Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd

6 ALR 590 TGI Friday's Australia Pty Ltd v TGI Friday's Inc [1999] FCA 304; 45 IPR 43 Transport Tyre Sales Pty Ltd v Montana Tyres Rims & Tubes Pty Ltd [1999] FCA 239; 93 FCR 421

THE COURT: 1 The appellants, Fermentum Pty Ltd (formerly known as Stone & Wood Group Pty Ltd) and Stone & Wood Brewing Pty Ltd (Stone & Wood), are brewers of craft beer based in the Byron Bay and Murwillumbah regions of New South Wales. They sell a number of different craft beers, including a beer called "Pacific Ale" which has been sold under that name since 2010. It is Stone & Wood's best-selling product. The respondents (Elixir) are also brewers of craft beer, based in Brunswick in Melbourne, Victoria. Elixir sells beer under a number of different brands, including one called "Thunder Road". In 2015, Elixir launched a beer called "Thunder Road Pacific Ale" (which, following letters of demand from Stone & Wood, was renamed "Thunder Road Pacific" in 2015). It is these products which form the basis of these proceedings. 2 In 2015, Stone & Wood commenced proceedings in this Court against Elixir alleging passing off, misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law and false or misleading representations in contravention of s 29 of the Australian Consumer Law. It subsequently amended its initial pleading to bring a claim for infringement of its registered trade mark for "Stone & Wood Pacific Ale" under s 120(1) of the Trade Marks Act 1995 (Cth). The Elixir parties cross-claimed alleging that Stone & Wood had made groundless threats to bring an action for trade mark infringement under s 129 of the Trade Marks Act, and had not pursued their infringement claim with due diligence. 3 After a four day hearing in April 2016, on 21 July 2016 the primary judge rejected Stone & Wood's claims for misleading or deceptive conduct, false or misleading representations and for passing off. He also rejected Stone & Wood's trade mark claim. Further, he concluded that Elixir's cross-claim was established and rejected Stone & Wood's asserted defence under s 129(5) of the Trade Marks Act that it had brought an infringement claim with due diligence. See Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820; 120 IPR 478. On 5 August 2016, the primary judge made a declaration that Stone & Wood had made groundless threats to bring a claim for trade mark infringement: see Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd (No 2) [2016] FCA 896. 4 Stone & Wood has appealed against the orders dismissing its claims for passing off and under the Australian Consumer Law. It also seeks leave to appeal against the primary judge's conclusion that it made groundless threats to bring an action for trade mark infringement. The respondents, for their part, have filed a Notice of Contention seeking to support the conclusions of the primary judge on grounds other than those relied on by his Honour. The appeal in respect of the passing off and misleading or deceptive conduct was limited to only some of the claims made below.

The launch of Thunder Road Pacific Ale, the intentions of those involved, the packaging and sales of Thunder Road Pacific Ale and Thunder Road Pacific 28 At [92]-[114] of the reasons, the primary judge discussed and made findings about the launch of Thunder Road Pacific Ale, the nature of the beer, its labelling and packaging, and the knowledge and intentions of Mr Camilleri and Mr Withers in these regards. The last subject was of importance in that the submissions of Stone & Wood relied heavily on the well-known passage in the reasons of Dixon and McTiernan JJ in Australian Woollen Mills Ltd v FS Walton & Co Ltd [1937] HCA 51; 58 CLR 641 at 657: 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. … 29 The "rule" is not a legal presumption, but part of the factual assessment of deception: Australian Woollen Mills 58 CLR at 658; Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157; 234 FCR 549 at 585 [117]; Aldi Stores Ltd Partnership v Frito-Lay Trading Company GmbH [2001] FCA 1874; 190 ALR 185 at 195-196 [45]-[47], 207 [96]; and Anheuser-Busch Inc v Budejovický, Národní Podnik [2002] FCA 390; 56 IPR 182 at 224 [171]-[172]. 30 The bottled format was launched in January 2015 (as Pacific Ale) and the keg format in May 2015 (as Pacific). By May, solicitors for Stone & Wood had written to Elixir complaining of the use of Pacific Ale. Elixir made a decision to change the name of its product to "Pacific". No kegs were sold under "Pacific Ale". The labels and packaging for bottles was changed in September and October 2015. 31 Thunder Road Pacific Ale was part of a series of double fermentation beers: Golden, Pale Ale, Amber, IPA, Pilsner and Pacific Ale, the bottles for which were as follows: 32 The Thunder Road Pacific Ale is made from Australian Galaxy hops (as is Stone & Wood's Pacific Ale). The taste and flavour of the beer was described by Mr Withers and Mr Piperno as summarised at [95] and [96] of the reasons (these descriptions were accepted by the primary judge): 95 Mr Withers said in his first affidavit that the Thunder Road Pacific Ale / Thunder Road Pacific is a light bodied beer made from Australian Galaxy hops and is characterised by a distinct hop aroma, with pineapple, passionfruit and citrus notes. 96 Mr Piperno (who, as noted above, owned two liquor stores which specialised in craft beer and specialty wines) gave evidence during cross-examination about the characteristics of Stone & Wood Pacific Ale and Thunder Road Pacific Ale. He said that "this whole new craft beer segment, … whether it's a Golden Ale, Bright Ale or Summer Ale, Pacific Ale, they tend to have the same characteristics like … jam-packed full of passionfruit, tropical flavours, melon, grapefruit. … It's really, really hard to distinguish one from another, from my perspective". He said that the "taste profile" of the Stone & Wood Pacific Ale and the Thunder Road Pacific Ale were probably identical. He said that, insofar as the taste and aroma are concerned, they are "[p]retty much the same". 33 At [97]-[113] of his reasons, the primary judge carefully discussed the evidence as to the launch of Thunder Road and Pacific Ale, the intentions of Mr Withers and Mr Camilleri, and the design of the labelling and packaging of the beer. At [114] of the reasons he made the following findings: (1) His Honour accepted Mr Withers' and Mr Piperno's evidence as to the descriptions of the Thunder Road and Stone & Wood Pacific Ales: [114(a)]. (2) At the time Thunder Road Pacific Ale was launched, the only beer named "Pacific Ale" being sold in Australia was the Stone & Wood Pacific Ale: [114(b)]. This finding is to be understood as made in the context of the discussion by the primary judge at [122]-[134] of other beers using "Pacific Ale" or "Pacific". Most were produced and sold after Stone & Wood renamed Draught Ale to Pacific Ale. One was released before that, in 2009, called "Pacific Pale Ale". Only a small commercial batch was produced (14 kegs) by Sunshine Coast Brewery and the primary judge concluded at [122] that given the small and once-only production it could be set aside. Elixir, without challenging this finding, did submit that the view of Mr Curran of the brewer was relevant that the name "Pacific Pale Ale" was chosen to convey the Australian regional aspect of the beer. (3) At [114(c)] the primary judge made the following findings about Mr Withers' intentions. Mr Paige was at that time the head brewer for Elixir: I accept that Mr Withers was keen to ensure that using the name 'Pacific' was not going to cause confusion with the Stone & Wood Pacific Ale; that he asked Mr Paige to confirm that it was acceptable to use 'Pacific Ale' as a descriptor of a style of beer; and that Mr Paige responded with the email described above to the effect that one of the founders of Stone & Wood admitted that Pacific Ale is a style. The email referred to was described at [97] of the reasons: … Mr Paige sent an email to Mr Withers on 26 August 2014 which stated in its subject header, "Pacific ale = style" and stated in the body of the email (below a link) that, "One of the founders admitting Pacific Ale is a style"; Mr Withers understood the reference to "one of the founders" to mean one of the founders of Stone & Wood; the link was to an article by Mr Kirkegaard in "Australian Brews News" dated 3 December 2010. (The article is described in paragraph [73] above.) The article described in [73] of the reasons contained the quotation from Mr Cook that included the excerpt from the website set out at [23] above. (4) At [114(d)] the primary judge made the following findings that are emphasised by Stone & Wood as one of the foundations of their arguments on appeal that the use of Pacific Ale and Pacific by Elixir necessarily conveys a relevant representation of connection or association: At the time Thunder Road Pacific Ale was launched, Elixir was aware that Stone & Wood were producing a beer named 'Pacific Ale'; knew that there were a lot of consumers who, when they saw the name Stone & Wood, would think of Stone & Wood Pacific Ale; knew that the name 'Pacific Ale' had come to be very closely associated with Stone & Wood in Australia; and knew that Stone & Wood Pacific Ale had a good reputation in the craft beer market. (5) At , (f) and (g)] the primary judge made important findings about the labelling and packaging which can be summarised as follows. He concluded that the labelling and packaging of Thunder Road Pacific Ale was "very different" to that for Stone & Wood Pacific Ale. The dominant feature on the Stone & Wood product was the Stone & Wood logo, whereas the dominant feature on the Thunder Road product was the name "Pacific Ale". (In ground 1 of the Notice of Contention Elixir challenges this finding (together with similar findings at [119(b)], [202] and [204]) and asserts that the primary judge should have given more emphasis to "Thunder Road".) The primary judge also found the dominant colours of the two products to be different. The dominant colour on the Stone & Wood product was mustard, whereas on the Thunder Road product the dominant colours were bright green and bright orange in roughly equal proportions. The green used on the Stone & Wood product was a darker colour and played a more minor role. Similarly, the orange on the Thunder Road product was a brighter orange and the shape of the label was different. The caps were also different colours, and the Stone & Wood product did not have the Thor symbol with which the Thunder Road product was illustrated. He found that "the overall 'look and feel' of the two products is very different", and reached the same conclusion regarding the packaging for the six packs of the two products. In designing the labelling and packaging for Thunder Road Pacific Ale, Elixir did not seek to emulate the labelling and packaging of the Stone & Wood product. The design followed that of their other beers in that range, except for the colour orange which was chosen "to reflect the character or flavour of the product". His Honour found that it was not established that the colour was chosen in order to emulate the Stone & Wood Pacific Ale background colour or to create an association in consumers' minds with Stone & Wood Pacific Ale. He noted that it was a different colour, and found that it was chosen "to communicate a 'refreshing, fruity' flavour". (6) The primary judge, however, at [114(h)] found that, in choosing the name "Pacific Ale", Elixir was to some extent seeking to take advantage of the success of the product of that name in the Stone & Wood range, given its awareness of the product and its good reputation in the market. The primary judge found that this could also be inferred from the fact that the character of the two beers was similar. He rejected the evidence of Mr Withers and Mr Camilleri that they were not seeking to obtain any such advantage, though he accepted that it was not established that Elixir intended to obtain such advantage through consumers thinking that the Thunder Road product was Stone & Wood Pacific Ale or that there was some association between the Thunder Road product and Stone & Wood or its product. Based on the different labelling and packaging, the primary judge concluded that Elixir did not intend to obtain an advantage by consumers thinking that the Thunder Road product was Stone & Wood Pacific Ale or that there was an association between Thunder Road and Stone & Wood or its product. 34 These findings that Elixir did not intend to take any advantage by causing any misrepresentation as to the beer or its association and that it intended to distinguish the two products to avoid any confusion by packaging, labelling and get-up were based on credit. Both Mr Withers and Mr Camilleri were cross-examined on their credit about this. Ultimately no challenge was made to these findings. The essence of the argument was that the primary judge should have found that the reputation of Stone & Wood in the words "Pacific Ale" and "Pacific" was such that, whatever the difference in packaging, labelling and get-up, there must necessarily have been conveyed a representation that Thunder Road Pacific Ale or Pacific was connected or associated with Stone & Wood or its Pacific Ale. 35 These findings undermine to a significant degree, if not wholly, the reliance on the well-known passages from Australian Woollen Mills referred to earlier. 36 At [115]-[119] of the reasons, the primary judge dealt separately with Thunder Road Pacific whose get-up was as follows:

Stone & Wood's submissions to the primary judge 58 At [198] and [199], the primary judge summarised the submissions of Stone & Wood as to the second contention (now on appeal the sole basis of complaint): that Elixir's use of the words "Pacific Ale" and "Pacific" represents to consumers that there is a connection or association between Thunder Road products (and so the respondents) and Stone & Wood or Stone & Wood Pacific Ale. 59 The submissions put by Stone & Wood, and summarised by his Honour at [198] and [199] reflect the submissions put on appeal. They were as follows: (1) The words "Pacific Ale" and "Pacific" as used by Stone & Wood from 2010 up to January 2015 had become distinctive of Stone & Wood and acted effectively as a common law trade mark. The evidence of Mr Kirkegaard and the trade witnesses was said to be testimony to the strong association of "Pacific Ale" with Stone & Wood and Stone & Wood Pacific Ale: [198(a)]. (2) The adoption by Elixir of the names "Pacific Ale" and "Pacific" since 2015 has been prominent and the dominant message of the Thunder Road branding. In doing so Elixir is calling upon and exploiting the reputation and goodwill of Stone & Wood in "Pacific Ale". This involves a misrepresentation of connection or association: misrepresenting the goods in such a way by this association or connection as to cause damage to Stone & Wood's business or goodwill (Reckitt & Colman Products v Borden Inc (1990) 17 IPR 1 at 18-19; HP Bulmer Ltd v J Bollinger SA [1978] RPC 79 at 99 and 117; Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; 202 CLR 45 at 88-89, citing Deane J in Moorgate Tobacco Co Ltd v Philip Morris Ltd [1984] HCA 73; 156 CLR 414 at 445): see [198(b) and (c)]. (3) The evidence of Professor Lockshin and Mr Jane exposed and underpinned these propositions. The names "Pacific Ale" and "Pacific" are used as the dominant branding feature by Elixir and as the subconscious "hook" to influence consumers to associate Thunder Road Pacific Ale and Pacific with Stone & Wood, to which they have become accustomed: [198(c)-(f)]. (4) Brewers of craft beer use packaging and design elements to permit consumers to identify their products as craft beers. This gives a starting point of familiarity with the product. From this the names used are the important cues, along with get-up, colour and labels. Thunder Road has the greatest emphasis on "Pacific Ale" and "Pacific" - this is the attraction, hook or cue. Thus the representation is made out: [198(g) and (h)]. (5) The abandonment of "Ale" did not change anything. The word "Ale" is not distinctive: [199(a) and (b)]. (6) Stone & Wood does not claim a monopoly over the word "Pacific". Rather, in its proper craft beer context and used in the way it has been it involves the misrepresentation claimed. This involves the use of a sufficiently similar colour scheme as to assist in the representation. (It should be noted at this point that on appeal Stone & Wood's submissions did not dwell at all on any deceptiveness in the colour scheme.)

The second contention 62 At [204]-[213] of the reasons, the primary judge rejected the case made based on the asserted association or connection between the Thunder Road product and Stone & Wood or the Stone & Wood product. 63 The reasoning of the primary judge was as described in the following paragraphs. It is important, at the outset, to recall the descriptions of the consumers in [58]-[66] of the reasons and discussed at [16]-[20] above. The consumer in the market is one who is alive to the different identity and products of the brewers and who is interested and attentive to what is being sold. This is not legalism; this is the appreciation of the human features of the commercial milieu into which the product (craft beer) is being sold. 64 The primary judge began by referring to the labels and packaging. There was no reference to Stone & Wood. The labels and packaging were very different. The dominant feature of the Stone & Wood products is the name Stone & Wood; whilst the dominant feature of the Thunder Road products is "Pacific Ale" or "Pacific". Even though these words are the dominant feature "Thunder Road" is placed clearly on the bottle and on the decal. The branding of Elixir should thus be viewed as apt to identify Thunder Road as the source of Pacific in a very different colour scheme. This difference was reinforced by the uniformity of (different) formats for the Thunder Road range and the Stone & Wood range: see generally [204] and [209]. 65 The next feature of the evidence focused upon by the primary judge was what he found to be the "descriptive" aspect of the word "Pacific". At [205], the primary judge said the following: In my view, the word 'Pacific' has a descriptive aspect to it when used in relation to both Stone & Wood's and the respondents' products. 'Pacific' is, of course, the name of the Pacific Ocean. It can be used adjectively to refer to someone or something that pertains to the Pacific Ocean (for example, Pacific islander, Pacific solution). It is also an adjective which means peaceful or calm (among other meanings). That the word has a descriptive aspect is underlined by the reasons why Stone & Wood chose the name in the first place. The first was that one of the Stone & Wood breweries (the only one in operation in 2010) is located in Byron Bay, which is situated on the Pacific Ocean. The second reason was to generate a calming, cooling emotional response in consumers. This evidence calls to mind the observation of Stephen J in Hornsby, quoted above: "There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name". In the present case, by choosing a name for its product that has a descriptive aspect to it, Stone & Wood ran the risk that others in the trade would use it descriptively and that it would not distinguish its product. 66 Stone & Wood attacked this finding, as will be discussed in due course: see [98]-[100] below. At this point it is perhaps worth saying that the word "descriptive" is perhaps inadequate. What is the subject of consideration is the use of the words in their commercial and physical context to create a reputation through a capacity to distinguish the goods of the trader. In this kind of context (such as s 41(3) of the Trade Marks Act) it may become relevant to assess the capacity of a word to distinguish the goods of one trader from the goods of another. The relevant concepts are not binary in nature: descriptive or distinguishing. Language is more subtle than that. A word may have no precise meaning but be capable of evoking geographic as well as metaphoric resonances, without being particularly apt to distinguish goods of rival traders. See, for example, the word "Colorado" in the context of clothes and s 41 of the Trade Marks Act in Colorado Group Ltd v Strandbags Group Pty Ltd [2007] FCAFC 184; 164 FCR 506 at 538-540 [120]-[128]. 67 The primary judge reinforced this finding about the descriptive quality of the word "Pacific" (in [205]) by his reference in [206] to the development of the uses and meaning of the word in this very market: Further, although the position was different when Stone & Wood launched its Pacific Ale product, since then the term 'Pacific' has come, as Mr Kirkegaard accepted, to "serve a function of describing beers made from hops from Australia and New Zealand" (see paragraph [134] above). Thus the word 'Pacific' has come to be used descriptively in this sense. In these circumstances, it is difficult for Stone & Wood to establish that the name 'Pacific Ale' distinguishes its beer from the beer of other traders. 68 Stone & Wood developed its product in 2010. The first impugned conduct of Elixir was in January 2015. The descriptive quality had begun to develop before then. Mr Kirkegaard's evidence was that in the three to four years before the case (April 2016) the word "Pacific" had come to be used for beer made from hops in Australia and New Zealand. 69 The primary judge then noted (at [207]) that he had concluded that "Pacific Ale" is not a style of beer in the technical sense as used in beer style guides and that the evidence does not establish that a substantial number of consumers view it as a style; but, that, his Honour said, "does not gainsay the proposition that the word 'Pacific' has a descriptive aspect to it …". 70 At [208], the primary judge noted the dominance of the Stone & Wood branding and packaging, and on the decal. This makes it, he found, less likely that the words "Pacific Ale" would distinguish Stone & Wood's product. In this context Professor Lockshin's evidence was dealt with as follows: … To the extent that Stone & Wood relies on the evidence of Professor Lockshin, for the reasons given in paragraph [166] above, I do not think it is established, in the absence of tests in relation to the products in issue, that consumer purchasing behaviour in relation to the products in issue is likely to occur in the way described in his evidence. See [55] above for [166] of the reasons. 71 The primary judge then turned (at [210]) to the findings that he had made that Elixir had to some extent sought: … to take advantage of the success of the Stone & Wood Pacific Ale (for example, by consumers familiar with the Stone & Wood product wanting to try the Thunder Road offering with the same name), but that it is not established that Elixir intended to obtain any such advantage through consumers thinking that the Thunder Road product was Stone & Wood Pacific Ale or that there was an association or connection between the Thunder Road product and Stone & Wood or its product. (italics in original) 72 The primary judge then referred to his earlier discussion at [179]-[180] of the reasons of the cases that distinguish between an intention to deceive and an intention to take advantage of some aspect of the market that may have been developed by the complainant. Central to that was the passage from the judgment of the Privy Council (delivered by Lord Scarman for a Board that included Lord Wilberforce) in Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851 at 861 [35]: Once it is accepted that the judge was not unmindful of the respondent's deliberate purpose (as he found) to take advantage of the appellant's efforts to develop "Solo", the finding of "no deception" can be seen to be very weighty: for he has reached it notwithstanding his view of the respondent's purpose. But it is also necessary to bear in mind the nature of the purpose found by the judge. He found that the respondent did sufficiently distinguish its goods from those of the appellants. The intention was, not to pass off the respondent's goods as those of the appellants, but to take advantage of the market developed by the advertising campaign for "Solo". Unless it can be shown that in so doing the respondent infringed "the plaintiffs' intangible property rights" in the goodwill attaching to their product, there is no tort: for such infringement is the foundation of the tort: see Stephen J, in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Pty Ltd. (emphasis added by primary judge) The question is whether there has been a misrepresentation as to connection or association. 73 The primary judge then (at [211]) distinguished the case from the Budweiser Case 56 IPR 182. The primary judge (not only understandably, but correctly) saw the cases as quite different factually, saying: … But in that case the word operated as such a hook because the word 'Budweiser' was a well-known mark, with brand reputation, and was not a descriptive word to Australian English speakers. In the absence of these features, I do not think the use of the word 'Pacific' is likely to operate as a 'hook' which associates the relevant Thunder Road products with Stone & Wood or Stone & Wood Pacific Ale. 74 This was the primary judge's reasoning for dismissal of the cases for passing off and under the Australian Consumer Law.

The appeal 75 On the appeal, Stone & Wood challenge the primary judge's dismissal of their claims for passing off, misleading or deceptive conduct and making false representations based only on the second contention by attacking a number of the findings made by the primary judge in respect of the evidence in the proceeding. The key submission for Stone & Wood was that the primary judge failed to recognise the form of passing off that had occurred in this case as to an impression of an association between the Stone & Wood and Thunder Road products. Stone & Wood focused its case on appeal on establishing the tort of passing off, contending that if this was made out then it would also succeed in establishing contraventions of ss 18 and 29 of the Australian Consumer Law. 76 There were six issues tendered for consideration on the appeal. They were expressed in the Notice of Appeal, and in a document entitled "Joint List of Issues" provided by the parties after the hearing of the appeal. These six issues were expressed in the Notice of Appeal, as follows: 1. The primary judge erred in dismissing the Appellants' claims in passing off and under ss 18 and 29 of the Australian Consumer Law because the Respondents' adoption and use of the names Pacific Ale and Pacific in relation to beer: (a) called upon and exploited the goodwill and reputation held by the Appellants' [sic] in the name Pacific Ale; (b) thereby implicitly established a connection or association in the minds of relevant consumers in Australia between: (i) the Respondents' Pacific Ale / Pacific beer and the Appellants' Pacific Ale beer; (ii) the Respondents' Pacific Ale / Pacific beer and the Appellants; and/or (iii) the Respondents and the Appellants; and (c) damaged the goodwill and reputation held by the Appellants in the name Pacific Ale by diminishing the distinctiveness of that name in the marketplace. Taken together, these matters were sufficient to found an actionable misrepresentation in passing off and under s 18 and 29 of the Australian Consumer Law. 2. Having found that: (a) the Appellants' Pacific Ale beer had a substantial reputation in the craft beer market, such that many consumers referred to that beer simply as "Pacific Ale" (at [91], [149(d)] and see also [144]-[147], but compare [206]); (b) the Respondents' Pacific Ale / Pacific beer and the Appellants' Pacific Ale Beer have a similar taste and aroma (at [114(a)] and [114(h)], and see also [96]); (c) at the time the Respondents launched their Pacific Ale beer, the only beer named Pacific Ale being sold in Australia was the Appellants' Pacific Ale beer (at [114(b)], and see also [107], [109] and [151]); (d) at the time the Respondents launched their Pacific Ale beer, the Respondents knew that the name Pacific Ale had come to be very closely associated with the Appellants in Australia (at [114(d)], and see also [103], [107] and [109]); (e) the dominant feature of the label of the Respondents' Pacific Ale / Pacific beer is the name Pacific Ale or Pacific (at [114(e)], [119(a)], [202], [204] and [209], and see also [103]); (f) the dominant feature of the beer tap decal for the Respondents' Pacific draught beer is the name Pacific (at [119(b)], [202], [204] and [209]); (g) the Respondents chose the name Pacific Ale for their beer to (at least to some extent) take advantage of the success of the Appellants' Pacific Ale beer (at [114(h)] and [210]); (h) some consumers do not shop for and purchase items based on side-by-side comparisons with other products in the same category, but rather make purchasing decisions using subconscious memory cues that they have learnt (at [166(a)]), the primary judge erred in finding (at [11(a)], [114(h)], [200] and [212]) that the Respondents had not, by their use of the names Pacific Ale and/or Pacific in relation to beer, represented to consumers that there is an association or connection between: (i) the Respondents' Pacific Ale / Pacific beer and the Appellants' Pacific Ale beer; (j) the Respondents' Pacific Ale / Pacific beer and the Appellants; and/or (k) the Respondents and the Appellants. 3. In making the finding (at [11(a)], [114(h)], [200] and [212]) that the Respondents had not, by their use of the names Pacific Ale and/or Pacific in relation to beer, represented to consumers that there is an association or connection between (a) the Respondents' Pacific Ale / Pacific beer and the Appellants' Pacific Ale beer; (b) the Respondents' Pacific Ale / Pacific beer and the Appellants; and/or (c) the Respondents and the Appellants, the primary judge erred because that finding rests upon the primary judge: (d) wrongly giving no, or insufficient, weight to aspects of the evidence; (e) wrongly giving too much weight to aspects of the evidence; (f) making other erroneous findings of fact. Particulars (i) The primary judge wrongly gave: (A) insufficient weight to the evidence of Mr Withers and Mr Camilleri in relation to the reason for the selection by the Respondents of the name Pacific Ale (see [97], [98], [103] - [107] and [109]); (B) no, or insufficient, weight to the informal, social and/or casual situations in which beer is commonly ordered and consumed at licensed venues (see [143] - [149], [196(a)] and [203(a) and (b)]); (C) insufficient weight to the expert evidence of Professor Lockshin and Mr Jane (see [155] - [166]). (ii) The primary judge wrongly gave too much weight to: (A) the differences between the packaging of Appellants' Pacific Ale beer and the Respondents' Pacific Ale / Pacific beer (see [114(e) - (h)], [154(a)], [202], [203(c)], [204] and [209]); (B) the differences between the beer tap decals used in licensed venues in relation to the Appellants' Pacific Ale beer and the Respondents' Pacific beer (see [149], [203(b)] and [209]). (iii) The primary judge erroneously found: (A) (at [114(h)]) that the differences between the packaging of the Appellants' Pacific Ale beer and the Respondents' Pacific Ale / Pacific beer strongly suggested that the Respondents did not intend to obtain an advantage by consumers thinking that there was an association between those beers; (B) (at [149(e)]) that there was no likely confusion between the Respondents' Pacific beer and the Appellants' Pacific Ale beer among customers who purchase beer at licensed venues; (C) (at [154(a)]) that there was no likely confusion between the Respondents' Pacific Ale / Pacific beer and the Appellants' Pacific Ale beer among customers who purchase beer at bottle shops or other retail liquor stores; (D) (at [211]) that Pacific is not a well-known trade mark to relevant consumers in Australia; (E) (at [211]) that Pacific does not have a reputation as a brand amongst relevant consumers in Australia; (F) (at [211]) that the word Pacific is unlikely to operate as a "hook" which associates the Respondents' Pacific Ale / Pacific beer with the Appellants' Pacific Ale beer. 4. The primary judge erred in finding (at [134(c)], [206], [207] and [211]) that the term Pacific was as at January 2015, or has come to be, a descriptor amongst consumers for beers made from hops from Australia and New Zealand. 5. The primary judge erred in finding (at [205], [207] and [211]) that the word Pacific has a descriptive aspect when used in relation to the parties' beers. 6. The primary judge erred in finding (at [206] and [208]) that the name Pacific Ale does not distinguish the Appellants' Pacific Ale beer from the beer of other traders. … 77 The respondents relied upon a Notice of Contention which contained the following grounds: 1. At [114(e)], [119(b)], [202] and [204] of the judgment, the learned trial judge incorrectly held that the dominant features of the Respondents' labels and packaging were the names "Pacific Ale" and "Pacific". To the contrary, it ought to have been held that the dominant or significant features of the Respondents' label and packaging were, or included, the "Thunder Road" branding and the Thor symbol. 2. With respect to the evidence of Professor Lockshin, the learned trial judge ought to have given such evidence little or no weight on the grounds that: (a) Professor Lockshin did not have any particular expertise in relation to the retailing of beer; (b) Much of the evidence of Professor Lockshin was based on hearsay publications which were not sought to be provided in the proceeding. (c) Professor Lockshin did not undertake any study of the craft beer market in Australia, or any enquiry into the type of consumers who would be purchasing the products under consideration or the purchasing environment, despite accepting in cross-examination that the matters upon which he had expressed opinions could have been tested and considered; and (d) The evidence of Professor Lockshin was speculative and argumentative. 3. On the issue of alleged trade mark infringement, the learned trial judge ought to have held that the terms "Pacific Ale" or "Pacific" were not used by the Respondents as trade marks, but rather the terms were descriptive of the Respondents' beer products. 4. Further, the learned trial judge ought to have held, in the event that the Respondents had engaged in conduct which infringed the registered trade mark of the applicant, that s 122(1)(b) of the Trade Marks Act 1995 applied with respect to such conduct. 78 The issues said to arise on the appeal were outlined in the Joint List of Issues as follows: 1) Did the primary judge err in dismissing Stone & Wood's claims in passing off and under the Australian Consumer Law in relation to the use by Thunder Road of the names Pacific Ale and Pacific in relation to beer for the reasons set out in paragraph 1 of the Notice of Appeal? 2) Having regard to the findings referred to in paragraph 2 of the Notice of Appeal, did the primary judge err in finding (at [11(a)], [114(h)], [200] and [212]) that Thunder Road did not, by its use of the names Pacific Ale and Pacific in relation to beer, make one or more of the following Representations? 3) In making the finding (at [11(a)], [114(h)], [200] and [212]) that Thunder Road did not, by its use of the names Pacific Ale and Pacific in relation to beer, make one or more of the Representations, did the primary judge err by: a. giving insufficient or no weight to the evidence and matters referred to in particular (i); b. giving too much weight to the matters referred to in particular (ii); and/or c. making the findings referred to in particular (iii); to paragraph 3 of the Notice of Appeal? 4) Did the primary judge err in finding (at ], [206], [207] and [211]) that the term Pacific was as at January 2015, or has come to be, a descriptor amongst consumers for beers made from hops from Australia and New Zealand? 5) Did the primary judge err in finding (at [205], [207] and [211]) that the word Pacific has a descriptive aspect when used in relation to the parties' beers? 6) Did the primary judge err in finding (at [206] and [208]) that the name Pacific Ale does not distinguish Stone & Wood's Pacific Ale beer from the beer of other traders? 7) Should the primary judge have found (at [114(e)], [119(b)], [202] and [204] that the dominant features of the labels and packaging for the Thunder Road Pacific Ale/Pacific beer were or included: a. the names Pacific Ale and Pacific; or b. the "Thunder Road" branding and the Thor symbol? 8) Should the primary judge have given little, or no, weight to the evidence of Professor Lockshin for the reasons stated in [2] of the Notice of Contention? … 79 Essential to the submissions on appeal of Stone & Wood was that the primary judge failed to appreciate the subtle representational case in the second contention: not that Elixir was representing that Thunder Road Pacific Ale or Pacific was Stone & Wood Pacific Ale, but that there was a representation of some connection or association between the Thunder Road product and Stone & Wood Pacific Ale. The submission thus focused on the asserted error in failing to find that Stone & Wood had a distinctive reputation in the words "Pacific Ale" and "Pacific"; relatedly, in failing to give significance and weight to the evidence of Professor Lockshin; and, especially in that context, failing to give appropriate weight and effect to the findings of an intention to take advantage of the success of the Stone & Wood Pacific Ale. 80 Before turning to the appellant's submissions a number of preliminary remarks should be made. 81 First, there was no submission that the primary judge applied or expressed the governing principles incorrectly. The relevant law was not a topic of substantial dispute on the appeal. The controversy centred around the primary judge's application of the law and the findings made by the primary judge. The focus on appeal was on passing off. The following can be taken to be how the primary judge approached the matter and how we would approach the matter. 82 As Gummow J said in ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 176; 33 FCR 302 at 355-356, the tort of passing off involves three core concepts: reputation, misrepresentation and damage. It protects the right of property in business, goodwill or reputation: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2007] FCAFC 70; 159 FCR 397 at 418 [98]; ConAgra 33 FCR at 340. To establish the tort, there must be a misrepresentation that is likely to cause damage to the goodwill or reputation of the claimant: ConAgra 33 FCR at 340. The elements of the tort were set out by Wilcox, Kiefel and Emmett JJ in TGI Friday's Australia Pty Ltd v TGI Friday's Inc [1999] FCA 304; 45 IPR 43 at 50 [25] (in a passage quoted by the primary judge at [190], which itself quoted Reckitt 17 IPR 1): In Reckitt & Coleman Products Ltd v Borden Inc (1990) 17 IPR 1, Lord Oliver expressed a similar idea when he listed the three elements that have to be demonstrated in a passing off action: "(1) that the trader's get-up, including any brand name, is recognized by the public as distinctive, specifically of the plaintiff's goods; (2) that there has been a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods offered by the defendant are the plaintiff's goods (whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods is immaterial, provided they are identified with a particular source, eg by means of a brand name which is in fact the plaintiff's); (3) that the plaintiff suffers or, in a quia timet action is likely to suffer, damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the course [sic] of the defendant's goods is the same as the source of those offered by the plaintiff." 83 A representation that there is an association or connection between a trader's product and another trader or their product may be sufficient to establish passing off: Campomar 202 CLR at 88-89 [109]. Appropriation of aspects of the get-up of a trader's product and the taking advantage of a market created by the trader by a competitor's product will not on its own amount to passing off: Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851 at 861 [33]-[35]; ConAgra 33 FCR at 345; Telstra Corp Ltd v Phone Directories Co Pty Ltd [2014] FCA 568; 316 ALR 590 at 697 [540]. 84 In HP Bulmer Ltd [1978] RPC 79 at 99, Buckley LJ said as follows: Although injury to a plaintiff's goodwill in his trade or business is a necessary ingredient of a cause of action in passing off, it is not alone sufficient to give such a cause of action, for goodwill can be injured by perfectly legitimate competition. To give rise to such a cause of action the defendant's conduct which has injured or is likely to injure the plaintiff's goodwill must be of a kind which the law does not regard as legitimate. … What conduct, then, will the law regard as illegitimate? So far as I know, no judge has attempted at any time to define this. No doubt this is wise, for conduct which the court may regard as calculated unfairly to prejudice the goodwill of another in his business may take many varied forms. I will, however, venture as far as this: if the defendant's conduct has been such as to mislead members of the public into a mistaken belief that the goods or services of the defendant or the defendant's business are or is either (a) the goods or services or business of the plaintiff or (b) connected with the plaintiff's business in some way which is likely to damage the plaintiff's goodwill in that business, the defendant will be liable to be held to have committed the tort of passing off. This formulation has two necessary elements; first, a misrepresentation, express or implied but not necessarily fraudulent, and, secondly, a consequent likelihood of damage to the plaintiff's goodwill. These are, I believe, the basic features of the tort. The latter must obviously bear upon the character of the former. The only kind of misrepresentation which is relevant is one which is calculated to damage the plaintiff's goodwill. (emphasis added) 85 A determination must be made as to whether the claimant has the necessary reputation in the market at the date the impugned product is introduced and the respondent's conduct must be assessed in the circumstances of the market in which the products are in and according to the type of product: Nutrientwater Pty Ltd v BACO Pty Ltd [2010] FCA 2; 265 ALR 140 at 158 [80]. 86 Secondly, it is plainly incorrect to posit that the primary judge failed to appreciate or understand some nuance of the case of Stone & Wood. A reading of his Honour's careful, full but clearly and cleanly expressed reasons reveals a complete appreciation of the nature and, to the extent it exists, subtlety of the case. 87 Thirdly, once it is appreciated that the primary judge was fully alive to all aspects of the case of Stone & Wood and once it is accepted that he was mindful of the deliberate purpose of Elixir (as he found) to take advantage to some extent of Stone & Wood's success, the finding of a lack of deception after a careful and balanced weighing of all the evidence makes the finding (as Lord Scarman said of Powell J's finding in the Pub Squash Case [1980] 2 NSWLR at 861 [35]) "very weighty". 88 Fourthly, aspects of the proper role of the appellate court in a case such as this should be borne in mind. Under the Federal Court of Australia Act 1976 (Cth) the appeal is by way of rehearing; an earlier more narrow approach reflected in Duralla Pty Ltd v Plant [1984] FCA 150; 2 FCR 342 has been rejected: Cabal v United Mexican States [2001] FCA 427; 108 FCR 311; Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424 at 432-435 [11]-[20]. That said, the relationship between the rehearing and error arises from the fact that the purpose of the appeal is the demonstration and correction of error. The nature of the hearing, the relationship between the undertaking of a real review of the trial and the finding of error, and the need for respect for the advantages of the trial judge was importantly discussed by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy [2003] HCA 22; 214 CLR 118 at 124-129 [20]-[31]. One particular aspect of the reasons in Fox v Percy should be noted here. In discussing the advantages of the trial judge, their Honours specifically endorsed at 126 [23] what Kirby J had said in State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; 160 ALR 588 at 619-620 [90]: The true advantages in fact-finding which the trial judge enjoys include the fact that the judge hears the evidence in its entirety whereas the appellate court is typically taken to selected passages, chosen by the parties so as to advance their respective arguments. The trial judge hears and sees all of the evidence. The evidence is generally presented in a reasonably logical context. It unfolds, usually with a measure of chronological order, as it is given in testimony or tendered in documentary or electronic form. During the trial and adjournments, the judge has the opportunity to reflect on the evidence and to weigh particular elements against the rest of the evidence while the latter is still fresh in mind. A busy appellate court may not have the time or opportunity to read the entire transcript and all of the exhibits. As it seems to me, these are the real reasons for caution on the part of an appellate court where it inclines to conclusions on factual matters different from those reached by the trial judge. These considerations acquire added force where, as in the present case, the trial was a very long one, the exhibits are most numerous, the issues are multiple and the oral and written submissions were detailed and protracted. In such cases, the reasons given by the trial judge, however conscientious he or she may be, may omit attention to peripheral issues. They are designed to explain conclusions to which the judge has been driven by the overall impressions and considerations, some of which may, quite properly, not be expressly specified. 89 As the plurality said in Fox v Percy 214 CLR at 126 [23]: These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the ''feeling'' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole. 90 Not all the aspects of the trial remarked upon by Kirby J were present here. The case was not very long, but it took four days over which time, the primary judge was able to order, contemplate and assess the evidence, including the evidence of the people (Mr Withers and Mr Camilleri) who had sought to take some (though, they thought, legitimate) advantage of Stone & Wood's success. His findings in the context of the issues of representation and reputation, and cross-exmaination, should be given the degree of respect that is appropriate. In Branir, this question of respect for assessments that involve impressions of appearance was discussed: Branir 117 FCR at 437-438 [29]. The passage from the reasons of Hill J in Commissioner of Taxation (Cth) v Chubb Australia Ltd [1995] FCA 147; 56 FCR 557 at 572-573 (with which Tamberlin J agreed) helpfully illustrates the application of the principles of appellate review to matters of impression and their being given full weight.

[1999] HCA 3

(1990) 17 IPR 1

[2016] FCA 896

[2001] FCA 427

[2007] FCAFC 70

[2000] HCA 12

[1995] FCA 417

[1984] FCA 150

[1984] HCA 73

[2002] FCAFC 157

[2010] FCA 2

[1995] FCA 147

[1999] FCA 329

[2003] HCA 22

[2001] FCA 1874

[2002] FCA 390

[2001] FCA 1833

[2014] FCA 568

[1999] FCA 239