The relevance of the use of common trade indicia
583 In deciding whether the respondents' conduct breached s 52 it is necessary to inquire why any proven misconception has arisen: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 ("Hornsby") at 228 per Stephen J with Jacobs J agreeing; Taco Bell at 203 per Deane and Fitzgerald JJ. In cases regarding the alleged taking of a competitor's trade indicia it is necessary to understand whether (or to what extent) any misconception suffered by consumers arises through the applicant's use of common or descriptive trade indicia.
584 As Lord Simonds said in Office Cleaning Services Ltd v Westminster Window & General Cleaners Ltd (1946) 63 RPC 39 at 42:
[W]here a trader adopts words in common use for his trade name, some risk of confusion is inevitable. But that risk must be run unless the first user is allowed unfairly to monopolise the words. The court will accept comparatively small differences as sufficient to avert confusion. A greater degree of discrimination may fairly be expected from the public where a trade name consists wholly or in part of words descriptive of the articles to be sold or the services to be rendered.
And as his Lordship said at 43:
So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be.
585 In Hornsby, Sydney Building Information Centre, had been trading under that name for more than 20 years, and Stephens J accepted that there been some instances of confusion with the newly named Hornsby Building Information Centre. In an often quoted passage his Honour said at 229-230:
There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor's trade name will render the latter immune from action.
…
The risk of confusion must be accepted, 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.
If this be so in the case of passing off actions the case of s 52(1), concerned only with the interests of third parties, is a fortiori. To allow this section of the Trade Practices Act to be used as an instrument for the creation of any monopoly in descriptive names would be to mock the manifest intent of the legislation. Given that a name is no more than merely descriptive of a particular type of business, its use by others who carry on that same type of business does not deceive or mislead as to the nature of the business described. (Citations omitted and emphasis added.)
See also Connect.Com.Au Pty Ltd v GoConnect Australia Pty Ltd (2000) 50 IPR 535 at [61] per Emmett J.
586 While these authorities relate to the use of common or descriptive words as a trade name, the same principles must apply in relation to the use of other common trade indicia.
587 Yellow is a primary colour in common usage, and consumers can be taken to be aware that many directory providers will want to use such a bright and attractive colour on their products. This is even more the case when many consumers are likely to see yellow as a standard colour for classified directories.
588 In using a single primary colour to signify its directories Telstra must accept that small differences in the get up of other traders using yellow will render them immune from action. Otherwise, to paraphrase Stephens J in Hornsby, s 52 becomes an instrument for the creation of a monopoly in the use of a primary colour. Telstra was unable to take me to any authority where exclusive right to the use of a single colour had been secured in reliance upon rights under s 52 or the principles of passing off.
589 While I consider the respondents were therefore not required to do much in order to distinguish their directories, that view is not material to my decision. Even if Telstra's use of the colour yellow is not treated as being use of common trade indicia I am satisfied that the PDC directories were properly distinguished from Telstra's directories.
The differentiation of the PDC directories
590 Although they used yellow on their covers, and consumers associated yellow with Telstra to an extent, the PDC directories were properly differentiated from the corresponding Telstra directories. It is not a question for side-by-side comparison but the differences are obvious and may be listed as follows:
(a) Telstra's directories prominently carried the Yellow Pages Trade Marks including the Walking Fingers, and the PDC directories did not;
(b) Telstra's directories contained a White Pages directory co-bound with the Yellow Pages directory and were separately branded with the White Pages trade mark, and the PDC directories were not;
(c) Telstra's directories were partly coloured in yellow for the Yellow Pages, and partly in blue for the White Pages, whereas the PDC directories only used yellow;
(d) the PDC directories carried the LD Name and Logo and Telstra's directories did not;
(e) the PDC directories had a single large photograph of a local landmark occupying most of the front cover whereas the Telstra directory had a quite different cover design, and used stock photographs; and
(f) the PDC directories covered only the local area;
(g) the PDC directories were physically smaller; and
(h) the PDC directories contained a high quality street map (which was promoted on the cover).
The covers of the PDC directories
591 Items (a) to (e) of the above list relate to the appearance of the covers of the PDC directories. I have already set out the appearance of the PDC directories in the period 1996 to 2005, and set out my view that they were well-differentiated from Telstra's directories in that period. Telstra does not plead otherwise.
592 The situation is not materially different in the period 2005 to trial. Again, while accepting that a side-by-side comparison is inappropriate, I reproduce below examples of the front covers of four directories for four different years in this period, namely, 2005/2006, 2007/2008, 2011/2012 and 2012/2013:
(a) the 2005/2006 PDC Darwin directory and Telstra's corresponding 2005-06 co-bound directory for the Northern Territory;
(b) the 2007/2008 PDC Alice Springs directory and Telstra's corresponding 2007/08 co-bound directory for the Northern Territory;
(c) the 2011/2012 PDC Port Macquarie & Kempsey directory and Telstra's corresponding 2012 co-bound directory for Port Macquarie, Kempsey, Camden Haven, Nambucca, Wauchope and Lord Howe Island; and
(d) the 2012 PDC Rockhampton & Gladstone directory and Telstra's corresponding 2012/13 co-bound directory for Rockhampton, Gladstone, Yeppoon & Emerald.
593 Firstly, I see the absence of the well-recognised Yellow Pages Trade Mark with the Walking Fingers from the PDC directories as a strong point of differentiation. The evidence shows that for almost 40 years Telstra had never published its directories or undertaken its marketing without using that branding. Directory users and advertisers needed to look no further than the well-known Walking Fingers logo to know that a directory was Telstra's product. Other than those consumers who erroneously assume that any directory is associated with it, Telstra draws a long bow in arguing that directories without that brand are likely to be seen by directory users or advertisers as published by or otherwise associated with Telstra. An ordinary or reasonable directory user or advertiser would not have thought that a yellow covered directory without that branding was Telstra's directory.
594 Secondly, the same might be said (to a slightly lesser extent) of the White Pages trade mark. For most of the regional areas in which the PDC directories were published, Telstra's corresponding directories had for many years been co-bound with the White Pages. The White Pages trade mark was also well-known and its absence from the PDC directories was another point of difference.
595 Thirdly, the PDC directories' use of the LD Name and Logo is another significant point of difference. I do not accept the contention that it lacks distinctiveness. It may be that the words Local Directories are descriptive, but I consider the stylised LD Name and Logo is distinctive. For convenience I reproduce again the LD Name and Logo used from 2006 to trial:
I consider it well distinguishes the PDC directories.
596 Fourthly, while both directories used yellow covers, the overall get-up of the PDC directories was quite different. The main difference was that in 2005 and 2006 when the respondents commenced publishing yellow covered directories under the LD Name and Logo they maintained their use of a large rectangular photograph of a local landmark in the centre of the cover. Some of the consumer surveys indicated that consumers found that get-up "instantly recognisable". By then, Telstra had also moved to using large photographs on the cover of its regional co-bound Yellow Pages directories but they were stock rather than local photographs and quite different in layout. Telstra started using local photographs after the 2006 Competitive Strategy Report.
597 Fifthly, the PDC directories were materially smaller than Telstra's directories which was another important point of difference. Telstra contends that there is no evidence that consumers identify the source of directories by reference to their size. It also argues that the thickness of the rival directories varied across regions so that consumers could not draw an inference as to the source of either directory based on that feature alone. It also contends that, although the height and width of the PDC directories are usually less than the corresponding Yellow Pages, this feature cannot serve to differentiate the PDC directories to consumers who have never previously been exposed to them. It argues that those consumers would have most likely assumed that the Yellow Pages directory had simply changed size and become smaller.
598 I do not agree. Without descending into the minutiae of the rival directories in each region since June 2005 I am satisfied that the PDC directories were typically smaller in height and width, and typically appreciably thinner (depending on the region), although this appears to have changed in about 2011. I reproduce below images of the spines of four PDC directories sitting alongside Telstra's corresponding directory, namely:
(a) the 2004 Rockhampton & Gladstone PDC directory and corresponding co-bound 2004-05 Rockhampton, Emerald, Gladstone and Longreach Districts Yellow Pages/White Pages directory;
(b) the 2005/2006 Darwin PDC directory and corresponding co-bound 2005-06 Northern Territory Yellow Pages/White Pages directory;
(c) the 2005/2006 Alice Springs PDC directory and corresponding co-bound 2005-06 Northern Territory Yellow Pages/White Pages directory; and
(d) the 2006/2007 Coffs Harbour & Grafton PDC directory and Telstra's corresponding co-bound Ballina, Casino, Coffs Harbour, Grafton, Lismore, Murwillumbah directory.
It is also plain from the consumer surveys that directory users understood that the PDC directories were typically smaller than Telstra's directories.
599 The size difference also pointed to important functional differences. Mr Weissenberg's evidence and the consumer surveys indicate that functional differences between the directories were important to directory users (and therefore to directory advertisers). At one level it is just common sense that many directory users would prefer to use a directory that was smaller and less cumbersome and therefore more convenient to use. The PDC directories' smaller size also meant that they were handy for use in a car, and this utility was increased by the addition of high quality street maps (and better quality than Telstra's street maps).
600 That consumers understood that the PDC directories were more compact is clear from Telstra's consumer surveys and market research. It is apparent that many of those consumers who chose to use the PDC directories did so because of perceived benefits which included its more compact size and greater convenience.
601 Sixthly, the local focus of the PDC directories was an important point of difference. Telstra contends that there is no evidence that directory users identify the source of a directory by reference to its geographical coverage, and argues that when they receive the directory they will base their decision to keep or discard it solely on an initial impression as to its identity, and may not even notice that the coverage area of the directory is different.
602 I do not accept this. The consumer surveys show, and common sense confirms, that many directory users prefer not to have to pick their way through business advertisements that are located too far away to be convenient. As an example, one can readily understand why an Alice Springs resident with a household plumbing problem would have little interest in picking his or her way through the various classified advertisements for Darwin-based plumbers in Telstra's Northern Territory Yellow Pages directory.
603 I consider it clear that the respondents did enough to distinguish their directories. The hypothetical ordinary or reasonable directory user would not (because of the respondents' conduct) have suffered the misconception that the PDC directories were published by or associated with Telstra. It must also be said that to the extent that the rival directories became more similar in appearance that was Telstra's doing. For example, while the respondents' get-up stayed the same, over the years from 1996 Telstra's regional co-bound Yellow Pages directories:
(a) moved from no photographs or only small photographs to a greater use of them;
(b) moved from using stock photographs to using local photographs. The 2006 Competitive Strategy Report shows that before 2006 Telstra's regional directories only used generic stock photographs that were not from the local area. It recommended that the covers be enhanced "with additional local images, that are instantly recognisable by the majority of people located within the boundary";
(c) moved to using local photographs in a rectangle in the centre of the cover (in a somewhat similar design to PDC) in 2007/2008; and
(d) moved to smaller directories. For example, (as shown at [592(c)-(d)] above) Telstra's 2011/2012 and 2012/2013 directories had become smaller than the PDC directories.
604 Further, given the way in which advertisers or prospective advertisers interacted with the respondents and their directories, there is no prospect that the hypothetical ordinary or reasonable advertiser would have been left with the impression that the PDC directories were published by or associated with Telstra.
The other trade indicia
605 Telstra also relies on the respondents' use of some or each of the Other Trade Indicia from time to time as indicating that the respondents did not properly differentiate their directories. It relies on the following:
(a) from 2005 to March 2007 using the term "Yellow Section" to describe the classified listings section which was printed on yellow pages;
(b) from 2005 to March 2007 using the term a "White Section" to describe the alphabetical listings section which was printed on white pages;
(c) listing the contact details for Sensis as the first entry, and Telstra as the second in the General Enquiries section at the front of the directories;
(d) from 2000 to September 2006 having, within its pages, a depiction of two walking fingers as part of the YPA logo;
(e) from 2000 to 2006 the statement that the first or second respondent is "An international member of the 'Yellow Pages Association'" or "An international member of the 'Yellow Pages Publishers Association'"; and
(f) from 2005 to 2007, featuring a "Quick Find Index" for listings in the Yellow Section with a red coloured strip and the words Quick Find Index on the side of all pages contained in the index and the use of capitalised letters in red rectangles as a heading structure within the index.
The use of these indicia started earlier than 2005, but Telstra abandoned its claim in relation to the respondents' publication of their directories prior to that date.
606 I consider Telstra's contentions in this regard have little substance, and there are several points which may be made about the use of the indicia.
607 Firstly, the thrust of Telstra's case is that the external appearance of the PDC directories misled consumers, not the contents of the directories. The Other Trade Indicia would usually not be seen by a directory user until he or she had already picked up and commenced using the PDC directory. By that time, on Telstra's case, the user had already been enticed into the respondents' marketing web. Telstra gave little accent to the Other Trade Indicia in its case. The respondents' use of the indicia ceased in 2007 yet Telstra maintains the claim that the respondents' publication of their directories is misleading or deceptive.
608 Secondly, little cogent evidence was advanced as to the role that the Other Trade Indicia played in creating the impression alleged, namely that the PDC directories originated from or were associated with Telstra. The little evidence that was adduced tended to show that any misleading impression based on the appearance of the directory was dispelled upon its use. For example:
(a) Dr Carlyle said that once he had flipped over the first few pages of the PDC directory he could see it was "completely different" to the Yellow Pages;
(b) Ms Robertson realised that she was dealing with a PDC directory simply by looking at the cover more closely; and
(c) Mr Stoten said, and I accept, that a quick flick through the pages of a PDC directory would clarify who produced it.
609 Thirdly, insofar as Telstra seeks to rely on the contents of the directories creating a misleading impression it must also accept that the disclaimers in the directories pointed expressly in the other direction. As I detail at [80]-[81]:
(a) from 2005 the PDC directories contained a disclaimer on the first page of the A-Z listings section of the directories;
(b) from 2006 the scope of the disclaimer was expanded so that each reference to Telstra, such as in the General Enquiries section of the PDC directories was accompanied by an asterisk and the explanation that "this directory is in no way associated with, sponsored, or authorised by Telstra Corporation Limited, Yellow Pages, White Pages or Sensis Pty Ltd";
(c) from May 2007 a disclaimer was printed on the base of every alternate page of the A-Z listings section and the Classified Section;
(d) from 2000 a small disclaimer appeared under the YPPA logo including the walking fingers;
(e) from May 2007 the disclaimer was strengthened to read "Local Directories is in NO WAY associated with Telstra Corporation Limited or Sensis Pty Ltd."; and
(f) from about this time each directory included over 500 disclaimers confirming that the PDC Respondents were not associated with Telstra.
610 The disclaimers are otherwise not material to my decision. I note in passing that if (contrary to my view) the appearance of the PDC directories did create the misleading impression alleged, the disclaimers would be insufficient to dispel that impression. I say this because:
(a) none of the disclaimers appeared on the covers of the directories and they could not have come to the attention of a directory user until he or she was already using the directory;
(b) it is unlikely that directory users would read a classified directory sequentially like a novel. They would search for a category of goods or services in which they are interested by turning to the index or by going straight to the relevant heading. This reduces the likelihood that the disclaimer at the front of the A-Z listings section would have been noticed; and
(c) while the disclaimers situated throughout the directory since 2007 are likely to have come to the attention of directory users, by then the use of Other Trade Indicia had ceased.
611 Fourthly, there is nothing misleading in the use of some of the Other Trade Indicia. I say this because:
(a) the respondents had used yellow pages for the classified listings in their directories since 1994, without complaint by Telstra, and it had used white pages for its alphabetical listings. Having done so, there was nothing illegitimate or misleading in their describing the classified listings section as the Yellow Section and the alphabetical listings section as the White Section. Some description was necessary to assist the directory users. I accept that the respondents could have used other names such as "Business Directory Section" or "Classified Pages Section" for the classified listings, and A-Z Listings Section for the alphabetical listings (as they later did), but that means little; and
(b) I do not accept that the respondents' use of the colour red in their Quick Find Index and use of capitalised letters in red rectangles as a heading structure within that index conveyed a misleading impression as to the origin of their directories. An index was essential for the directories to have utility, and it was sensible for the respondents to highlight the index for the convenience of the users. While red was the colour of Telstra's index it does not signify Telstra's products. Red stands out well against yellow pages and the respondents were free to choose that colour.
I take a different view about the legitimacy of the respondents' use of the YPA logo with the walking fingers. But it appeared on one page inside the directory, with a disclaimer below it at the relevant time, and its use only continued until 2006. I attribute no significance to that use in all the circumstances.
612 I do not consider that the use of the terms Yellow Section and White Section, the use of the colour red in the Quick Find Index, or the short-term use of the walking fingers logo associated with the YPPA logo, whether considered independently or in conjunction with the other pleaded conduct, would have conveyed to the hypothetical ordinary or reasonable directory user or advertiser that a PDC directory was published by or associated with Telstra.
613 For these reasons the claims of misleading or deceptive conduct and passing off must be dismissed.