Cth) because each representation was misleading or deceptive or likely to mislead or deceive; · amounted to Real Foods passing off its flavoured corn cakes as products of Ricegrowers or as being, in some way, products associated with Ricegrowers.

False Ingredient Claim 6 Ricegrowers also alleges that Real Foods' unflavoured thin corn cake, sold under the name "CORN THINS - original", displayed on its packaging a list of ingredients including "maize (corn) 99%". Ricegrowers asserts that since about April 2007 Real Foods promoted its new range of flavoured corn thins and the packaging of the flavoured corn thins displayed a list of ingredients including "maize (corn) 54%, rice (35%) ..." 7 Ricegrowers alleges that by selling its flavoured "CORN THINS" range, Real Foods made two representations to the effect, first, that the new range had identical ingredients with the "CORN THINS - original" product and secondly, that the new range contained 99% maize. Ricegrowers alleges that each of those representations was false and contravened s 52 of the Trade Practices Act. Alternatively, it says that each was a false representation that the products in the new range had a composition which they did not have, thus contravening s 53(a) of the Act.

Relief Claimed 8 Ricegrowers seeks declarations that Real Foods has engaged in the contraventions of ss 52 and 53(a) of the Trade Practices Act and passing off that it has alleged. It also seeks injunctions against Real Foods to restrain it from continuing to use the current packaging of the flavoured "CORN THINS", orders for destruction of the existing packaging and related material and orders for corrective advertising. 9 On the first day of the hearing, Ricegrowers amended its application so as to seek an account of profits. It undertook, as a condition of making its application to amend, not to seek any relief in respect of damages under ss 82 or 87 of the Act or for the tort of passing off. I granted it leave to amend and ordered that all issues in the proceedings be determined separately and before the issue of the quantification of the account of profits.

SunRice introduces flavoured rice cakes 10 Flow pack wrapping is commonly used in the food industry. Many snack foods are packaged in flowpack packaging using various materials, including plastic and foil. The packaging material is flexible and in a sheet form on a roll. It is wrapped around the particular food and heat sealed at each end and along the spine. Examples of such packaging are seen in chips, cracker biscuits and chocolates. The wrapping can be left plain and placed inside another packaging material or overprinted. 11 Ricegrowers began manufacturing its sour cream and chives flavoured rice cakes in about August 2003. These flavoured rice cakes were circular and about 1.6cm thick. There were 12 slices in a pack weighing a total of 144g. They were then produced in New Zealand and packaged in a flow pack wrapper printed on clear plastic. The wrapper surrounded the circular rice cakes. The clear plastic was visible at the top and bottom of the wrapper and along the sealing edges. The clear plastic flow pack wrapper was overprinted with a background of various shades of light green, in most parts appearing as alternating thin horizontal stripes. (The colours used in the artwork and in the reproductions attached to these reasons are different to how they appear on the actual packaging because packaging printing presses are able to bring out more colours in a clearer way than most computer or office printers). 12 The green printing on the wrapper had a front centre piece. The SunRice logo was at the top. That logo had a red oval on the left hand side of which was a yellow circle (depicting the sun). Across the red oval in yellow writing, with black backing, was the word "Sun" and underneath in white writing, with black backing, was the word "Rice". The logo appeared at the top and superimposed on part of an illustration of a straw coloured rice cake. In the centre of the rice cake was a partial top-down view of a blue-rimmed bowl containing white sour cream and green chopped chives in the top half and the words "Sour Cream & Chives" written across the centre of the bowl. Underneath these words were some long chive stalks. Beneath the bowl but on the rice cake and written to follow the circular shape of the cake was the word "FLAVOURED" (in blue) and below it "RICE CAKES" (in brown). Bordering the bottom of the rice cake, the number "12" appeared in white font on a small brown circle with a straw-coloured border, and underneath this number, in very small font the same colour as the border, appeared the word "SLICES". 13 In about March 2004 Ricegrowers produced its next version of the sour cream and chives product. These rice cakes were made in Australia, but they were thin, about 0.8cm thick. There were 26 in a pack which weighed about 195g. The flow pack wrapper was slightly redesigned. The background design was still predominantly green but now in two parts. The bottom half of the background was similar to the light green and mostly striped earlier packaging. The top half of the background was in a darker green, and the word "Thin" appeared in varying sizes and repeatedly in a diagonal pattern in the lighter green. The logo still appeared at the top of the central yellow or straw coloured rice cake, but the word "Thin", in the same writing as on the green backing, appeared in white font with a red backing before the larger words "Sour Cream" and underneath those words "AND CHIVES" in smaller font. Those words now appeared above a front-on and complete view of the blue bowl with heaped sour cream and chopped chives and some chive stalks underneath, all contained within the rice cake. The word "FLAVOURED" appeared to the right of the bowl, and underneath the bowl bordering the rice cake were the words "RICE CAKES". The number "26" appeared in the same way that the number "12" appeared on the packaging described earlier although it was positioned to the right of the bowl on the border, following the words "RICE CAKES". The colours used were also slightly different - the text "26 SLICES" appeared in cream on a circle coloured in maroon with a cream border. 14 Next, in about August 2004 Ricegrowers changed the flow pack wrapping from clear plastic to white plastic. This was overprinted in the same way as I have just described. A representation of this version of this SunRice sour cream and chives wrapping is Annexure A to these reasons. This wrapping had white plastic as the seal at the top and bottom of the packet and along the back edge where the wrapping had been heat sealed. This flow packaging was in use until September 2007. It was this get-up in which SunRice's sour cream and chives rice cakes appeared at the time at which Real Foods introduced its competing range of flavoured thin corn cakes. 15 In about September 2007 Ricegrowers again changed the wrapping of the sour cream and chives rice cakes to a foil flow pack. That wrapping was in a darker green for both top and bottom tones but was substantially the same as the August 2004 version except for the deletion of the circle describing the number of slices, and one addition. That addition appeared to the left of the blue bowl, and mostly on the rice cake. It comprised a clear oval partly bounded by, at the top, a representation of a stalk of rice with the grains facing towards the centre in red ink and a closing line of the oval also in red ink underneath. In the centre of the oval are the words "MADE WITH WHOLEGRAIN RICE".

SunRice Sea Salt and Balsamic Vinegar Rice Cakes 16 SunRice introduced a new product in about May 2006. This was a "sea salt and balsamic vinegar" flavoured rice cake. Originally these were packed in a flow pack wrapper printed on white plastic and the backing pattern was similar to that of the August 2004 version of the sour cream and chives packaging, except the predominant colour of the background was royal purple in a darker and lighter shade. The same elements appeared in the surround of the rice cake, except that the contents were described as "Sea Salt & BALSAMIC VINEGAR". Underneath that description was a purple semicircle and written across its right border was the word "FLAVOURED". In front of the semicircle was a half filled glass container which appeared to hold balsamic vinegar and behind it was a little clear bowl of salt. A maroon circle indicating "26 SLICES" appeared in the same style and position as on the March 2004 sour cream and chives packaging. A copy of this is Annexure B to these reasons. 17 From about August or September 2007 SunRice produced a new flow pack wrapping in foil for its sea salt and balsamic vinegar flavoured rice cakes, but the essential design and appearance did not change. In January 2008 Ricegrowers deleted the numbered circle and added the "MADE WITH WHOLEGRAIN RICE" logo in the same way I have described for the sour cream and chives rice cake packet.

SunRice Nacho Cheese Corn Cakes 18 In about August 2006 SunRice introduced a new product variety of nacho cheese flavoured corn cakes. These have had only one form of packaging. These were packed in a flow pack with a predominantly yellow/orange colouring, in most parts appearing as alternating thin horizontal stripes, and weighed about 175g. At the top front was a vertical representation of a cob of corn at the foot of which was superimposed the SunRice logo. Next to the logo and to its right was the word "NEW" in blue against a white and roughly rectangular background. Underneath the SunRice logo appeared a representation of a corn cake in light yellow flecked with darker yellow across which the words "Thin Corn Cakes" appeared in orange. Under those words, but still within the corn cake, were the words "Nacho Cheese" in white writing across an orange strip which appeared with the word "flavour" underneath it. Below and under that and bordering the bottom of the corn cake there was a wedge of cheese together with partially depicted red and green capsicums. A copy of this is Annexure C to these reasons.

Real Foods' EXISTING Products 19 Michael Pels founded Real Foods in early 1980. He is its managing director. Shortly before 1980 he had a business relationship with Ricegrowers producing rice cakes with all natural ingredients and no preservatives. In 1984 Real Foods was manufacturing rice cakes under contract which Ricegrowers then sold under the name of "Sunfarm". These had a thickness of about 1.6cm. The relationship between Real Foods and Ricegrowers ceased in early 1988. 20 Until about 1992 the only rice cakes available on the Australian market were about 1.6cm thick. Mr Pels said that these had the disadvantage of being "a large mouth full, especially when the topping was added". He experimented producing both thinner rice cakes and thinner cakes which used other grains, particularly corn. He thought corn was a better prospect because rice had a bland taste. Eventually, in early 1996 Real Foods succeeded in producing a thinner cake made of corn. By mid 1996 Real Foods was producing and selling cake with a thickness of about 0.8cm made using predominantly corn rather than rice. It began selling this product as a corn cake into supermarket chains including Woolworths and Coles. The retailers allocated Real Foods shelf space to display its corn cakes. The products sold under the sub-brand name "Corn Thins". 21 "Corn Thins" were packed in a flow pack made of foil, heat sealed at each end. The foil had no printing on it, so it was silvery in appearance. The foil flow pack was inserted into a clear plastic bread bag with a clip lock. The bread bag was overprinted with different colours and wordings. Each bread bag had the words "CORN THINS" prominently printed in large black letters with a small Real Foods logo above it. By around early 1998 Real Foods produced a number of varieties of "Corn Thins" including soy and linseed, sesame organic, multigrain and rye and caraway. They also had the same general get-up with colour variations, including the large black letters for the name or mark "Corn Thins". 22 By 1998 Real Foods was also selling a number of flavoured corn snack products, being popped corn snacks in cheese, tomato salsa, sour cream and chives, lightly salted and honey nut flavours. Each was packed in a foil flat pack that was heat sealed at each end. The flat packs were printed with a get-up that used colours to identify flavours on the lower half of the pack. The top half of the pack was predominantly a gold colour. Thus, the lower half of the pack for the cheese flavour incorporated yellow, the tomato salsa, red, the sour cream and chives, green, the lightly salted, blue and honey nut, golden brown. 23 Mr Pels observed that while Real Foods continued to produce the thicker rice cakes, their sales were declining and the demand for "Corn Thins" was increasing. This led him in 1999 to decide to produce a rice thins product. Again, these rice thins were packed in a foil flow pack that had no printing on it. That flow pack was inserted into a bread bag which was labelled, once again, prominently with the words "RICE THINS" in large black letters describing the particular variety. 24 Between 2002 and 2004 Mr Pels learnt of the possibility of producing flavoured corn thins from discussions he had had with some of his overseas customers. In late 2005 Real Foods commissioned a market research company, The Leading Edge, to undertake research for the development of the "Corn Thins" product into a flavoured range. Real Foods also researched data about flavours that would best meet consumer demand in Australia as well as the United Kingdom and the United States, because ultimately it wished to sell the flavoured corn thins product in other markets. After conducting tests with a number of flavours, Mr Pels decided that the three most likely to have market appeal in Australia would be sour cream and chives, tasty cheese and salt and vinegar. After Ricegrowers had introduced its flavoured rice cake products, Mr Pels understood that they had been selling very well and appeared to have achieved good market acceptance. In about August 2006, Mr Pels also became aware that Ricegrowers intended to launch its nacho cheese thin corn cakes.

Marketing Objectives 25 "Brand blocking" is a marketing term to describe a clear and obvious brand feature, such as a logo, image or colour common to different variants of one brand which visually captures a portion of the shelf space to the exclusion of other brands. Thus, the intention of brand blocking is that when many different variants of same brand are placed together on a shelf, it will be abundantly clear to consumers that the different variants are part of the same brand. Real Foods' senior brand manager, Madeleine Anderson, said that all of the Real Foods corn thins variant used the mark "CORN THINS" in a similar size, colour and font, and that the mark is positioned in a similar, distinct and prominent position on the front of the packaging. Ms Anderson said, and I accept, that brand blocking enables consumers to more easily locate a brand on a shelf, while building familiarity with it. It is a common practice with many products within supermarkets. 26 Variant differentiation is also a marketing concept to describe packaging design that enables consumers easily, almost without thinking, to distinguish between the multiple variants within a brand. Colour is often, but not exclusively, used as one means to communicate variants of a product within the brand, where the colours themselves are not exclusively associated in the consumer's mind with a particular brand. 27 Craig Young has been the marketing and new product development manager of Ricegrowers since August 2006. Mr Young said that the type of packaging, and its visual appearance is very important for consumers of rice and corn cake products in supermarkets. He said that where a range of products has different flavours, the packaging design needs to convey both the consistent elements, indicating that the goods are all part of the same "family" and differing elements, indicating characteristics of the goods which make them different from one another so as to increase the consumer's ability to choose. He said that Ricegrowers achieved those objectives by using common elements such as the SunRice brand, its packaging designs, the use of flow pack packaging with its differing elements, including the colours and graphics on the pack. 28 Supermarkets group similar products together and present them to the consumer for sale. The evidence shows that biscuits and snack foods, including rice cakes, were displayed in Woolworths and Coles supermarket shelves associated in a way which grouped goods in the same subcategory together. Colour and packet design appeared to be the major differentiating features in those displays. Most of the packet designs for the various goods of different manufacturers were similar in shape. And many of the colours which were used to signify the flavour of the product were also similar across the different producers. There were, however, many different packs, colours and designs. The evidence of these displays indicated that the different producers were conscious of the colour cues which signified or suggested particular flavours and of the use of brand blocking. 29 The use of green to convey a connection between a sour cream and chives flavour in the savoury biscuit category is well understood by consumers. Likewise, the colour red is used to make an association with a tomato flavour. Yellow is used to make an association with a cheese flavour. And, purple is typically used to convey an association with salt and vinegar. 30 The evidence showed that displays in the savoury biscuits category section of at least Woolworths and Coles supermarkets in each of the three subcategories, were organised, in general, by applying the principles of brand blocking and variant differentiation. These principles of organisation were strikingly evident in the photographs of the displays of the SunRice and Real Foods rice and corn cakes in Woolworths and Coles supermarkets.

Ms Anderson Develops Real Foods' New Packaging 31 Madeleine Anderson commenced employment with Real Foods as the brand manager in October 2006. Her first assignment was to manage the launch of its flavoured "Corn Thins" product. At that time the flavour profiles of the three varieties had almost been finalised but nothing had yet been done about designing the packaging for each of the three products. Mr Pels left the development of the packaging design to the senior brand manager of Real Foods, Ms Anderson. She was given a deadline of April 2007 to launch the three products into Woolworths supermarkets in the savoury biscuit category. 32 The savoury biscuit category consisted of three subcategories known as crispbreads, crackers and flavoured snacks. The crispbread subcategory was further divided into segments, one of which was for rice cakes and corn cakes. Consumers make purchasing decisions across products in the savoury biscuit category. Ms Anderson said that the Real Foods original unflavoured "Corn Thins" product was marketed to be eaten as a bread replacement or as part of a light meal. She said that the flavoured "Corn Thins" were to be offered to the market as a snack food, rather than as a bread replacement or light meal. She sought to position the new flavoured "Corn Thins" against all products in the savoury biscuit category, but particularly flavoured snacks. She was aware, of course, of the SunRice flavoured thin rice cakes and nachos corn thins products at the time she began her work. She engaged Blue Marlin brand designs to assist in the preparation of the packaging. 33 In preparing the packaging design brief, Ms Anderson considered the historical market research relating to the Real Foods and "Corn Thins" brands or names undertaken by The Leading Edge. She decided that the packaging design for the new flavours would need to communicate that they were healthy, natural and tasted good. She also considered that it was imperative that the look of the packaging be different to the packaging for the existing Real Foods unflavoured "Corn Thins - original", so as to communicate readily to consumers that the new product was primarily a snack food, rather than a bread replacement or light meal. 34 In early November 2006 Ms Anderson completed a design brief and discussed it with Alexandra Bridger, an accountant manager at Blue Marlin and other Blue Marlin personnel. She had a number of discussions, exchanges of correspondence and ideas with Blue Marlin over the succeeding months. Ms Anderson formulated a number of significant features that would be important in the selection of the final design. She intended that the new product would be communicated as healthier, natural, with credible claims and as being tasty, enjoyable, and fun for snacking. She intended that it would have the ability to communicate "brand blocking" and "variant differences".

Real Foods' Intentions for its New Products' Packaging 35 The design brief for a new flavoured corn thins packaging prepared by Ms Anderson stated its objective as: To develop a new packaging (bag) design and artwork for a new product range of flavoured Corn Thins that not only stands out from the existing (unflavoured) Real Foods Corn Thins range, but the entire crisp bread & snacking category. 36 Ms Bridger gave unchallenged evidence that when Blue Marlin prepared packaging designs for the sour cream and chives flavour she considered it was important to use the colour green. She understood from her experience that colour acted as "language" to identify the flavour of such products. She said that the packaging designs represented colours that consumers associated with particular flavour variants. She said that using yellow colours in most of Blue Marlin's suggested designs for Real Foods' packaging, represented that the product was made predominantly from corn. Of course, she also understood that yellow had a flavour association with cheese. 37 Ms Anderson had particularly expressed her concern to Ms Bridger that one Blue Marlin design was too close to the SunRice products. She required Blue Marlin to produce designs which would be different and not associate SunRice products with Real Foods products. Ms Anderson told her that the Real Foods products needed to stand out from SunRice's. I accept that evidence. Ms Bridger prepared draft planograms showing revised Real Foods' designs with the SunRice and Real Foods products arrayed on supermarket shelves so as to enable Ms Anderson to be satisfied that the two would be readily distinguishable. 38 The market research done under Ms Anderson's direction included four one hour shopping visits with consumers and four two hour focus groups with consumers. These were for the purposes of assessing, among other things, the potential effectiveness of the proposed designs and the factors which motivated a shopper to select goods in a particular packaging as against other goods being offered at the same time. By January 2007, Ms Anderson had formed the view that foil flow packaging should be used for the new products. She knew that the unflavoured "Corn Thins" were sold in a foil flow package placed inside an outer bread bag. She considered that a foil flow package without any bread bag was the cheapest and easiest way of achieving, through a packaging format, a clear difference between the flavoured and unflavoured "Corn Thins" produced by Real Foods. She thought this would communicate that the new products were a "snacking" product, not a bread replacement or a light meal product. She was aware that the competing SunRice flavoured products were packaged in flow packs in plastic and foil. 39 By late January 2007, Ms Anderson had the results of the market research which showed that the design she preferred was the clear consumer preference. That design ultimately became the basis of the get-up used by Real Foods for its flavoured range of "Corn Thins". She then made the decision that the new products would be packaged with only foil flow packaging without a bread bag. In her understanding of the research, consumers thought the proposed foil flow package design was both "more snacky" and "more modern" than the bread bag format and that it conveyed a difference between Real Foods' existing products and the new ones. She then worked on the finalisation of the designs. 40 On 19 March 2007 Real Foods was informed by Woolworths that it would accept the three flavoured variants of the Real Foods "Corn Thins", but required the deletion of two of Real Foods unflavoured lines of "Corn Thins" that were then being sold, namely, the cracked lemon and pepper, and the rye and caraway varieties. 41 After considering all the material she had commissioned and using her own knowledge and experience Ms Anderson decided to proceed with the designs complained of. I am satisfied that she understood and intended that the designs would be distinct from the SunRice get-up and would not be capable of being mistaken for SunRice's products. I prefer Ms Andereson's evidence to Mr Young's where they conflict.

Real Foods' Sour Cream and Chives "Corn Thins" 42 A package of Real Foods sour cream and chives "Corn Thins" contained 25 slices and weighed 165g. The package was a foil flow pack printed in green. At the top was a red small elongated leaf-like logo in which the words "Real Foods" appeared in white lettering, underneath them in smaller lettering was "since 1980". The logo was diminutive (unlike SunRice's much larger logo). Underneath the logo were the words "CORN THINS" written in large block letters, with "Thins" appearing under "Corn". Apart from the "C" which is just over 2cm tall, the other letters are about 1.5cm tall. They are written in royal blue ink with a thin white surround and a dark sky-blue or aqua trace that follows the letter shape. Underneath the name and to its left in aqua oval is the word "new" written in white printing. Around the oval is another thin white oval line. Beneath the name there appears a picture of a corn cake. Part of the bottom portion of the corn cake is showing. Over it is printed a large white bowl filled to the brim with sour cream and chopped chives. The bowl is above a partly obscured cob of corn at the top of what would have been the corn cake and some stalks of chives. Wrapped around from the top of the cob of corn to the right and moving back towards the left is a darker green ribbon. The ribbon re-emerges from the bottom of the chives on the right hand side and stretches across the white bowl towards the left. On the top of the darker green ribbon in smaller white block letters are three descriptors: ALL NATURAL FIBRES P LESS THAN 8% FATP GLUTEN FREE P 43 On the bottom part of the ribbon are the words "Sour Cream & Chives" and in smaller letters the word "Flavour". A copy of this is Annexure D to these reasons.

"Corn Thins" - Salt and Vinegar Corn Cakes 44 The basic get-up of this package was similar to that of the "Corn Thins" - sour cream and chives corn cake. However, the flow pack was printed in a light lilac-purple. The Real Foods logo, the "Corn Thins" brand and the word "new" were printed in the same colours as on the sour cream and chives package. There were 25 slices and the package weighed 165g. The corn cake is represented on the front of the packet in the same way as on the sour cream and chives one except that the ribbon is a slightly darker lilac or purple. A cob of corn appears at the top of the corn cake and below it on the left is a square glass vinegar bottle filled to the top. On its right, there is a terracotta-coloured bowl filled with salt crystals. The claims made at the top of the ribbon are "Less than 8% fat, more than 7% fibre, gluten free". At the bottom part of the ribbon the words "Sea Salt & Vinegar Flavour" appear in white printing. A copy of this is Annexure E to these reasons.

"Corn Thins" - Tasty Cheese Flavour Corn Cakes 45 The logo, the mark "Corn Thins" and the word "new" were printed in the same colours as on the other two "Corn Thins" packages. Again, there were 25 slices and the package weighed 165g. The package is predominantly printed bright yellow with a slightly darker orange appearing just near the top of the package on its front side. The representation of the corn cake and ribbon are repeated. The ribbon is in the darker orange colour. At the top of the ribbon is a cob of corn and underneath it two quite large broken blocks of a cheddar-like cheese. The claims on the ribbon at the top are "All natural flavours, less than 8% fat, gluten free". At the bottom of the ribbon are the words "Tasty Cheese Flavour" written in white. A copy of this is Annexure F to these reasons.

"Corn Thins" Mark 46 The examples of "Corn Thins" packaging current at the time of the release of the flavoured corn cake range show a similar representation of the Real Foods logo and "Corn Thins" mark. However, the unflavoured varieties of "Corn Thins" were packaged in plain silver foil and covered with a clear plastic bread bag which was overprinted. The white surround of the letters in the name "Corn Thins" appearing on the flavoured range was depicted in dark yellow on the bread bag packaging. That is because the "Corn Thins" name appeared on the bread bag over a cream background which breaks out between shafts of corn pointing to either side. (The "Rice Thins" wholegrain packaging in evidence repeats this theme except that the word "Rice" in that name appears instead of "Corn", and the surrounds are stalks of rice.)

The Market for Rice cakes and Corn Cakes 47 Woolworths sells approximately 50% of the corn and rice cakes in the Australian market, with Coles selling about 21%. The balance of sales occur in independent supermarkets and elsewhere, including school canteens. In the year ending May 2005, the total value of goods in the Australian market for rice and corn cakes sold in supermarkets was about $27 million. Ricegrowers sales accounted for about 44% of the market and Real Foods about 51%. In the year ending May 2006, the value of goods sold in supermarkets increased to approximately $28 million, but the market shares changed so that Real Foods had about 41% and Ricegrowers 54%. This coincided with an increase in sales of SunRice flavoured rice cakes. For the year ending May 2007, the market grew to about $35 million, but Ricegrowers' share increased to 61% and Real Foods declined to 36%. Once again, sales of SunRice's expanding range of flavoured rice cakes grew markedly. 48 The introduction of its flavoured rice and corn cake products had been a very successful move for Ricegrowers which had helped it to grow its share of the market for rice and corn cake products from approximately 44% in 2005 to about 61% in May 2007. Over that period total units of all rice and corn cakes made by Ricegroweres and Real Foods sold increased significantly, so the size of the market was expanding. 49 Both SunRice and Real Foods rice and corn cake products are displayed on supermarket shelves. They usually stand upright on the shelves. The products are inexpensive and cost less that $3 for a packet of about 25 or 26 thin cakes. The supermarkets decide how and in what order to display the goods. Woolworths and Coles consult with Ricegrowers and Real Foods about the intended displays and provide them with illustrative "planograms". Ricegrowers and Real Foods provide the images of their products which are used in the planograms. 50 Other manufacturers also produced rice and corn cakes: e.g. another manufacturer, Pure Harvest, produced both types of cake. These were of similar shape and size to those of the present parties and were packaged in a flow pack.

Principles 51 The relevant date for determining whether a plaintiff has established the necessary goodwill or reputation of his product is the date of commencement of the conduct complained of: Cadbury Schweppes Pty Limited v Pub Squash Co Pty Limited [1980] 2 NSWLR 851 at 861 per Lord Scarman. 52 In these proceedings SunRice seeks only equitable relief in respect of the claim for passing off; it has abandoned any claim for damages and seeks only an account and injunctive relief. Thus, the proceedings for passing off seek a remedy to protect against injury to the goodwill built up by the activities of SunRice: Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 at 88 [108] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ. And, as their Honours pointed out, the action based on a contravention of s 52 is designed to protect consumers. Whether or not conduct amounts to a representation is a question of fact to be decided by considering what was said, written, and done against the background of all surrounding circumstances: see Campomar 202 CLR at 84 [100], citing Taco Co of Australian Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202 per Deane and Fitzgerald JJ. 53 In this area of the law the courts constantly endeavour to keep pace with the progress of trade by adapting fundamental doctrines to advancing methods and changing circumstances: Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 at 59-60 per Isaacs ACJ; ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 356 per Gummow J; Campomar 202 CLR at 88 [109]. 54 The tort of passing off is no longer anchored to the name or trademark of a product or business. As Lord Scarman pointed out in Cadbury Schweppes [1980] 2 NSWLR at 858 [22]: It is wide enough to encompass other descriptive material, such as slogans or visual images, which radio, television or newspaper advertising campaigns, can lead the market to associate with a plaintiff's product, provided always that such descriptive material has become part of the goodwill of the product. And the test is whether the product has derived, from the advertising, a distinctive character which the market recognises. 55 Their Lordships went on, through Lord Scarman, to say that competition had to remain free and was safeguarded by the necessity for the plaintiff to prove that he has built up an intangible property right which he seeks to protect in the action: Cadbury Schweppes [1980] 2 NSWLR at 858 [23]: see too Moorgate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414 at 445 per Deane J (with whom Gibbs CJ, Mason, Wilson and Dawson JJ agreed). In ConAgra 33 FCR at 356 Gummow J said: But it is to be observed that the law of passing off contains sufficient nooks and crannies to make it difficult to formulate any satisfactory definition in short form. However, "the classical trinity" does serve to emphasise three core concepts in this area of the law. This appeal is concerned with all of them, namely, the geographical requirements for a sufficient reputation, the nature of the interest damaged, and the significance of fraud in the making of the misrepresentation. 56 For over 150 years it has been the law that "nobody has any right to represent his goods as the goods of somebody else" per Turner LJ in Burgess v Burgess (1853) 22 LJ Ch 675; 3 De GM&G 896 at 904; [43] ER 351 at 354: AG Spalding & Bros v AW Gamage Ltd (1915) 84 LJ Ch 449 per Lord Parker of Waddington (with whom Viscount Haldane LC, Lord Atkinson and Lord Sumner concurred): Angelides 40 CLR at 81 per Rich and Starke JJ. 57 Lord Parker identified the basis of a passing off action as a false representation by the defendant that his goods were the plaintiff's. In Campomar 202 CLR at 88-89 at [109]-[110] the High Court recognised that the range of the defendant's conduct which could constitute passing off included inducing consumers to believe that the defendant's goods or services had an association, quality or endorsement which belonged, or would belong, to the goods or services of or associated with the plaintiff. As Lord Parker recognised, relevantly here, the point to be decided is whether, having regard to all the circumstances of the case, the use by the defendant in connection with the goods of the get-up in question, impliedly represents the defendant's goods to be goods of the plaintiff or associated with the plaintiff, whether generally or in respect of a particular class or quality. In other words, the question is whether the defendant's use of the get-up is calculated to deceive. He pointed out that it would be impossible to enumerate or classify all the possible ways in which a man may make the false representation relied on: Spalding 84 LJ Ch at 450; see too Vieright Pty Ltd v Myer Stores Ltd (1995) 31 IPR 361 at 369-370 per Beaumont, Branson and Lindgren JJ; ConAgra 33 FCR at 356 per Gummow J. 58 But, what is protected is a proprietary interest of the plaintiff in his goods or get-up; that is, for the purposes of equitable relief, the goodwill which the plaintiff has built up which the defendant's false representation injures. Mere use of the get-up of another in the selling of goods is not enough. The representation which must be conveyed by the use is that the other's goods or goods associated with him are being sold by the defendant: see Collitt v Borsalino Guiseppe e Fratello SA (1913) 16 CLR 344 at 351 per Barton ACJ, Isaacs, Powers and Rich JJ. 59 It is not necessary that the persons purchasing the goods should know of the manufacturer by name, and have in mind when they purchased the goods that they are made by that person (or the person they associate with having produced those goods, whether or not the name is known): Collitt 16 CLR at 351. Where a plaintiff's name or get-up acquires a secondary meaning, the defendant's use of the name or get-up conveys the misrepresentation that the goods are the plaintiff's. It is in this way that the plaintiff's goodwill will be injured: Collitt 16 CLR at 359, 361. 60 A trader has a prima facie right to put his goods in any packages which he may think attractive and convenient and in any method which he may consider suitable for carrying on his trade provided that the form adopted is not likely to deceive the ordinary reasonable consumer into mistaking his goods for the goods known in the market as manufactured, put up or sold by another: Burford & Sons Ltd v Mowling & Son (1908) 8 CLR 212 at 216 per O'Connor J; affirmed at 8 CLR 222-224 per Griffith CJ, Isaacs and Higgins JJ. O'Connor J said that there the plaintiffs had no monopoly in the particular kind of packing which they adopted, which was used in a large number of articles. Those included not only packed soap, but grocery items and a variety of other items. He also said that the plaintiffs could not acquire a monopoly of the form of package by adopting a particular form of packaging, because its use was open to anyone in the trade. But his Honour went on to say that: … where, 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 and 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. (Burford & Sons 8 CLR at 217) 61 O'Connor J found that the question for determination was whether the defendant had made the difference of manufacture and ownership clear on the face of the package when adopting cartons of the same material, colour, shape and size of the plaintiff's packaging. He applied what Lindley MR said in Payton & Co Ltd v Snelling Lampard & Co Ltd (1899) 17 RPC 48 at 52. Lindley MR discussed the situation where goods themselves resembled one another, in that case coffee, and were packaged similarly. He said that the issue was not that the defendant's goods or get-up was like the plaintiff's by reason of the features common to them and others. Rather, in a passage cited with approval by O'Connor J in Burford & Sons 8 CLR at 217, in order to succeed in a passing off action, the plaintiff: …must make out that the defendant's are like his by reason of something peculiar to him, and by reason of the defendant having adopted some mark, or device, or label, or something of that kind, which distinguishes the plaintiff's from other goods which have, like his, the features common to the trade. Unless the plaintiff can bring his case up to that, he fails. 62 Much later the House of Lords held that a plaintiff who sold lemon juice in a container resembling a natural lemon with a green triangular label bearing the word "Jif" was entitled in an action for passing off to protect the get-up and packaging of the lemon shape because over the years a secondary meaning had been created associating the plaintiff's get-up with goods manufactured by it: Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491 at 506F-G per Lord Oliver of Aylmerton who said: Here the mere fact that he has previously been the only trader dealing in goods of that type and so described may lead members of the public to believe that all such goods must emanate from him simply because they know of no other. To succeed in such a case he must demonstrate more than simply the sole use of the descriptive term. He must demonstrate that it has become so closely associated with his goods as to acquire the secondary meaning not simply of goods of that description but specifically of goods of which he and he alone is the source. 63 Thus, the mere fact that a defendant makes some distinction on the packaging from similar packaging used by or copied from the plaintiff may or may not be sufficient to distinguish the goods from those of or associated with the plaintiff: Burford & Sons 8 CLR 212; Payton 17 RPC at 56; affirmed [1901] AC 308; Borden [1990] 1 WLR at 507H-508B per Lord Oliver. Lord Oliver said that it was important in such a case for the defendant to see that the goods could really be distinguished from those of or associated with the plaintiff. But, he said the question was how far the defendants' trademark bears such a resemblance to that of the plaintiff, as to be calculated to deceive incautious purchasers: Borden [1990] 1 WLR at 509B citing Lord Kingsdown in Leather Cloth Co Ltd v American Leather Cloth Co Ltd (1865) 11 H L Cas 523 at 539. 64 In Borden [1990] 1 WLR at 514H-515C Lord Jauncey of Tullichettle said that a trader could only claim protection for such capricious additions to a commonly used container as distinguished his use of that container from the use of other traders. Thus, the trader may prevent a rival copying the label on boxes or perhaps the distinctive combination of colours on tins but cannot stop the rival using ordinary boxes or tins simply because they happen to be the same shape and size as his. He said that it was not the shape and size of the container which identified the product of a particular trader to the public, but the capricious additions to it by way of distinctive labelling or a combination of colour or graphic design. He referred to JB Williams Company v H Bronnley & Co Limited (1909) 26 RPC 765 at 771 per Cozens-Hardy MR and at 774 per Farwell LJ. In that case, at 773, Fletcher Moulton LJ had said there that the get-up of an article meant a capricious addition to the article itself, such as the colour or shape or wrapper or anything of that kind: see too Doctor Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (1999) 44 IPR 281 at 369 [339] per Goldberg J; and Borden [1990] 1 WLR at 515C-D per Lord Jauncey. 65 Representations are never made in a factual vacuum. They occur in a context which the court must ascertain before it can come to a conclusion about what they conveyed to the representee. The context includes the way in which and where the representation was made as well as the state of mind of the representee. Where the representation is made to the public or a section of it, the court considers the position of an ordinary reasonable person of that class in order to assess the effect of the representation. That provides an objective standard based on the reaction of the hypothetical representee. 66 So, in a claim alleging that a contravention of s 52 of the Trade Practices Act has occurred, the court considers the effect on an ordinary reasonable shopper by conduct involving the making of a representation to the class of retail consumers shopping in a supermarket displaying a trader's packaged goods on its shelves: Campomar 202 CLR at 84-85 [101]-[103]. The court attributes particular characteristics to this shopper. In actions for passing off a similar test applies in assessing whether a representation was made and, if so, what its effect was. So, in Borden [1990] 1 WLR at 509C-D Lord Oliver said that this is done against the background of the type of market in which the goods are sold, the manner in which they are sold, and the habits and characteristics of purchasers in that market: see too Campomar 202 CLR at 84 [100]. 67 And, as Burchett J noted in Kettle Chip Co Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 at 161: Of course, a person who places the packets before him, side by side, can also see differences. But that is not how passing off by the imitation of another trader's mark or get-up is to be tested. In general, and more particularly in the case of an item likely to be purchased for a small price without long consideration, the comparison which must be made is between the impression of the applicant's goods retained in a customer's mind and the impression made by the sort of consideration he is likely to give to the respondent's product before purchasing it. 68 In the law of passing off, the courts have treated evidence of the intentions of the defendant as relevant to the question of whether a representation is conveyed. SunRice argued that this evidence was determinative. It relied on remarks of Dixon and McTiernan JJ in Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 at 657. They said: The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive. Moreover, he can blame no one but himself, even if the conclusion be mistaken that his trade mark or the get-up of his goods will confuse and mislead the public. But the practical application of the principle may sometimes be attended with difficulty. (emphasis added) 69 However, their Honours concluded that in the end it was still a question of fact for the court to determine whether, indeed, there had been established a reasonable probability of deception or confusion from the use, in that case, of a trademark or device. They held that the main issue in the case was a question which was never susceptible of much discussion. They said (Australian Woollen Mills 58 CLR at 659; see too Burford & Sons 8 CLR at 220 per O'Connor J; Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354 at 389 [121] per Weinberg and Dowsett JJ, Branson J agreeing; Office Cleaning Services Ltd v Westminster Window & General Cleaners Ltd (1946) 63 RPC 39 at 40 per Lord Simonds, with whom Lords Wright, Porter and Goddard agreed): It depends 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. 70 In Payton [1901] AC at 311 Lord Macnaghten said that the evidence of witnesses as to whether a customer would be likely to be deceived was, not a matter for the witnesses, but for the judge. He said, in a passage approved by Dixon CJ, Webb, Kitto and Taylor JJ in Scott v Numurkah Corporation (1954) 91 CLR 300 at 313: The judge, looking at the exhibits before him and also paying due attention to the evidence adduced, must not surrender his own independent judgment to any witness. 71 Mere proof of the fact that a person has deliberately copied the name or get-up of a trade rival does not of itself establish a contravention of s 52 or a passing off or goods or services: Apand Pty Ltd v The Kettle Chip Co Ltd (1994) 52 FCR 474 at 496 per Lockhart, Gummow and Lee JJ. In ConAgra 33 FCR at 374, Gummow J said "[d]eliberate copying does not necessarily indicate fraud. A notable example is provided by Cadbury Schweppes [[1980] 2 NSWLR 851]". And, Lockhart J said (ConAgra 33 FCR at 345: French J at 377 agreed with both Lockhart J and Gummow J): But deliberate copying of the plaintiff's goods does not always evidence an intention to deceive; it 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. 72 In Cadbury Schweppes Pty Limited v Darrell Lea Chocolate Shops Pty Limited (2007) 159 FCR 397 at 418-419 [96]-[99] Black CJ, Emmett and Middleton JJ observed that the principles relating to passing off do not necessarily require a plaintiff to establish an exclusive reputation in relation to the use of a particular colour, in that case, purple. They said that the question was whether the plaintiff could establish facts that demonstrate that a particular use by the defendant of the colour was likely to mislead or deceive consumers into believing that there was relevant connection between the defendant and the plaintiff or their respective products: Darrell Lea 159 FCR at 418 [96]; see too Office Cleaning 63 RPC at 42 per Lord Simonds. They observed that both in the context of Pt V of the Trade Practices Act and the common law tort of passing off, trade indicia other than names and logos can become associated with a particular trader, so that use by another trader could give rise to misleading or deceptive conduct or passing off. They said (Darrell Lea 159 FCR at 418 [97]): If particular branding elements used by a trader have been identified in a special way with that trader in the minds of the members of the public, there may be misleading or deceptive conduct by reason of the appropriation of those particular branding elements by another trader. 73 Black CJ, Emmett and Middleton JJ said, obiter, that whether or not there was a requirement for some exclusive reputation as an element in the common law tort of passing-off, Pt V of the Trade Practices Act did not include such a requirement. Under the Act, 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 knowledge of consumers in Australia of the claimant's product: Darrell Lea 159 FCR at 419 [99]. 74 But for passing off or a contravention of s 52 to occur the defendant must make a false representation that the defendant's goods are the plaintiff's or are associated in some way with the plaintiff. The focus of s 52 is on the misleading of others, rather than upon an injury to a competitor: Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228 per Stephen J. 75 In cases of passing off where the wrongful appropriation of the reputation of the plaintiff or that of his goods is in question, a plaintiff who used descriptive words in his trade name would find out that quite small differences in a competitor's trade name would render the latter immune from action. The law recognises the possibility of blunders by members of the public when descriptive words are used by two traders as part of their respective trade names. But, Stephen J said the risk of confusion must be accepted because "… to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe": Hornsby Building Information Centre 140 CLR at 229. And, he said that similar principles applied to s 52, because allowing that section to be used as an instrument for the creation of a monopoly of descriptive names "… would be to mock the manifest intent of the legislation": 140 CLR at 230. The principle is not limited to a name but applies to other descriptive material if it has not given a distinctive character to a product or business: Cadbury Schweppes [1980] 2 NSWLR at 858 [21] per Lord Scarman. I am of opinion that a similar principle applies to the use of a get-up in which the plaintiff has no proprietary interest or goodwill i.e. where he has not created a secondary meaning associating the plaintiff or his goods with the get-up. 76 It is appropriate for the court to approach the question of whether s 52 has been contravened by answering the composite question whether the defendant's conduct was misleading or deceptive in relation to the ordinary and reasonable consumer of rice cakes or corn cakes purchasing them in supermarkets: see Knight v Beyond Properties Pty Limited (2007) 242 ALR 586 at 597 [51] per French, Tamberlin JJ and myself. 77 The Court must be cautious against finding fraud merely because there has been an imitation of another's goods, get-up, method or trading or trading style: Cadbury Schweppes [1980] 2 NSWLR at 861 [33] per Lord Scarman. In that case the trial judge had found that the defendant's deliberate purpose was to take advantage of the plaintiff's efforts to develop its product. The plaintiff had launched its product with mass media advertising at great expense prior to the defendant's product being put on the market. He found that the intention was not to pass off the defendant's goods as those of the plaintiff, but to take advantage of the market developed by the advertising campaign which the plaintiff had initiated. The Privy Council upheld findings that there had been no deception because the goods had been sufficiently distinguished. The plaintiff had needed to show that in doing so the defendant infringed the plaintiff's intangible property rights in the goodwill attaching to its product: Cadbury Schweppes [1980] 2 NSWLR at 861 [35]. Their Lordships upheld the trial judge's finding that although the two cans in which the rival traders marketed their soft drink were of the same size (a stock size and shape in the trade) and similar colour, the defendant had sufficiently distinguished its product. The judge found it could readily be seen that they were different: Cadbury Schweppes [1980] 2 NSWLR at 862-863 [42].

Ricegrowers' Argument on Passing Off or Misleading or Deceptive Conduct 78 Ricegrowers argued that the collection in its packaging of obvious features in an attractive way not thought of before should be seen as a new idea which created a valuable resource to the person who conceived it, just as might be the case with an original invention for which a patent was claimed. It asserted that, in effect, Real Foods had produced such similar packaging for its three new flavoured corn thins that their get-up would convey the pleaded representations to an ordinary reasonable consumer and thus pass off Real Foods' goods as Ricegrowers'. 79 Ricegrowers argued that the circumstances of the purchase of the competing products by the ordinary reasonable consumer included the following: · each of the products was low in price and a routine purchase likely to appear on the ordinary reasonable consumer's shopping list. It was likely to be bought, along with many other items, whilst the weekly shopping was being done. For the ordinary reasonable consumer, looking to purchase this type of snack food, the shopping process is a "low involvement" one. Low involvement purchases are ones which are made frequently, or sometimes on impulse and typically do not involve a large price; · the ordinary reasonable shopper has a hierarchy of cues which she uses, even in low involvement purchases when shopping very fast, in order to identify the goods she is purchasing. Ms Anderson said the cues provide shortcuts for the different categories. One such cue is the use of colour packaging of food stuffs such green for sour cream and chives; · Ricegrowers argued that when Ms Anderson prepared the marketing brief with The Leading Edge, she said that "Corn Thins" were a routine purchase, the shopping process was generally low involvement and there were shortcuts or cues which aided purchase such as familiar brands, colours, packaging, flavours and claims (e.g. the product was 97% fat free and the claims made in the nutritional information panel on the package); · the packaging of the SunRice and Real Foods flavoured products had substantial similarities in the critical cues necessary to grab the attention of the ordinary reasonable consumer; · Ms Anderson said that a new product in a crowded category, that is one in which there were many products, had to jump out and attract the consumer to a point of difference. The way in which that was done was to use familiar brands, colouring, packaging, flavours and claims for products so that the product will "work hard", as packaged, to gain the attention of the ordinary reasonable shopper. Consumers rarely go into supermarkets looking for a new product. Generally they scan the shelves in the rice cake and corn cake category from a slight distance and are attracted quickly by the cues before making the decision to take the product; · Real Foods were using symbols or logos which were likely, despite differences of detail, to lead the ordinary reasonable consumer to form the impression of a common business or at least of an association, connection or affiliation. Ricegrowers relied on what Burchett J had said in Kettle Chip 46 FCR at 176, and argued that: (a) Real Foods used a packaging type (flow pack) that it had never previously deployed in that form. Its packaging was virtually indistinguishable from the SunRice packaging. The ordinary reasonable consumer would not notice differences in the plastic flow pack of the SunRice rice cakes compared to the foil flow pack of the Real Foods and SunRice corn cakes; (b) the colours and imagery used for the packaging as well as the three flavour types of the two competitors were virtually identical; (c) the logo of Real Foods' brand was diminutive on the packaging contrary to the recommendations made to Real Foods by its market research company, The Leading Edge; (d) there was minimal, if any advertising; (e) Real Foods used the "Corn Thins" name as a brand despite many consumers seeing it as simply descriptive of a category of goods and not identifying it as a brand. 80 Ricegrowers argued that Real Foods adopted the course set out above in order to take a fast and easy option which copied the market leader, SunRice, and sought to emulate its success. Ricegrowers argued that Real Foods had chosen the packaging designs for its new flavoured products which sailed "too close to the wind" to that of SunRice. In effect, it claimed that Real Foods had designed a product knowing it had features of SunRice's products and which were calculated or likely to cause consumers, who would spend little time examining the differences in the products, to purchase them.

The Ordinary Reasonable Consumer 81 The parties agreed that the ordinary reasonable consumer (Campomar 202 CLR at 84-85 [101]-[103]: Borden [1990] 1 WLR at 509C-D) was described accurately in the packaging brief prepared by Ms Anderson as having the following demographic makeup, namely: the ordinary reasonable consumer of the parties' rice and corn cake products was a female aged between 30 and 49 years. Most would have middle or older families (i.e. school age children or teenagers) but some would not have children; some would be in households with either one or two income earners. She would be working either full-time or part-time, be married and educated. The ordinary reasonable consumer would be purchasing these products as snack foods for herself and her entire family unit. She would be health conscious and would want to set a good example for her family by her healthy eating. She also would be conscious of her weight and would feel guilty when snacking. She would not want to have foods that were full of fat or sugar. Nor would she want to give her children or teenagers such foods or set a bad example for them. 82 Ricegrowers asserted that the packaging and get-up of the three new Real Foods products launched in April 2007 were designed and presented in such a way that they would have appeared to be SunRice or Ricegrowers' products or in some way associated with them, thus deceiving the ordinary reasonable consumer. 83 When the ordinary reasonable consumer shopped in Woolworths and Coles supermarkets she would see the shelf displays of Real Foods' and SunRice's products presented in an orderly fashion. Real Foods was first in the market with a thin corn cake, having commenced selling them under the name "Corn Thins" in 1996. And, Real Foods had been marketing "Rice Thins" rice cakes since 1999. SunRice began its marketing of thin rice cakes in May 2004. Thus, each party's range of products was presented in the supermarkets in a block or "family" which displayed its entire range of rice and corn cake products as a group. Sometimes the supermarket shelf stacker would make a mistake in positioning a product, but usually each range was presented together as a "family". 84 Real Foods corn thins and rice cakes "family" or range was presented either in the top or bottom half of a set of shelves and SunRice's corn and rice cakes "family" or range was also presented in a separate, identifiable, section of the same shelving, either above or below the Real Foods' one. This had been a feature of the presentation of the parties' goods since about 1996. Both the SunRice and Real Foods products were displayed standing upright in supermarkets. Ricegrowers and Real Foods intended that there were each to be displayed in supermarkets as separate families. The SunRice products were all grouped together as were, separately, Real Foods. They were usually located in shelves adjacent to savoury biscuits including crackers and crispbreads. 85 The ordinary reasonable consumer was used to seeing the two distinct families of goods presented on the supermarket shelves in this way: Borden [1990] 1 WLR at 509C-D; Campomar 202 CLR at 84-85 [100]-[103]. 86 SunRice's brand recognition was considerably greater among consumers than that of Real Foods. There was some consumer confusion between whether Real Foods' "Corn Thins" was a descriptive name or a brand. However, I am satisfied that as presented to the ordinary reasonable consumer in a supermarket, Corn Thins were clearly seen as a distinct family of goods from those in the shelves above or below, which were clearly different and recognisable as SunRice's family of products.

Significance of Colour in Get-up 87 Ricegrowers argued that the closeness of the greens, in particular, used in the competing sour cream and chives rice cakes and corn cakes packaging would convey the impression to the ordinary reasonable consumer that the two products were SunRice's or in some way associated with it. 88 I reject this argument. After Ms Anderson did the packaging and market research, she decided on the colours and designs for the packaging of Real Foods' three flavoured corn thins. While colour is an important cue as a description of a flavour, another important feature of the marketing was the use of the words "Corn Thins" on Real Foods' products. 89 I find that the ordinary reasonable consumer would realise that the packaging on those two products is noticeably different. The yellow on the Real Foods packet is lighter and more cheese-like than the stronger orange-gold colour on the SunRice product. Likewise she would realise that SunRice's sea salt and balsamic vinegar chips had a much more prominent and visually forceful purple colour than the lighter lilac-purple shades of the Real Foods product. She would realise that those two were different. 90 The ordinary reasonable consumer was familiar with the use of colour to identify flavour in the snack foods section of the market, and in particular in the savoury biscuits category of that section. There was nothing original about colouring a sour cream and chives product with a green packaging or predominantly green packaging. The two sour cream and chives packagings are instantly recognisable as very different, although they had similar shades of green. The large bold print of "Corn Thins" name and mark was both distinguishing and in any event a familiar sight on the shelves to the ordinary reasonable consumer. After all, she was someone who in the circumstances already knew SunRice's product - that is how Ricegrowers argued she could be deceived. But in doing her shopping over the preceding weeks, months or years she would have become familiar with the separate displays of the families of SunRice and "Corn Thins" products. She would have seen the two "families" or groups as distinctive, not similar or associated. Those displays resulted from the input of Ricegrowers and Real Foods when they offered comments on the supermarkets' planograms provided to them in respect of the proposed display of their goods in the way they were shown in the supermarket. Both Ricegrowers and Real Foods had input in the process of how their goods were to be displayed for sale in, what they saw, as an appropriate way. 91 The likelihood of the ordinary reasonable consumer being misled by Real Foods' packaging or get-up for its flavoured "Corn Thins" can be tested in another way. Ricegrowers began marketing a SunRice sundried tomato and basil flavoured rice cake in a similar get-up to the original thin sour cream and chives rice cake get-up, except that the packaging was predominantly two tones of red. At the top, there was a darker, richer red with the word "thin" was written diagonally, in the slightly lighter red used also on the lower half of the packaging. In the middle of the representation of the rice cake was a picture of a sliver of a fresh tomato, two pieces of sun dried tomatoes and a sprig of basil, and above that in red writing was "thin" (in white against a dark red background) and "sun dried tomato and basil" (in red printing). 92 In about September 2007 - after it began these proceedings - Ricegrowers introduced a SunRice thin corn cake with a tomato salsa flavour. That was packaged in a similar way to the nacho cheese corn cake except, again, the predominant background colour was red. There was a cob of corn at the top, as with the nacho cheese flavour packaging. On the representation of the corn cake the words "thin corn cakes" are written in dark brown above a red stripe in which the words "tomato salsa" appear in white print and the word "flavour", again in dark brown. Underneath that and at the bottom right of the corn cake representation is a tomato in front of which is superimposed a white bowl of red tomato salsa and a sprig of green herb. 93 On both packages the SunRice logo is prominent at the top of the rice or corn cake. Mr Young agreed that both the SunRice sundried tomato and basil rice cake and the tomato salsa flavour thin corn cakes were packaged in red but he said "different tones of red". He then gave this evidence: I take it you would expect the consumer to distinguish between those two tones of red? --- The consumer is looking at a range of design elements, not just the colour. Yes, my question is, your expectation is that the consumer would differentiate between the two shades of red? --- I don't think it is just the red though that is the important distinguishing features here. Now, but would you please answer my question. Your expectation is that the consumer would distinguish between the two shades of red? --- Yes. (sic, emphasis added) 94 Mr Young agreed that the red had been chosen for each SunRice package to show it was associated with a tomato flavour just as the yellow had been chosen for the cheese flavoured product and the green for the sour cream and chives. He was involved in the introduction of the tomato salsa thin corn cake product. The SunRice sundried tomato and basil rice cake had been marketed prior to the launch of the tomato salsa flavoured corn cake. Significantly, Mr Young did not recall any concern within SunRice about the possibility that consumers at a supermarket might be confused between the two red pagkaged tomato based products. He said that originally it had been intended to launch the tomato salsa flavour thin corn cake with the nacho cheese flavour one, but production difficulties prevented both products being launched together. In this context Ricegrowers noted that its nacho corn cake was made of corn, like the cheese flavoured product marketed by Real Foods. 95 Mr Young said that SunRice's expectation was that consumers would distinguish the two products because of the difference in packaging. He said the depiction of the rice cake on the SunRice packaging was a consistent symbol and centrepiece. But, although he said it was part of the "get-up" devised by SunRice to brand its products he asserted that the consumers did not look in that much detail even though SunRice's expectation was that this would distinguish its products as rice cakes. I accept that SunRice had those expectations. I do not accept Mr Young's qualifications based on his assertions of consumers' reaction. 96 I accept Ms Anderson's evidence as to her state of mind in introducing the packaging for Real Foods' three flavoured corn cakes. Both Ricegrowers' and Real Foods' expert marketers designed their packaging with the expectation that consumers would notice the difference between different products even ones such as SunRice's two tomato ones. There is no evidence that consumers were misled or confused by the Real Food's packaging. Mr Young asserted that consumers would not distinguish between the two SunRice tomato flavoured products that one was a rice cake the other a corn cake, yet SunRice has not changed the packaging of either, despite that alleged confusion and the different characteristics, flavours and composition of its two products. And, it introduced this new tomato flavoured corn cake after it commenced these proceedings, claiming its competitor was confusing the market. 97 Likewise, Mr Young expected the new enhancement to SunRice's rice cake packaging by the addition of the rice representation and words "MADE WITH WHOLEGRAIN RICE" to emphasise potential health benefits to consumers on its various rice cake products. I find this was done because Ricegrowers appreciated that the ordinary reasonable consumer of these products would pay some attention to the packaging beyond merely looking at a colour cue before purchasing. A consumer who intentionally wished to acquire one but purchase the other might feel deceived: cp Australian Woollen Mills 58 CLR at 657. While, of course, SunRice would still sell either its tomato salsa flavoured thin corn cake, or its sundried tomato and basil one, I am satisfied that Ricegrowers took sensible and appropriate precautions in designing the packagings for the two tomato products in order to prevent such confusion occurring. It was not in Ricegrowers' interests that such confusion occur between its own products. 98 The difference between the get-up of the SunRice products and those of the Real Foods ones in competition with them is, to my mind, far more striking than that of the two SunRice tomato-based products. I am satisfied that there was no real possibility of the ordinary reasonable consumer being mislead or deceived or being confused by the get-up or packaging of the cheese flavoured and salt and vinegar flavoured "Corn Thins" products. They are distinctly different from their competitor's products in their get-up and packaging in the cues of the mark "Corn Thins", as well as colour, printing of their descriptions, and pictorial representations. 99 While the green packaging of the original SunRice rice cakes (until the most recent change) was similar to the green which Real Foods adopted for its sour cream and chives corn cakes, the two get-ups are in my view so significantly different that the ordinary reasonable consumer would know immediately on looking at one or the other that they were not the same. The ordinary reasonable consumer looking at the "Corn Thins" sour cream and chives package would know that they were not SunRice's product, or associated at all with the SunRice product that was marketed as its sour cream and chives rice cake. 100 Mr Young agreed that another factor which would make a difference to consumers was price. Some of the photographs of supermarket displays in evidence showed that the different products were displayed at different prices. He said that he understood consumers distinguished between different manufacturer's products which were similarly coloured to offer cues for similar flavours. The consumers looked at the total get-up, including the visual shape of the packaging and the various design elements of which colour would be just a part. They also noticed price. And, as he said, Ricegrowers expected that they would distinguish between its get-up for the two tomato flavours. 101 I formed the view that Ms Anderson was a reliable witness whose evidence I accept. I accept that she believed that the "Corn Thins" packaging of each flavour was sufficiently distinct from that of the competing SunRice flavour that there would be no confusion. I did not find Mr Young as reliable. This may well be because, originally, another officer of Ricegrowers was to give the evidence Mr Young gave but she had fallen ill and was not available. He had had to rely upon information from others in preparing his affidavits and I infer that he was not fully familiar with the whole subject matter over which his evidence ranged. In giving his evidence, he was not able to explain adequately why SunRice used and continued to use similar red packaging for its tomato and basil flavoured rice cakes and its tomato salsa flavoured thin corn cakes if it did not consider that the ordinary reasonable consumer would not be confused by those two get-ups. 102 "Corn Thins" were already well-known as a mark or name to the ordinary reasonable consumer when Real Foods launched the three flavoured versions in April 2007. While, the flavours were new, the name and its distinctive representation in large block letters on the packaging was familiar. Again, while Real Foods had not used a flowpack as its external package before, the ordinary reasonable consumer would see that the package was "Corn Thins", not SunRice's. On the "Corn Thins" packages that name was written in large unmistakeable letters with the flavour in much smaller letters. This was quite unlike SunRice's package presentations. I am satisfied that the ordinary reasonable consumer would not mistake any of the three flavoured "Corn Thins" for the similar flavours in the SunRice range. 103 Moreover, SunRice established that its logo was recognised as a branding device on its flavoured and unflavoured products. The absence of that device on the Real Foods products would be another cue to the ordinary reasonable consumer that she was not looking at a Ricegrowers or SunRice product. The logo was a prominent feature of the SunRice get-up. 104 As a matter of first impression, I found the get-up of the respective products to be those of obviously different products. The evidence, including photographs of supermarket shelves displaying the two families of products, has reinforced my first impression. I am of opinion that an ordinary reasonable consumer, doing her shopping, in a hurry, for her routine, familiar purchases of SunRice's rice thins or corn thins in April 2007, if her attention were drawn to the flavoured "Corn Thins", would have recognised that they were a new and different product. When they first appeared, she would have known that she had not bought "Corn Thins" in that flavour before and that they were a part of different family to the family of SunRice products. She would have wondered where the SunRice logo was, why the packaging was so different, what the words "Corn Thins" were doing on the packet. And on the shelf in front of her, in its usual position, she would have seen the SunRice product with which she was familiar. 105 Ricegrowers called no evidence of anyone actually being deceived or of complaints of deception. It argued that the ordinary reasonable consumer of these products would not be expected to complain, because the purchases were low involvement, and the goods were of low value. I am of opinion that the absence of this evidence suggests that no-one was deceived. Indeed, the ordinary reasonable consumer could be expected to tell the difference between the products, just as Ricegrowers expected her to do with its two tomato flavoured ones. 106 Ricegrowers has not demonstrated that Real Foods' use of its packaging was calculated or likely to lead the ordinary reasonable consumer to believe that any of the three corn thin flavoured corn cakes were made by or in some way associated with Ricegrowers or its SunRice products (the sour cream and chives, or sea salt and balsamic vinegar thin flavoured rice cakes or the nacho cheese flavoured corn cake): Darrell Lea 159 FCR at 418-419 [96]-[99]; Office Cleaning 63 RPC at 42. The ordinary reasonable consumer would not believe that, to the extent that the packaging of the flavoured Real Foods products was similar, any of those packages emanated from or were in any way associated with Ricegrowers or SunRice: Campomar 202 CLR at 88-89 [109]-[110]; Cadbury Schweppes [1980] 2 NSWLR at 858 [22]; Borden [1990] 1 WLR at 506F-G; Payton 17 RPC at 51; see too Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 9) [2008] FCA 470 at [88] per Heerey J. 107 I am satisfied that Real Foods differentiated its products on the face of their packages from those of SunRice: Burford & Sons 8 CLR at 21. 108 There is no reason to conclude that Ricegrowers is entitled to a monopoly on colours and flow packs for the packaging of corn or rice cakes with the features of those on Real Foods' packaging complained of. Here, Real Foods adopted colours and printed flow pack packaging which were in common use in the savoury biscuits category. Just because Ricegrowers was first to use these in the corn cake and rice cake subcategories did not entitle it to a monopoly of their use. Real Foods took sufficient steps, in all the circumstances, to distinguish its flavoured "Corn Thins" from the three conflicting products of SunRice: cp: Campomar 202 CLR at 84 [99]; Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited (1981) 149 CLR 191 at 200 per Gibbs CJ; Office Cleaning 63 RPC at 43. The ordinary reasonable consumer was used to seeing the corn and rice cakes products of the parties displayed standing up in the shelves. The new packaging for the new "Corn Thins" was presented as part of the family or group of products distinct from the SunRice family or group. When one of the "Corn Thins" flavoured corn cakes varieties was placed within the SunRice product display, as is shown in some photographs in evidence, they look noticeably out of place on the shelves and in the wrong "family" or group. I am of opinion that the ordinary reasonable consumer would notice this and realise the products were not related, even if they wondered why the supermarket had displayed them in this way: Hornsby Building Information Centre 140 CLR at 229; Cadbury Schweppes [1980] 2 NSWLR at 858 [21]. 109 I am of opinion that the flavoured "Corn Thins" packages would not have conveyed to an ordinary reasonable consumer in April 2007 any representation of, or any, association with, SunRice's family of products or deceived her into thinking that they were associated. I am of opinion that Ricegrowers has not established that any of the four representations complained of was conveyed by any conduct of Real Foods, including the use of the packaging and get-up of any of the "Corn Thins" products. It has not established a proprietary interest or goodwill in them. The claims for contravention of s 52 of the Trade Practices Act and in passing off based on those representations must therefore be dismissed.

The False Ingredients Claim 110 This minor claim was made by Ricegrowers on the pleaded basis that for some years prior to April 2007 Real Foods had sold unflavoured corn thins marketed under the name "CORN THINS - Original". These were marketed as "NEW CORN THINS" and comprised of 99% maize or corn. The new, flavoured corn thins, however, were comprised of 54% maize and 35% rice, together with other ingredients. Ricegrowers alleged that, by reason of the sale of the range of products under the name "NEW CORN THINS" without alerting consumers to the difference in the principal ingredients between the unflavoured and flavoured corn thins, Real Foods made the following representations in trade or commerce, namely: (a) the new range of products was identical in composition with respect to essential ingredients as the corn thins original product; (b) each product in the new range contained 99% maize or corn. 111 SunRice alleged that the two representations contravened s 52, in that each conduct which was misleading or deceptive or likely to mislead or deceive. It also alleged that each representation contravened s 53(a) of the Trade Practices Act in that it falsely represented that the products in the new corn thins range had a composition which they did not have.

Consideration 112 I do not consider that either representation was conveyed by the new products' packaging or otherwise. Each is a fanciful and strained meaning not derived from what an ordinary reasonable consumer would have understood. There is no evidence that the words "Corn Thins" have some secondary meaning conveying that they consist of 99% maize or corn. Secondly, the very names of the products are different. The "New Corn Thins" are self descriptively both new and flavoured so as to signify that they are a different product. These differences would be conveyed to the ordinary reasonable consumer who knew of the "Corn Thins - Original" product or its composition, because they are "new" and flavoured. 113 There was no evidence that alleged representation (b) was misleading. The principal ingredient of the new products was maize. The name was given to an artificial product. The ordinary reasonable consumer would know it was a manufactured product not a pure vegetable. The ordinary reasonable consumer would understand that many artificial food products are not pure composites of a descriptive term in a name such as "Corn Thins". The name did not mislead or deceive the ordinary reasonable consumer. Nor did it falsely assert a composition which was misleading or deceptive or otherwise inaccurate. An ordinary reasonable consumer would have appreciated that the product marketed as a new corn thins was both new and had flavouring. That is, that it was different to its alleged comparator. 114 The ingredients were listed on the new product's packaging just as they were on the other product's. There was no evidence that the "Corn Thins - original" name had acquired a secondary or other meaning known to the public, let alone that the name conveyed that a "Corn Thin" was 99% maize, or had any other particular composition. 115 I am of opinion that this claim should be dismissed.

Conclusion 116 The proceedings must be dismissed. I certify that the preceding one hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Solicitor for the Applicant: Dibbs Abbott Stillman

Counsel for the Respondent: D Yates SC and C Champion

Solicitor for the Respondent: Hazan Hollander Solicitors