[1993] FCA 546; (1993) 119 ALR 156

[1993] FCA 546; (1993) 46 FCR 152

[1993] FCA 546; (1993) 27 IPR 321

Trade Practices Act, Section 52 - Passing Off - use of name, symbol and get-up resembling those of rival trader - names "The Kettle Chip" and "Country Kettle" - test for comparison - likely effect upon ordinary person of respondent's packaging by virtue of possible imperfect recollection of applicant's packaging - inference to be drawn from risk deliberately undertaken by the respondent in choosing packaging very similar to that of the applicant - whether the respondent had taken sufficient steps to distinguish its product - whether "Kettle" is a descriptive word - whether in any case it has become distinctive of the applicant's product - relevance of association of the word with a stylized symbol and the absence of any other brand name - whether the respondent's use of the word conveyed a falsehood - use of survey evidence - whether modified packaging continued to pass off and to contravene s. 52 because it was sustained by and continued the impression created by the earlier packaging - whether the sale of product made by the applicant on behalf of other traders and marked with a similar brand and logo, but without acknowledgment of the applicant's manufacture destroyed the distinctiveness of the brand name and logo - effect of a significant section of the public understanding the name and logo as marks of the applicant - whether all the goods manufactured by the applicant appeared to come from the same source, some being marketed by separate companies - whether the existence in a section of the public of a belief that an applicant's name is also used by others destroys the basis of a claim in passing off or under s. 52 although another section of the public regards the name as distinctive of the applicant's goods - whether the applicant by its own conduct had destroyed the distinctiveness of its name and device - whether a passing off action can be based upon a shared reputation - whether a s. 52 action may be based on a shared reputation - whether on the taking of an account of profits a respondent is entitled to rely on indirect benefits alleged to have been conferred on the applicant by its entry into the market served by the applicant.

Evidence - admissibility of survey evidence - admissibility of statements out of court indicating that the maker of the statement had been deceived by the respondent's packaging.

Trade Practices Act 1974 (Cth), ss. 52 and 53

Ciba-Geigy Canada Ltd v. Apotex Inc (1992) 24 IPR 652

LSK Microwave Advance Technology Pty Ltd v. Rylead Pty Ltd (1989) 16 IPR 107

de Cordova v. Vick Chemical Coy. (1951) 68 RPC 103

Australian Woollen Mills Limited v. F.S. Walton and Company Limited [1937] HCA 51; (1937) 58 CLR 641

Siddons Pty Ltd v. The Stanley Works Pty Ltd (1991) 29 FCR 14

R and C Products Pty Ltd v. S C Johnson and Sons Pty Ltd [1993] FCA 198; (1993) 113 ALR 487

Reckitt and Colman Products Ltd. v. Borden Inc. [1990] UKHL 12; (1990) 1 WLR 491

Italiano v. Barbaro [1993] FCA 241; (1993) 40 FCR 303

Mark Foy's Limited v. Davies Coop and Company Limited [1956] HCA 41; (1956) 95 CLR 190

Shoshana Pty Ltd v. 10th Cantanae Pty Ltd (1987) 18 FCR 285

Duracell Australia Pty Limited v. Union Carbide Australia Limited (1988) 10 ATPR 49,856

Conagra Inc v. McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 33 FCR 302

Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v. Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261

Need v. J.H. Coles Proprietary Limited [1931] HCA 55; (1931) 46 CLR 470

J.H. Coles Proprietary Limited v. Need [1933] UKPCHCA 1; (1933) 49 CLR 499

Erven Warnink B.V. v. J. Townend and Sons (Hull) Ltd (1979) AC 731

Decor Corporation Pty Ltd v. Dart Industries Inc. [1991] FCA 655; (1991) 33 FCR 397

Dart Industries Inc v. Decor Corporation Pty Ltd [1993] HCA 54; (1993) 116 ALR 385

Taco Company of Australia Inc. v. Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177

SYDNEY, 23-27 November 1992 and 15-16 February 1993

Counsel for the Applicant: Mr D. K. Catterns Q.C. with

Ms S. J. Goddard

Solicitors for the Applicant: Messrs Mallesons Stephen

Jaques

Counsel for the Respondent: Mr R. J. Ellicott Q.C. with

Mr M. R. J. Ellicott

Solicitors for the Respondent: Messrs Minter Ellison Morris

Fletcher

The Court Orders that the applicant bring in, on a date to be fixed, short minutes of orders in accordance with the findings of the Court.

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

BURCHETT J Dostoevsky once described something tedious by saying it was as dull as potatoes. Nevertheless, garnished with a touch of the exuberance of added flavours and spices, a potato can be made sufficiently tasty to tempt consumption. This case is about chip potatoes, those who produce them, and the trade names under which they are sold. The principal parties involved are the respondent (which markets its products under the long-established name of "Smith's" and is by far the largest manufacturer of potato chips in Australia), the applicant (a newcomer to the industry in 1989), and two companies referred to in the evidence as "Hawker" and "Frito-Lay" which have, since 21 December 1990 and 25 July 1991 respectively, sold potato chips manufactured and packaged for them by the applicant. In the litigation, the applicant seeks declaratory relief and an award of damages, or an account of profits, in respect of alleged contraventions and threatened contraventions of ss. 52 and 53(c) and (d) of the Trade Practices Act 1974, and for passing off. These claims arise out of the respondent's sale of potato chips under the name "COUNTRY KETTLE", which the applicant says is misleading and deceptive, and involves passing off, by reason of its own reputation in respect of potato chips sold in packets endorsed "The Kettle Chip" or "The Kettle Chip Co.". (The applicant's choice of words did not change from "The Kettle Chip" to "The Kettle Chip Co." before at earliest about December 1991.)

2. In 1989, the potato chip market in Australia was dominated by the brand "SMITH'S", which was usually represented within what might be called a four-cornered diamond. Smith's chips were mass produced to a consistent texture and flavour. Early in that year, some directors and shareholders of the applicant were preparing to put on the market a potato chip with a somewhat different texture and flavour. The difference was obtained by hand cooking in batches in a cooker. This is a process quite unlike the mass production methods employed to make Smith's chips in what is called a continuous fryer. Representatives of the applicant called upon Martins Potato Chip Company, a United States Corporation, for assistance. Martins produced what it called a "kettle-cook'd" potato chip sold in a bag picturing a red cauldron, with a spoon projecting from it, over the words "HAND COOKED". It was from Martins that the applicant acquired appropriate equipment for batch cooking of potato chips, as well as advice.

3. The evidence makes it clear that the expression "kettle cooked chip" or "kettle chip" has been used in the United States, at any rate to some extent, in recent years. (But copies of "Snack Food" magazine, an American publication, which were tendered in evidence, indicate that as lately as 1985 kettle style chips were not designated as a separate category of potato chips.) The expression seems to have been used initially to refer to hand cooked or batch cooked chips, which have, as I have indicated, qualities of taste and texture different from those of chips cooked in the continuous fryers utilized for large scale production. However, the word "kettle" seems also to have been appropriated for the purposes of some larger manufacturers whose sophisticated and sometimes computer-controlled continuous fryers have been submitted to adjustments designed to mimic the effects of hand cooking in batches. But there is nothing to suggest that consumers in Australia, or anyone else in Australia apart from a few experts or aficionados in organizations such as the respondent's, had ever heard of a commodity called a kettle chip before the applicant commenced selling its product. As the respondent's managing director conceded in cross-examination, "(t)he word 'kettle' had not been used as a descriptor of chips in Australia". It is the understanding of consumers, not that of specialists within manufacturing companies, which is important in a case of passing off: Ciba-Geigy Canada Ltd v. Apotex Inc (1992) 24 IPR 652, a decision of the Supreme Court of Canada.

4. The applicant began in late 1989 to put on the market potato chips made by the batch cooking method. Its chips were distinctive in flavour and texture, and they were sold at what was described as a premium price, under its registered business name "The Kettle Chip", in packets marked with the device of a cauldron. No product of that kind had previously been sold in Australia under that name or device. The applicant's potato chips were distributed through outlets such as garages, greengrocers, take-aways, bottle shops, newsagencies, cinemas, and chemist shops, rather than supermarkets. They were a very rapid success (a document prepared within the respondent's organization described the applicant's progress, as at 2 August 1990, by the phrase "having great success"). By February 1991, the Product Manager of the respondent was referring in writing to an objective "to combat the Kettle Chip Company". By the beginning of 1992, the applicant had seized a significant slice of the market, about five per cent, concentrated in what marketing specialists called the "route market". In a document dated 17 September 1991 prepared by a Mr Guthrie, the Group Product Manager of the respondent, in order to brief the designers of its own competing packet, the statement was made:

"In spite of the fact that none of the available brands

(emphasis added - this must be a reference to the products of

'The Kettle Chip Co.' and the products marketed by Hawker's and

Frito-Lay) have received advertising support, Kettle Chips have

sound awareness and trial levels and in the case of the Kettle

Chip Company in particular, a rich image base."

"This imagery has been directly established as a result of:

- packaging (emphasis added)

- product uniqueness

- distribution strategy".

"The sense of care and hand cooked attention is a key

attribute."

7. The "key attribute" to which Mr Guthrie referred seems to represent a justified claim. The evidence is that the applicant's product is cooked in rectangular steel vessels, heated by gas, being 3 1/2 by 1 1/2 metres in size. The peeled and sliced potatoes are dropped into vegetable oils contained in these vessels, and stirred by hand by cooks standing beside the vessels until the cooking process is completed. It is obvious that this method involves temperature conditions quite different from those in an ordinary mass production process. When the freshly sliced potatoes are dropped into the oil, they must lower the temperature quite sharply, and it will thereafter rise during the cooking time. By contrast, Smith's chips, as then available, were placed in a continuous flow of slices of potato carried on a conveyer mechanism through an oil filled cooker, being turned as they passed through by automated paddles, while pumping of oil from a separate heater ensured the maintenance of a constant temperature. These differences, on the evidence, result in a distinctly different potato chip.

8. There have been some slight changes of the packet in which the applicant sold its chips, but until shortly before the proceedings it had utilized a packet which I will now describe. That packet was made of a shiny material, a kind of foil. The material itself on the outside of the packet is white, but a large part of the face of the packet (visually more than 50% of it) is covered with a picture of golden potato chips in two shades of colour. In the centre of these, a large ring of white has been drawn, with red borders on both the outside and the inside of the ring. In the white ring itself, between the red borders, appear the words in deep blue "HAND COOKED POTATO CHIPS". Inside the ring is a picture, substantially in yellow and a yellowish brown which blend with the golden chips outside the ring. The picture is of a round cauldron with some flames at its base and two licks of steam in yellow and white coming from within it. It is a distinctly stylized representation. Beside the cauldron (which is marked with black letters "TM") are potatoes, some piled up and some in a bag. Just above the cauldron is written in large and heavy deep blue letters, with much less conspicuous silver edging, "The Kettle Chip". Against the word "Kettle" again appear the letters "TM". Above the large deep blue words "The Kettle Chip" (by far the largest and most prominent words on the packet) is a light blue patch containing the information, written in much smaller white letters, "Lightly Salted" - other packets have a patch of a different colour with an announcement of a special flavour, as, for example, "Chilli Flavour", or "Thai Spice Flavour". The packet is also endorsed with the slogan in fairly small red letters: "Taste the difference]" At the bottom, on a deep blue banderol, edged with silver, the words appear in white: "CHOLESTEROL FREE"; and at the very bottom appears in deep blue: "100g NET".

9. On the back of this packet, on a white background with just a slight intrusion at the edges of the golden potato chips from the face of the packet, there is some information, in comparatively small print. There is also a repetition of the red appeal: "Taste the difference]" The information is in blue letters, as follows (for convenience, I have altered slightly the positioning of some sections in reproducing the material here):

"No Artificial Colouring, Preservatives or Flavours

Here at the Kettle Cooked Chip Company we hand cook our chips

in large kettles in the old fashioned manner.

We use only specially selected potatoes and blends of the

highest quality, cholesterol free vegetable oils.

Kettle cooking is an exacting slow process which gives our

chips a unique crunchier texture with a more distinctive potato

taste.

The Kettle Cooked Chip Company Pty. Ltd. (this was, but is no

longer, the name of the applicant) an Australian Owned Company.

PRODUCT OF AUSTRALIA

Nutritional Information: per serve of 100g

Energy ............................3012 kj

Protein ........................... 4.4 g

Oil ...............................38.0 g

Carbohydrate Total ................53.3 g

Sugars less than .................. 0.1 g

Cholesterol ....................... 0.0 mg

Sodium ............................ 186 mg

Potassium .........................1110 mg

THIS PRODUCT HAS NO ADDED M.S.G., AND IS FREE OF TROPICAL

OILS, ie. (PALM AND COCONUT).

Ingredients: Potatoes, Soya Bean and Cotton Seed Oil,

Sea Salt.

Manufactured by: The Kettle Cooked Chip Company Pty. Ltd.

20 Anderson Street, East Botany, NSW 2019.

Ph: (02) 316 5599

100g NET".

10. A later packet is almost identical, but the white ring on the face of the packet is bordered in light blue instead of red; the words "Taste the difference]" have been written in black instead of red; and the dominant name in deep blue has been changed to "The Kettle Chip Co.". No significant alteration has been made to the back of the packet, unless the change of colour of the words "Taste the difference]" is significant. Other small variations from the standard "Lightly Salted" packet were in evidence.

11. In April and May 1992, the respondent brought onto the market a new line of potato chips closely resembling the potato chips sold by the applicant. The respondent's chips were not produced by a batch cooker, or by any means which could possibly be described as hand cooking, but by a multi-zone fryer designed to mimic closely the cooking process undergone by potato chips in a batch cooker such as that used by the applicant.

12. The respondent also utilized a 100 grammes packet of the shiny foil kind. The face of its packet presented the appearance of being covered with golden potato chips, pictured in two shades of gold, virtually identical to those appearing, pictured in the same two shades, on the face of the applicant's packet. In the centre, instead of the applicant's white ring, there was a large rectangle, almost a square, containing, on a deep blue background, in big white block letters, the words:

13. The letters were edged in red. Above the words "COUNTRY KETTLE", which took up about two thirds of the square, as it appears to the eye, was a picture the most prominent feature of which was the upper part of a cauldron very similar to the applicant's cauldron, with some potatoes piled up to its left, where the applicant also had potatoes piled up. From the top of the cauldron are two licks of steam in white. In the left background is a stylized representation of a house, with trees and indistinct fields extending from it, but the house is very much smaller and less conspicuous than the cauldron, and than even the pile of potatoes. Also quite inconspicuous by comparison with the block letters in white, edged with red, and the cauldron and potatoes, speaking of the visual impact of the packet, is a representation of the Smith's diamond, intersecting the upper border of the square, within which are the words "POTATO CRISPS" in black on yellow, surrounding the word "SMITH'S" in white upon a small piece of red background. It will be remembered that the words "COUNTRY KETTLE" are edged in red, and their dominance over the word "SMITH'S" is indicated by the fact that each of them is over five times as high as the letters S, M, H and S of "SMITH'S" (the letters I and T have been enlarged, but are still not at all prominent). The marking of the packet with the information "100g NET" is virtually identical, in size as well as in letter and figure type, with the same statement appearing on the applicant's packet, except that the respondent has put it in red letters and placed it at the top of its packet, and not at the bottom, where it appears on the applicant's packet. Below the square, in a position closely corresponding to that in which the same words are written in white block letters on the applicant's packet, the respondent has in red block letters, but without any banderol, the words "CHOLESTEROL FREE". The edge of the square in the centre of the respondent's packet is outlined by thin silver lines so as to create a border. As the square itself is in a deep blue very similar to the deep blue used by the applicant, so this border is in a light blue closely resembling the light blue used on the applicant's packet of lightly salted chips. Picked out in white block letters at the top of this border are the words "SLOW COOKED", at the bottom "POTATO CHIPS", at the right side "SEA SALT", and at the left side "KETTLE STYLE".

14. On the back of the respondent's packet, which is deep blue, is a smaller, but still prominent, repetition of the words "COUNTRY KETTLE", and a smaller and not very prominent representation of the Smith's diamond and the words in it. There is a number of other endorsements, including the following:

"THE TASTIEST KETTLE STYLE

CHIPS YOU'VE EVER EATEN

Welcome to the delicious, slow cooked taste

of Smith's Country Kettle Potato Chips.

Our kettle style chips are cooked slowly in an

exacting process, using the finest vegetable

oil and a light sprinkling of sea salt.

The result is a delicious, crunchier chip

with a distinctive potato taste.

We're sure you'll agree they're the tastiest

kettle style chips you've ever eaten.

Should this product in any way fall below the

high standards you expect, or should you

require information about Smith's Country

Kettle Potato Chips please call our Consumer

Information Centre on 008 025 789.

NUTRITION INFORMATION

SERVINGS PER PACKAGE (2)

SERVING SIZE 50g

PER SERVING (50 g) PER 100 g

ENERGY 1045 kj 2090 kj

PROTEINS 3.3 g 6.6 g

FAT 14.0 g 28.0 g

CARBOHYDRATE

- TOTAL 29.5 g 58.9 g

- SUGARS 0.2 g 0.4 g

CHOLESTEROL NIL NIL

SODIUM 225 mg 510 mg

POTASSIUM 750 mg 1500 mg

SUBJECT TO SEASONAL VARIATION

KETTLE STYLE

POTATO CHIPS

INGREDIENTS: POTATOES,

VEGETABLE OIL, SEA SALT.

NO ARTIFICIAL COLOURS.

NO ADDED MSG.

NO PRESERVATIVES.

CCA Snack Foods

MADE IN AUSTRALIA BY

CCA SNACK FOODS PTY. LIMITED

71 MACQUARIE STREET

SYDNEY N.S.W. 2000

TM TRADE MARK"

15. A mere recitation of the words, colours and pictures upon these packets makes it clear that there are a number of points of close resemblance. But my description cannot do justice to the visual impact. Nor of course can black and white reproductions, but for what they are worth, such reproductions are appended to these reasons. Placed side by side, the packets resemble each other markedly. There is a strong impression of the colours gold, deep blue, and white, created in each case by the picture of potato chips and the cauldron, as regards the gold; by virtually the same blue being used for the applicant's "The Kettle Chip" and for the respondent's strong background to its otherwise substantially white "COUNTRY KETTLE" (both blues associated with silver), as regards the deep blue; and by the central white ring (which is actually intersected by the word "Chip" forming part of the expression "The Kettle Chip") on the applicant's package, and the white used for the words "COUNTRY KETTLE" on the respondent's package, in the case of the white. The shape and colours of the cauldron match with some precision, down to such details as the potatoes piled to the left of it and the two licks of steam coming from it. Even the one difference, in this respect, the absence of a bag of potatoes from beside the respondent's cauldron, is subtly balanced by the drawing in of potatoes floating within the circle forming the top of the cauldron in a way which matches the applicant's picture of potatoes within the circle described by the top of its bag.

16. 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. Only a rare potato chip consumer, who has previously studied the applicant's packet, is likely to go through that exercise again upon seeing a packet, some time later, on display in a service station or a corner shop. If, as he passes it, it appears to him to be the "Kettle" product he liked before, or another flavour put out by the same people, he is very likely to purchase it without further examination. (Cf. Lockhart J's reference in Bridge Stockbrokers Ltd v. Bridges [1984] FCA 391; (1984) 4 FCR 460 at 474 to "the mere seconds which are frequently involved in making decisions to buy many products"; and see the similar remark of Gonthier J in Ciba-Geigy Canada Ltd v. Apotex Inc (supra) at 661. See also LSK Microwave Advance Technology Pty Ltd v. Rylead Pty Ltd (1989) 16 IPR 107 at 115.) If he retains a memory of a round cauldron, with two licks of steam, against a rich background texture of two-toned golden potato chips, a pile of potatoes to the left, and some potatoes within a circle, he will need to have a very accurate visual recall, and to be very observant or attentive, to notice the differences - that the bottom of the respondent's cauldron is not visible, the addition of the little house, and the matter of the bagged potatoes. The virtual identity of the strong colour impact of the two shades of gold, the strong dark, and the contrasting light, blue, the strong white, and the touches of red and silver - with no sign at all of a different colour, except a tiny amount of green near the respondent's little house and some relatively inconspicuous black (which it will be recalled the applicant also used on its later packet) - could only drive the impression firmly into the casual consumer's mind. Strong symbols, strong colours, and the striking word "kettle", taken together with other language links, had the capacity, in my opinion, to overwhelm, for many customers, any latent or imperfect memory associating these things with the applicant's ring, as a feature different from the respondent's square, as well as other smaller differences. As Lord Radcliffe said in de Cordova v. Vick Chemical Coy. (1951) 68 RPC 103 at 106: "(I)n most persons the eye is not an accurate recorder of visual detail, and ... marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole". Very many purchasers in the route trade will be casual consumers. It is to be expected that, quite often, the much less noticeable reference to Smith's will be overlooked, as indeed, the evidence shows, was the express intention of those who commissioned the design of the respondent's packet.

17. The test to be applied in a case of this kind was stated in the joint judgment of Dixon and McTiernan JJ in Australian Woollen Mills Limited v. F.S. Walton and Company Limited [1937] HCA 51; (1937) 58 CLR 641 at 658:

"In deciding this question, the marks ought not, of course, to

be compared side by side. An attempt should be made to estimate

the effect or impression produced on the mind of potential

customers by the mark or device for which the protection of an

injunction is sought. The impression or recollection which is

carried away and retained is necessarily the basis of any

mistaken belief that the challenged mark or device is the same.

The effect of spoken description must be considered. If a mark

is in fact or from its nature likely to be the source of some

name or verbal description by which buyers will express their

desire to have the goods, then similarities both of sound and

of meaning may play an important part. The usual manner in

which ordinary people behave must be the test of what confusion

or deception may be expected. Potential buyers of goods are not

to be credited with any high perception or habitual caution. On

the other hand, exceptional carelessness or stupidity may be

disregarded. The course of business and the way in which the

particular class of goods are sold gives, it may be said, the

setting, and the habits and observation of men considered in

the mass affords the standard. Evidence of actual cases of

deception, if forthcoming, is of great weight."

18. (As regards their Honours' concentration on "ordinary people", cf. the remark of Neville J in Henry Thorne and Co. v. Sandow (1912) 29 RPC 440 at 453, which is discussed and approved by Gonthier J (with whom La Forest, L'Heureux-Dub and Iacobucci JJ concurred) in Ciba-Geigy Canada Ltd v. Apotex Inc (supra) at 661. Neville J said that "you must deal with the ordinary man and woman who would take ordinary care in purchasing what goods they require". See also Siddons Pty Ltd v. The Stanley Works Pty Ltd (1991) 29 FCR 14 at 17-18.)

19. In Australian Woollen Mills, a telling observation was made by Evatt J, in the course of his dissenting judgment, at 668:

"It is undoubted that it was decided (by the defendant) to

appropriate as much of the plaintiff's valuable business

connection as was possible. ... The defendant deliberately

chose to use its mark in connection with the same class of

serge goods as were sold by the plaintiff. In my opinion, the

risk deliberately undertaken by the defendant was so great that

taking it could only be justified by the practical certainty of

gain at the plaintiff's expense if the risk came off."

20. This reasoning is applicable to the present case. The respondent, although not producing a hand cooked chip, set out to duplicate the characteristics of the applicant's product. It went further. The evidence shows plainly that a sophisticated analysis was attempted of the image which the applicant had created for its product in the market, as well as of the product. The respondent then set out to give its own product that same image, in order to win back the customers who were buying the applicant's potato chips - to regain lost market share from the applicant was, according to the respondent's Sales and Marketing Director, "the primary objective" of "COUNTRY KETTLE". In doing so, the respondent deliberately subordinated its name of Smith's in favour of adopting and emphasizing a name that used the key word in the name under which the applicant had sold the same product. As well, the respondent placed on its packets the pictures of potato chips, potatoes and a cauldron that I have described. These had not previously been used in this way by the respondent, but they plainly evoked strikingly similar representations used by the applicant. I have already mentioned other details which greatly reinforced the impression. It is obvious a considerable risk was taken of an adverse court decision, and there is express evidence that the legal implications were discussed. In these circumstances, the inference is strong that persons expert in the trade (the respondent's own executives) considered there was much to gain from the use of so close an imitation of the name, symbol and get-up of the applicant's increasingly popular product. The expert expectation of that gain tends to confirm that the situation was one in which there was a likelihood of such a degree of confusion of the products as to provide a fertile soil for deception. Cf. Kolotex Glo Australia Pty Limited v. Sara Lee Personal Products (Australia) Pty Limited (Wilcox J, unreported, 3 June 1993) at 11-12. As Gonthier J said in Ciba-Geigy Canada Ltd v. Apotex Inc (supra) at 660:

"The author (he was referring to the civilian lawyer Chenevard)

describes ... certain situations which, if the manufacturer

succumbs to temptation, will easily lead him to commit the tort

of passing off:

'(TRANSLATION) Seeing the success of his competitor's product,

he had the idea of profiting from it: since this article, this

shape, this packaging had met with public favour, why not copy

it? - since this trade name had made its way in the world, why

not adopt a similar one?'

The purpose of the passing off action is thus also to prevent

unfair competition. One does not have to be a fanatical

moralist to understand how appropriating another person's work,

as that is certainly what is involved, is a breach of good

faith."

21. (Of course, merely to produce something exactly like a well known article sold by someone else is not wrong.) The remarks of Gonthier J may be compared with the quite similar point made by Lockhart J in Bridge Stockbrokers Ltd (supra) at 473-474, although Lockhart J was directing his attention specifically to s. 52 of the Trade Practices Act. What is really the same proposition was stated, nearly a century and a half ago, by the Vice-Chancellor of England, Sir Launcelot Shadwell, in Hine v. Lart (1846) 10 Jur 106, the case of the "Ethiopian" black cotton stockings, where the defendants claimed the name "Ethiopian" was not exclusive to the plaintiffs. Sir Launcelot Shadwell said (at 107):

"That there is much contradiction upon the affidavits, is

certain; but I cannot but be impressed with the fact, that, if

the defendants did not think that the plaintiffs had a

beneficial right in the use of the mark, they should, meaning

to make an imitation of it, have made so perfect an imitation

as they have done, the difference being only nominal. It is

clear, upon the face of it, that the defendants knew that they

might gain an advantage to which they were not entitled by so

doing. My opinion is, certainly, to continue the injunction".

22. The inference suggested by the comment I have cited from the judgment of Evatt J in Australian Woollen Mills will, of course, be more readily drawn if those responsible for a respondent's packaging are kept out of the witness box. They will then have provided no answer to displace the natural conclusion from their dangerous choice of a name, symbol and get-up remarkably evocative of those of the applicant. In this matter, two of the executives of the respondent most closely associated with its choice of the name "COUNTRY KETTLE" and its packet design have not been called. When the Sales and Marketing Director of the respondent, Mr Reeves, was asked about important research commissioned for the purposes of the planning of the launch of "COUNTRY KETTLE" on the market, he said: "Oh, that would have been used by the marketing people, the people working on the project", and referred to these two executives. Although one, Bronwyn Heys, is now in England, but only since two or three months before the hearing, the other, Michael Guthrie, is in New South Wales. Affidavits could have been obtained from both. They held the positions of Product Manager and Group Product Manager at the relevant time. The principle of Jones v. Dunkel [1959] HCA 8; (1959) 101 CLR 298 is plainly applicable.

23. In The Freeman Cosmetic Corporation v. Jenola Trial Pty Ltd (trading as South Pacific Cosmetics) (Jenkinson J, unreported, 18 October 1993), the display by the respondent of hair care products in bottles strikingly similar in style to those of the applicant, though bearing a plainly different brand name, was held to constitute both contravention of s. 52 and passing off. Jenkinson J pointed out that

"the trade names do not attract the eye unless the parties'

bottles are viewed together. What attract the eye, in the case

of each of the parties' bottles, are the general shape of the

bottle (including its cap), the vivid fruit or floral label, as

without careful inspection the representation appears to be,

the clearly defined rectangular areas superimposed on the top

and the bottom of that representation and a clear, spare black

print on white background within the rectangles. Those are the

features which remain in recollection. Because the applicant's

bottles are not sold by retail where the respondent's bottles

are sold, the two distinctive trade names will not be brought

to the consumer's observation together at the place where he

decides to buy. I am persuaded that a substantial number of

consumers of hair care products, being reasonable members of

that class, had before March 1993 taken the get-up of the

applicant's bottles to be indicative of a particular origin,

and that of that number a substantial proportion were misled on

seeing the respondent's bottles on Coles shelves, by the

similarity of get-up, into the mistaken belief that they were

looking at bottles of that particular origin."

24. Although, in the present case, the products will sometimes be sold together, this, on the evidence, is certainly not invariably the case, and there is the very important added consideration that, far from there being distinct trade names, the respondent has taken the most significant word in the applicant's name as part of its own. In my opinion, allowing for the differences between the cases, the reasoning of Jenkinson J is powerfully supportive of the present applicant's contentions. See also Kentcliffe Pty. Ltd. v. Supa-mesh Sales and Services Pty. Ltd. (1993) ATPR 41,351.

25. Even if (as the respondent contended) the word "Kettle" and the symbol of a cauldron, although each was marked "TM" for trade mark, did not in themselves exclusively identify the applicant's goods for "a significant number of consumers in the relevant market" (Johnson and Johnson Australia Pty Limited v. Sterling Pharmaceuticals Pty Limited [1991] FCA 310; (1991) 30 FCR 326 at 336, per Lockhart J), there can be no doubt on the evidence that its packet, including that word and symbol together with all the other features I have mentioned, did identify its potato chips for a great many people. It had sold millions of packets so marked. The respondent's choice of a packet design so closely resembling the applicant's is eloquent and expert testimony to the attractive power of its combination of features. Once the respondent made that choice, even if it acted honestly in doing so (and in all the circumstances I do not think it did), it came under an obligation to take particular care to ensure that its product was adequately distinguished from that of the applicant. Lord Oliver of Aylmerton put the matter strongly, with reference to a not dissimilar context, in Reckitt and Colman Products Ltd. v. Borden Inc. [1990] UKHL 12; (1990) 1 WLR 491 at 507-508 (a passage cited by Davies J in R and C Products Pty Ltd v. S C Johnson and Sons Pty Ltd [1993] FCA 198; (1993) 113 ALR 487 at 493-494):

"In the end, the question comes down not to whether the

respondents are entitled to a monopoly in the sale of lemon

juice in natural size lemon-shaped containers but whether the

appellants, in deliberately adopting, out of all the many

possible shapes of container, a container having the most

immediately striking feature of the respondents' get-up, have

taken sufficient steps to distinguish their product from that

of the respondents. As Romer LJ observed in Payton and Co.

Ltd. v. Snelling, Lampard and Co. Ltd., 17 RPC 48, 56:

'when one person has used certain leading features, though

common to the trade, if another person is going to put goods on

the market, having the same leading features, he should take

extra care by the distinguishing features he is going to put on

his goods, to see that the goods can be really distinguished

...'

I stress the words 'to see that the goods can be really

distinguished,' ... ."

26. I have reached the clear conclusion that the respondent was guilty of passing off, as well as of contravention of s. 52 of the Trade Practices Act.

27. In so finding, I have not needed to go to the quite voluminous evidence ("such a volume", the respondent's counsel termed it, in the course of objecting to its admissibility) tendered to show instances of actual deception. The packets speak for themselves. And what they say is supported by much of the respondent's own evidence, which attests to the drawing power of the applicant's name and get-up, and to the respondent's desire and intention to place itself before consumers, so far as it could, in the same guise. But, while there was much evidence in an inadmissible form, whether as hearsay or for other reasons, there was also admissible evidence of actual deception, which was not challenged, and I accept that evidence, the tender of which was not in my opinion unfair to the respondent, as confirming the conclusion I have reached on the deceptive nature of the "COUNTRY KETTLE" packaging. For example, the affidavit of Sabine Danelon, a marketing assistant with the applicant, provided evidence of her own deception for some time (before she took up employment with the applicant), and of customers' complaints made to her, on a number of occasions, about "COUNTRY KETTLE" potato chips, obviously on the assumption that they were a product of the applicant's manufacture. Another example is the affidavit of Joseph Curmi, the applicant's purchasing manager, which shows that the President of a soccer club sponsored by the applicant and provided with free potato chips was, according to his spontaneous protest to the deponent "They're your chips", completely deceived by "COUNTRY KETTLE". The evidence of the complaints and protest was, I think, admissible on the principle discussed in Italiano v. Barbaro [1993] FCA 241; (1993) 40 FCR 303 at 320, which applies to states of mind generally. See also Interlego A.G. v. Croner Trading Pty Limited [1992] FCA 624; (1992) 39 FCR 348 at 389-390. Indeed, the respondent's own documents included confirmation that it had created the impression of being the company that dealt in "Kettle" chips in reality sold by the applicant.

28. But, for the respondent, it was contended that the word "kettle" is a descriptive word which it was quite entitled to use. Of course, the mere fact that a word is descriptive does not warrant a trader in using it if it has also acquired a secondary meaning so as to distinguish the products of a rival. As Lord Radcliffe said in de Cordova v. Vick Chemical Coy. (supra) at 106:

"To say that it is descriptive would not be enough, for ...

there is no absolute incompatibility between what is

descriptive and what is distinctive. A descriptive word, such

as 'Sheen', can be recognised in law as distinctive if the

evidence clearly shows that it is distinctive in fact."

29. I cited a number of the authorities in LSK Microwave (supra), and I shall not repeat the discussion which is set out there. Since a descriptive word may be distinctive, the context and circumstances of its use must be considered. In the present case, the applicant has used the word "Kettle" as part of the only name prominently displayed on its packet, and has used it together with the very conventional cauldron also prominently displayed on the same packet, the pictures of potatoes and of golden potato chips, and the colours and other words to which I have previously referred. I have already expressed the conclusion that, taking all these features together, the respondent's packet deceptively reflects the applicant's. It would not affect this conclusion if I were to hold that the word "Kettle", considered alone, would be a descriptive word. Nor would the conclusion be affected even if I were to hold that the word would have, considered alone, no secondary meaning distinguishing the applicant's product.

30. In any case, I have great difficulty with the proposition that the word "Kettle" is relevantly descriptive. It was not used as an adjective to describe potato chips in Australia before the advent of the applicant. Although the word "Kettle", as an ordinary English word, is derived from the Latin catillus, a small bowl, dish or plate (Gepp and Haigh, Latin-English Dictionary (1918); Lewis and Short, A Latin Dictionary (1896); Chambers Murray Latin-English Dictionary (1976)), in English it almost always, apart from some specialized meanings, refers to a particular kind of vessel for boiling water, and that is certainly what it ordinarily means in Australia. Indeed, so specific is the idea of a kettle, as generally understood, that when kettles became electric, those which departed too far from the familiar shape were called electric jugs. The odd expression "a pretty kettle of fish" may be thought to have retained its currency partly because of the suggestion of humour inherent in its incongruity, and its most frequent use is comical. A celebrated instance is to be found in the chorus of peers in Act II of Iolanthe. But at least that expression, as the Shorter Oxford English Dictionary makes clear, has a basis in local tradition in a part of England where "a kettle of fish" refers to a kind of al fresco cooking. There is no such basis in Australia for kettle chips. And when the applicant's packet and displays first brought the expression before the Australian public, the words "The Kettle Chip" appeared as the only words which could possibly have been a brand name for a packet of potato chips otherwise unbranded, and appeared in close and invariable association with a stylized image of a cauldron. The cauldron, as pictured, is certainly not an actual kettle. Nor, according to the applicant's managing director, had he ever heard the applicant's batch cookers called kettles by anyone, despite what I think most people would regard as some advertising puffery on the back of the applicant's packet, and some straining of language in a few documents consumers would never see. When this word which does not naturally and readily describe a potato chip is associated with a striking device suggestive, not of reality, but of make-believe or symbolism, it is not likely to convey any clear meaning, except that of a brand name - particularly as "Kettle" is used on the applicant's packets, where it is written prominently in a place appropriate for the brand name of the chips to appear. (Cf. Mark Foy's Limited v. Davies Coop and Company Limited [1956] HCA 41; (1956) 95 CLR 190 at 194-195, per Dixon CJ) The respondent's managing director, Mr Ballard, conceded in cross-examination that consumers "may" read the words "The Kettle Chip" on the applicant's packet as a brand, and that "(i)f they perceive any brand at all, it will be 'The Kettle Chip' or some part of that".

31. Mr Ballard made it clear in evidence that, when his company used the same word and symbol on its packets, it was not suggesting its potato chips were actually cooked in either a kettle or a cauldron. So far, according to him, was reality from his company's kettle and cauldron that they did not even suggest hand cooking - which would, in the case of the respondent, have been a false suggestion. It is, indeed, illuminating to consider the respondent's contention that the word "kettle" is used descriptively by the applicant with the respondent's own use of the same word on its packet. Plainly, the descriptive words on the respondent's packet are "POTATO CHIPS". As I have said, its well known brand "Smith's" has been suppressed so far as possible, and on the evidence deliberately suppressed, in favour of what can be nothing else but a sub-brand, "COUNTRY KETTLE". That this is in fact how the expression "COUNTRY KETTLE" is used was expressly acknowledged in evidence. Given that acknowledgment, it is hard to see why the same word should not be regarded as the key word in a brand name when it is used by the applicant on the face of a packet bearing (on that face) no other brand or manufacturer's name, when there is in association with it a prominent descriptive statement about the product in the packet ("HAND COOKED POTATO CHIPS"), and when, although less prominently, the letters "TM" are also twice added to indicate that "Kettle" and the device of a cauldron are indeed the trade marks they appear to be.

32. If "kettle chip" is a descriptive expression, one would think it must suggest that the chip in question has been cooked in some relatively small container which could be described as a kettle. Since, at the time the respondent launched its product, the Australian consumer knew the expression only in connection with potato chips manufactured by the applicant and sold by it as "HAND COOKED POTATO CHIPS", or by Hawker or Frito-Lay in packets which also, in each case, prominently denoted the product as "HAND COOKED POTATO CHIPS", any descriptive meaning the expression may have had at that time, in Australia, must have included the idea of hand cooking. The respondent sought to rely upon some opinions, expressed in qualitative market survey reports, that consumers did not believe the applicant's product was hand cooked. But its own Group Product Manager, in a document to which I have already referred, asserted the contrary. The document was central to the respondent's decision to package its own product as it did, and I am satisfied that in this respect it reflects an expert assessment of the situation. It treats the image achieved by the applicant's brand (that is, "The Kettle Chip") as resulting in part from its packaging, and as including "the sense of care and hand cooked (emphasis added) attention (as) a key attribute". The Group Product Manager's view was supported by a market research report of October 1991, to which I shall refer later in these reasons.

33. On this basis, the appropriation by the respondent of a word which had a clear meaning only as the name under which the applicant made hand cooked potato chips or, at best for the respondent, under which the applicant, Hawker and Frito-Lay sold hand cooked potato chips, when the respondent produced potato chips that were in no sense hand cooked, suffered from precisely the vice identified by the House of Lords in Powell v. The Birmingham Vinegar Brewery Company, Ld (the "Yorkshire Relish" case) (1897) 14 RPC 720. There, it will be recalled, the appellants claimed that "Yorkshire Relish" was the name of a kind of sauce, and that they were entitled to make it and sell it under that name just as much as was the originator. However, the House of Lords held their sauce might be like the originator's, but it could not be the same since the recipe was secret. They were therefore passing off a different product as "Yorkshire Relish" to the detriment of the originator, who had a goodwill in relation to the sale of the product that did answer to the name. Even on the view that consumers understood the expression "hand cooked" in a less than literal sense, it is plain, from the Group Product Manager's document and research reports obtained by the respondent, that they understood it as at least denying that these potato chips were mass produced. The respondent was, then, using the already established "kettle" name to make a subtle suggestion of a falsehood: cf. R and C Products (supra) at 500.

34. But Mr Ballard gave evidence in support of a descriptive meaning of the word "kettle" as signifying "a particular style" of potato chip,

"being a chip that is made in a slower process, it is a chip

which is irregular in shape, in fact frequently curled, often

has bubbles on it, it is of a significantly harder bite and

tends to be, although there is a variation between processes

and manufacturers, a little more oily to the taste."

"(W)hen you are trying to signify to consumers that 'kettle'

meant a chip with these attributes you were counting on some

knowledge that consumers had?"

36. he replied: "From those three suppliers, yes." One may well ask, how else could that particular understanding have been acquired? The three suppliers to whom he there referred were the applicant, Frito-Lay and Hawker. He had mentioned earlier a fourth supplier, a company known as Bluebird, but that was a New Zealand company which, I am quite satisfied, was at all relevant times virtually unknown in Australia as a supplier of potato chips. There was evidence of an isolated consignment or consignments finding a way into Australia, but an executive of Bluebird called by the respondent did not suggest his company had ever sold into the Australian market. On the evidence, I find that there was no significant awareness in Australia of the Bluebird potato chips which were associated with the "kettle" name in New Zealand. In cross- examination, Mr Ballard really abandoned reliance on Bluebird. He gave the following evidence:

"You used the word 'kettle' in an attempt to tap into the

category established by the Kettle Chip Company?---We used the

word 'kettle' because that clearly was the best descriptor, the

most recognised descriptor, in regard to chips with the

characteristics that we're talking about.

So it described the chips in the category established by the

Kettle Chip Company?---Established in this country by the

Kettle Chip Company, yes and their other two associates.

And you chose the cauldron to tap into the type of chips or

category of chips established by the Kettle Chip Company?---

Yes. The indication from research was that the cauldron was an

important - let us say a communicating symbol that communicated

that they were chips of this style.

You chose those two things with your eyes wide open as to the

risk that the Kettle Chip Company might bring legal proceedings

against you?---Yes, and that's precisely why we took very

careful advice before going into the market place.

. . .

I want to suggest in general terms that some of your market

research indicated that the Kettle Chip had achieved the status

of a brand or a product name?---Yes, and some of the later

research indicated that it was a descriptor and not a brand.

Now, whether the change between those two views was brought

about by the fact that there were then two other brands on the

market which appeared to be independent offers, using the same

word, I suspect that's what occurred.

And you think it is important, in what you just said, that the

research that came up, using the term generally, that it was a

brand, was before that which came up with it being called a

descriptor?---Sorry, I think it's important - I am just

reflecting on what I understand research showed at different

periods.

If it is the case that the descriptor research was before brand

research - I mean, the research that resulted in those two

findings - that would be contrary to what you just said?---It

would depend on - I'm not sure how precise - how precisely one

can read into those research results in that sense, certainly,

our very clear belief and research is, as I said, is one of the

guides to decision-making, as is talking to the trade and many

other inputs in terms of information, but it was (our) very

clear belief at the time of launch that Kettle was a descriptor

and that it was relevant in regard to this style of product and

that therefore it was important to us to use it and that after

very careful checking we had the right to use it and that it

was important that we should use it in a way that we could

build a brand franchise of our own under the Smith's umbrella

to produce a distinctive product that, in the long term, would

give us a consumer franchise that was ours and that is what we

have always set out to do with this product and every other

product that we launch.

If it were perceived as a brand rather than a descriptor then

there would be a risk that people would - - -

MR ELLICOTT: If what was, do you mind just - - -

MR CATTERNS: If the word Kettle or the Kettle chip - if the

word Kettle, in the context of the Kettle chip were perceived

as a brand rather than a descriptor, then there would be a risk

that people might be confused as between your product and

theirs?---Frankly, I think the chance of people being confused

between our product and theirs - and if one puts the two

products side by side - the chance of confusion is minimal. If

one also puts to that the circumstances of the level of

awareness of the products and the category at the time we

launched, if one puts with that the amount of advertising we

have put behind our brand, if one puts with that the work we

have done in terms of product display - particularly large

displays in supermarkets - I think we have done a sound job in

establishing that that product is a brand - is a product that

is distinctive is of our manufacture and no one else's.

If you could just go back to the day before you launched and so

subtract from that answer the notion of your promotion since

launch, work in stores, advertising and so on, if it be the

case that some consumers treat the word kettle in this context

as a brand name, and then they saw something called Country

Kettle, there is a possibility, is there not, that they would

be confused?---Mr Catterns, your question said if it doesn't

address how many consumers it is quite clear - - -

HIS HONOUR: No, no, that is not the question you were asked?---

Sorry?

Could you put the question again?

Look, you are asked a particular question and counsel is

entitled to an answer to his question, not a little essay about

what you thought about things.

MR CATTERNS: If it be the case - and just accept that as an

assumption - that a significant number of consumers did

perceive 'kettle' in this context as a brand name, then the day

before your launch there would be a risk that some of those

consumers would be confused when they saw your product?---For

those consumers who held that view, I guess the answer would be

yes; whether they were a significant number I think is probably

very debatable."

37. I did not find Mr Ballard an impressive witness. I formed the view that some of his answers were disingenuous, and that his evidence was not reliable. There are some examples in this passage. The suggestion that later research had shown a change in the market-place from an understanding of "the Kettle Chip" as a brand to an understanding of these words as conveying a description was quite misleading. A great volume of market research material utilized by the respondent in preparing for its launch of "COUNTRY KETTLE" was introduced into evidence. It does not show what Mr Ballard suggested, and I am satisfied that Mr Ballard, who at other points in his evidence professed unfamiliarity with it, apparently on the basis that it concerned an area for which Mr Guthrie was responsible, had no proper basis for his suggestion. Indeed, the source of the idea that market research had indicated that "Kettle" was a "descriptor", and not a brand, is a comment, not in "some of the later research", but in a report dated October 1991 prepared by Yann Campbell Hoare Wheeler, a firm involved in market research. But this report is headed "A QUALITATIVE INVESTIGATION OF KETTLE CHIPS AND THE POTENTIAL FOR SMITH'S TO ENTER THIS MARKET SEGMENT", a heading which would seem to assume that "kettle chips" is a descriptive expression. That this was indeed a fundamental assumption of the entire report is made crystal clear by the second of a series of "research objectives" set out at its beginning: "To uncover what the descriptor, 'Kettle' means to consumers, and hence determine the equity inherent in this variant name." (In market research, the evidence indicates, the word "equity" refers to value or reputation.) This objective makes it plain that the comment in the course of the report, "'Kettle' is a variant descriptor, not a brand", is not a conclusion of the research, but a central assumption upon which it was undertaken. It is therefore all the more significant that the same report includes references, in relation to "Kettle Chips", to "this brand" and "other brands". Actually, the comment about "kettle" as a variant descriptor, not a brand, was made in relation to the findings of that part of the survey in which the applicant's products were compared with the Frito-Lay product (of which the report says "few had heard about" them) and overseas products which appear to have been referred to as "Kettle Chips". That the expression "kettle chips" may have been understood, in that special context, and in a survey conducted upon the fundamental assumption which governed this survey, to convey a generic meaning, is hardly surprising. But, as the other language I have quoted indicates, the expert researchers themselves saw "Kettle" as a brand, and they also reported on the particular packaging in which the applicant sells its potato chips, reaching the conclusion: "'Hand-Cooked' plays a supportive role in the development of a 'cotagey' (sic) not mass-produced image, and contributes to the acceptance of the product's premium price." They considered:

"A (subconscious) perception exists that these chips are made

by a couple of people in their back yard somewhere. This myth

would not be sustainable if the Kettle Chip Company were seen

to be spending a lot of money on advertising."

38. They reported on the claim that there was no cholesterol in these potato chips, and specifically quoted the very percentage of oil stated on the applicant's packet; having regard to that, there can really be no argument that the reference to "other brands" is made on the basis that "kettle" is the brand of the applicant, which was of course the rival of principal concern to the respondent.

39. It should be pointed out that the research which led to this report was watched by representatives of the respondent, who were probably the same senior executives of the respondent's marketing team, already mentioned, from whom the respondent failed to tender any evidence - the Product Manager, Bronwyn Heys, and the Group Product Manager, Michael Guthrie. I can accordingly with greater confidence draw the inferences concerning this report which I have drawn, since those inferences, if they had been incorrect, could have been dealt with by witnesses of expertise who saw how the survey was conducted.

40. There were later reports, from a different market research organization. The Leading Edge, market research consultants who had been engaged previously (as the respondent's Sales and Marketing Director, Mr Reeves, stated) in order (inter alia) "to identify consumer ... perceptions of a kettle style chip in terms of ... brand ... and descriptor", presented to the respondent a further report dated February 1992, only a few months before the launch of "COUNTRY KETTLE". The Leading Edge reported that "existing Kettle consumers widely imagined Kettle to be a brand (emphasis original)". The evidence does not indicate how large was the sample from which this conclusion was drawn, but it was drawn by experts in market research, and the report indicates that the representative of the respondent with whom the market researchers directly dealt was again Bronwyn Heys. It is extremely unlikely that she was not aware of so basic a matter as the representativeness of the sample, about which she must almost certainly have enquired immediately upon receiving the report, if she had not already known it. It is practically certain she passed the report on to Mr Guthrie.

41. An even later report from The Leading Edge is dated April 1992, on the very eve of the launch of "COUNTRY KETTLE". It referred to further research "conducted in March 1992". It dealt specifically with advertising. It involved six more "in depth interviews" with unspecified numbers of people described as "kettle trialists and non- trialists", of both sexes, in the age range of eighteen to mid to late thirties. The first of these categories refers to people who had consumed Kettle Chips, and the second refers to people who may or may not have heard of Kettle Chips but had not yet tasted them. This further report makes the statement, apparently based both on the survey conducted for the February report and the survey conducted in March, "Given that most consumers still think of Kettle as a brand rather than style of chip, the advertisement (for COUNTRY KETTLE) has to take the form of a blatant product announcement with overt branding."

42. It is impossible not to see this statement as a clear indication to the respondent, from consultants chosen as expert by its Product Manager (and presumably by the Group Product Manager with whom she worked), warning the respondent that the word under which the applicant sold its potato chips was widely seen as a brand, so that explicit differentiation, "a blatant product announcement with overt branding", would be required in the respondent's advertising. Later in the report, there is a comment about the failure of the respondent's advertisement in question to make the Smith's name "salient" (of those surveyed who had previously tried "Kettle Chips", and were shown the respondent's advertisement for "COUNTRY KETTLE", "many (emphasis added) failed to identify the product as Smith's brand" - a finding one would have expected the respondent to have found alarming), which is said to indicate "a need for more overt brand communication". Yet, the respondent went down precisely the opposite path, using the word identified as its rival's brand and deliberately minimizing its own well known brand and logo. And by way of defence, Messrs Ballard and Reeves disclaimed knowledge, apparently on the basis that these matters were left to Mr Guthrie. But if "COUNTRY KETTLE" was largely left to him, he was relevantly the mind of the company. In any case, it is very unlikely that, on so important a matter, neither Mr Ballard nor Mr Reeves was aware of the substance of the survey results. I should add that the weight of those results is not to be discounted simply because the methodology of the surveys was not settled in advance pursuant to the procedure suggested in Arnotts Limited v. Trade Practices Commission (1990) 24 FCR 313. These were surveys selected as appropriate by the respondent's own executives, presumably having expertise in the area, and by specialists engaged by them. Considerations of the kind I discussed and to which effect was given in Shoshana Pty Ltd v. 10th Cantanae Pty Ltd (1987) 18 FCR 285 at 301, and other considerations different from those involved in surveys obtained for the purpose of litigation, are likely to be applicable to surveys obtained in such circumstances.

43. Mr Guthrie, as Group Product Manager, had signed a "PACK DESIGN BRIEF", in respect of the design for the respondent's packets, before the later surveys were carried out, and no change was made. This brief, part of which I quoted early in these reasons, indicated as its first requirement that the packet should be "capable of conveying the key 'Kettle' image attributes in a warm, 'pick me up' fashion". It made specific reference to a "metalised film version" (the type of foil actually used), "a rich gold background", and the possibility of featuring the very pictorial representation which in fact ultimately appeared. It concluded:

"A final work (sic - scilicet word) on branding

While it is our objective to establish (what became COUNTRY

KETTLE) as a Smith's spin off 'range', we have had some

indications that the strong featuring of the Smith's logo may

run the risk of branding the new range as mass produced thereby

hampering its potential.

For this reason, we suggest that the featuring of the Smith's

logo be treated with caution as part of the overall design.

Normally, we would wish to utilise our diamond device and this

should be considered. Alternatively the use of part only of the

device or indeed just the word 'Smith's' may be a more

desirable approach."

44. A representative of the packaging designers, Mr Davies, gave evidence about this, as follows:

"Were you given any further instructions about the degree to

which the Smith's logo was to be featured or not featured?---

There was an investigation of how large it would be used and I

think it was established that it was to play a secondary role

in that the brief was to establish quite strongly the name of

the product.

Namely, Country Kettle?---That's correct."

45. The final decision to accept the design of the packet was admittedly made by Mr Ballard himself.

46. The following questions were put to Mr Ballard in cross-examination, concerning the report of the Market Research Consultants of February 1992:

"What I suggest is that this is a further statement by your

market researchers, that in the market research they did, those

groups in February with existing Kettle consumers, they

imagined Kettle to be a brand?---That would seem to be the case

with existing Kettle consumers.

So when you launched your product, this is not February, when

you launched your product in May it is likely that there was a

percentage of the population, whatever size, who imagined

Kettle to be a brand?---If that is correct, that is so."

47. Later, Mr Ballard was asked about the report of April 1992, which I was told without objection appeared to be concerned with an advertisement for "COUNTRY KETTLE" that was actually used, and it was put that the market researchers had reported that the groups interviewed thought of the word "kettle" as a brand. Mr Ballard suggested there had only been one piece of research reported upon three times, an answer which plainly misunderstands or misrepresents the reports. However, counsel then put to him the following questions, and received the following answers:

"I understand that, but do you agree that they are referring to

the word, 'Kettle', as a brand?---No, I don't.

Well, I suggest that you are being deliberately dishonest?---

Well, I'm not being deliberately dishonest. Perhaps if I went

away and studied this for some hours in quiet, who knows, I

might come to a different conclusion. I can't see on what we

have just been through for the last half hour or three quarters

of an hour that my conclusion is erroneous, and it is certainly

not dishonest, Mr Catterns."

48. Having heard the cross-examination at the time and considered the transcript since, I do not accept Mr Ballard's answer. I think it was plain, and plain to him, that the market research consultants were referring, in the passages in their reports in question, to a perception of the word "Kettle" as a brand. Mr Ballard's evidence made it clear that market research, of the kind these reports embodied, was something with which he was very familiar as an important tool used by him over many years.

49. In my opinion, on all the evidence, at the time of the launch of "COUNTRY KETTLE", a significant section of the relevant public perceived "Kettle" as referring to the brand of the applicant's potato chips. Despite my earlier finding about the packets in which "COUNTRY KETTLE" was originally sold, this is important because the respondent later commenced to use, and threatened to continue to use, a modified packet, deleting some aspects of the original packets and particularly the representation of a cauldron, but retaining the name "COUNTRY KETTLE". The applicant claims that by its use of the new packets the respondent continues to contravene ss. 52 and 53 of the Trade Practices Act and to be guilty of passing off.

50. There is a further basis on which I think the new packaging fails to avoid breach of the applicant's rights. The Sales and Marketing Director of the respondent, Mr Reeves, gave evidence about the new pack design as follows:

"You hope do you not that existing Country Kettle customers

will think it is the same product? I will ask that again, you

look shocked. There is no trick in it, if I can say.

I am not referring to my product, I am referring to the Country

Kettle product. Your hope is that although there has been a

change in pack design, Country Kettle customers when they see

the new pack will think that it is the same product as the one

with the old design?---Yes, because it's including the Smith's

diamond on it, it will clearly link it to the pack that they

would have previously bought.

Yes, and there are many other elements of the pack which remain

which will also link it?---Yes, the very distinctive square

border on the front of the pack, the term Country Kettle, the

over-all blue effect, all those things will link it to the

earlier package.

And your hope is really that every consumer who previously

bought Country Kettle or saw Country Kettle and liked it, or

saw the ads and thought about it, will continue to buy the new

pack, thinking it is the same?---Well certainly we would like

to think that people we've attracted to the product will stay

loyal to the product, yes."

51. In my opinion, this evidence makes it clear that potato chips sold in the new packets will continue to benefit from the goodwill of the applicant misappropriated by the original promotion and packaging of "COUNTRY KETTLE". The image of "COUNTRY KETTLE" which the respondent desired to create, and did in part create by its passing off and its misrepresentation, will continue to sustain the sale of the new packets, and will be recalled to the minds of consumers by compelling visual and other links. I considered a similar problem (arising out of some misleading television advertisements) in Duracell Australia Pty Limited v. Union Carbide Australia Limited (1988) 10 ATPR 49,856, and said (at 49,861):

"There was no suggestion that a retraction would be telecast,

or that the terms of the new advertisement would actually draw

attention to the problem created by the terms of the old. Far

from correcting the matter, if correction be needed, a change

so subtly shaded might well escape the attention of a viewer

already imbued with the existing message. The impression

originally gained might be reinforced by the repetition of a

closely similar message, not corrected."

52. On this basis, the use of the new packets will continue to involve passing off and contravention of s. 52 of the Trade Practices Act.

53. The respondent mounted a quite separate argument, based on the availability in the market of the potato chips made by the applicant under its agreements with Hawker and Frito-Lay. It was contended that the words "The Kettle Chip" and the device of a cauldron could not be distinctive of the applicant's product, since (it was argued) the public would not know that the applicant had made and packaged the potato chips sold by Hawker and Frito-Lay, although those potato chips bore the "Kettle" name and a similar device of a cauldron.

54. The first answer to this argument is that, as I have already held, the entire get-up, and not merely the name and the cauldron device, of the applicant's packets was distinctive of its goods, and was reflected in the "COUNTRY KETTLE" packets in a manner which amounted to passing off and contravened s. 52 of the Trade Practices Act.

55. The second answer is that, for a significant section of the consuming public, the word "kettle" and the device of a cauldron did in fact point, as a brand name and mark, to the applicant. This is the conclusion to which I have come on the whole of the evidence, including the expert research which the respondent itself commissioned and upon which it acted. A number of factors probably contributed to the existence of this situation. The applicant was first in the field, and its huge success, which alarmed the respondent, suggests it must have made its mark from the beginning. Figures proved in evidence showed that the applicant had sold many times the quantity of potato chips sold by Hawker and Frito-Lay combined. Although the applicant did not advertise on television (except, I think, once in Queensland), the evidence shows it obtained publicity in other ways, and advertised its product by a number of means, widely, and, as results showed, very effectively. At the date of the launch of "COUNTRY KETTLE", Frito-Lay had been in the relevant market for only an extremely brief period (about nine months), and Hawker had, to some extent at least, been restricted to a particular narrow market segment (service stations).

56. Although, as counsel for the respondent emphasized, the packets of Hawker and Frito-Lay differed from each other, and both differed from the packets of the applicant, all three emphasized the word "Kettle" (Frito-Lay had it in block letters), and all three had a similar cauldron device. The Frito-Lay product was called "KETTLE CRISPS", which was in fact a registered business name of the applicant. Frito-Lay did not place its own name anywhere on its packet. On the back of the packet, a statement was made that the product was manufactured by "Kettle Crisps" of an address which was in fact an address of the applicant. In the case of Hawker, the face of the packet included a large part of a ring, quite reminiscent of that on the applicant's packet, bearing the same words, "HAND COOKED POTATO CHIPS", which were to be found in the same location on the applicant's packet. The similar cauldron device was within that ring, just as the cauldron device was contained within the ring on the applicant's packet. Hawker's packet was prominently marked "NO CHOLESTEROL", in a manner reminiscent of the applicant's packet, and its lightly salted chips were marked "LIGHTLY SALTED" in the same part of the packet where identical potato chips marketed by the applicant were identified as lightly salted. The word "HAWKER" was less prominent than any of these notations, and much less prominent than the words "Kettle Chips". Although the only statement, on the face of the Hawker packet, of a name different from that of the applicant itself (unless "Kettle Chips" is such a statement) is the inconspicuous single word "HAWKER", there is on the back of the packet, in fairly small print, a statement

"Marketed by:

Howitt and Spencer Automotive"

"Marketed by:

Howitt and Spencer Pty Ltd",

in each case with an address at Drummoyne added. It will be observed that there is no suggestion the potato chips were manufactured by Hawker or the company named.

57. In this context, it seems to me the words of Ellicott J in Taco Bell v. Taco Company of Australia Ltd [1981] FCA 219; (1981) 40 ALR 153 at 161 are apposite:

"The ordinary public are educated to treat distinctive names

like 'Taco Bell' as representing the goods or services of

particular traders and if they are confronted by the use of

very similar names, I think it takes a great deal to remove the

assumption which they naturally make - that the goods or

services in relation to which they are used are the product of

the same or a related business."

58. Likewise, similar symbols or logos, despite differences of detail, are likely to lead to an impression of a common business, or at least of association, connection or affiliation: cf. Opals Australia Pty Limited v. Opal Australiana Pty Limited (1993) ATPR 41,556 at 41,565, per Lockhart J In my opinion, it would be natural for a person who did not know the facts to assume that the three kettle chip or kettle crisp products, which had in fact been manufactured in precisely the same way, although there were some variant flavours, came from the same source. Certainly "KETTLE CRISPS", if he looked at the packet, would not tell him anything different, while the Hawker "Kettle Chips", if he looked at the packet, would tell him only that they had been marketed by a separate company. At some stage, which I do not think the evidence identified precisely, the Hawker packets came to bear also the endorsement: "Kettle is a trade mark of the Kettle Cooked Chip Company Pty Ltd and is used under licence by Hawker Quality Products Pty Ltd." That stage, of course, must have been after Hawker passed from Howitt and Spencer Pty Ltd to Hawker Quality Products Pty Ltd, and I assume it was also after the institution of proceedings, when too a similar statement began to appear on the "KETTLE CRISPS" packets. Each statement recognizes a licence arrangement.

59. The respondent's submissions are based on the unspoken premise that the existence in any section of the public, however small, of a belief that an applicant's name is also used by others, or is open to be used by others, destroys the goodwill which the action of passing off is designed to protect, and destroys the basis of a claim under s. 52 or 53 of the Trade Practices Act. I do not think this is correct. I have already referred to a passage in the judgment of Lockhart J in Johnson and Johnson Australia Pty Limited v. Sterling Pharmaceuticals Pty Limited (supra, at 336) which treats the reputation of a mark as attaching where "a significant number of consumers in the relevant market" recognizes it as such. It is not necessary that all consumers do so, and, on that basis, it is difficult to see why the fact that some consumers positively have an inconsistent view should make any difference. Goodwill, in the law, is a protean concept, and should not be understood with reference to passing off in a confined sense: Conagra Inc v. McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 33 FCR 302 at 367. Generally, proof that a respondent's use of the applicant's name has led to confusion in the market place will indicate that there is a goodwill in the relevant sense deserving of protection: ibid at 374. In a recent discussion, "a reputation with a substantial number of persons who are or would be acquirers of (the relevant) goods or services" is treated as an essential, but it is not suggested that this reputation would be cancelled by a conflicting reputation with another group of persons: Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v. Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261 at 268-269, a joint judgment of Gummow, French and Hill JJ

60. An interesting case which tells against the respondent's argument is Need v. J.H. Coles Proprietary Limited [1931] HCA 55; (1931) 46 CLR 470, in which Starke and Dixon JJ dissented, the decision being reversed, and their dissenting judgments approved, by the Privy Council on appeal: J.H. Coles Proprietary Limited v. Need [1933] UKPCHCA 1; (1933) 49 CLR 499. The respondent in the High Court carried on the business of a number of stores in Melbourne and its suburbs under names including "J.H. Coles Stores". The appellant set up a business of his own in a Melbourne suburb under an arrangement with the respondent which was to supply him with goods sold in its stores, and he was allowed to trade under the name "J.H. Coles Store". Afterwards, when difficulties over supplies developed, the appellant had to obtain goods from other sources, but did not change the name under which he traded. Although no objection was taken at the time, subsequently the respondent brought proceedings to restrain the appellant from trading under the name "J.H. Coles Stores" or representing that his business was connected with its. Starke J (at 46 CLR 478-479) put the problem succinctly:

"On the part of the appellant the argument is that the

respondent has permitted him to build up a business in

Northcote and acquire a local reputation under the names which

he is now restrained from using. No doubt it is quite

unimportant that the public should know that the appellant was

the owner of the business. It is enough that he has obtained a

reputation under the name he uses and has conducted his

business accordingly. It is possible that many people who knew

of the appellant's business would conclude, but wrongly, that

the appellant's business was a branch of that carried on by the

respondent whilst others might conclude, and rightly, that the

respondent's goods were handled in the appellant's shop. But

there may have been and probably were a good many people who

knew nothing of the respondent's business and to whom the

appellant's shop was the only 'J.H. Coles Stores' or 'Coles 3d.,

6d. and 1/- Stores' they knew, or were in the habit of dealing

with under those names. It is, I think, beyond question that

the respondent did allow the appellant to use its trade names

and to acquire some local reputation under those names. The

question, however, still remains, what is, on proper inferences

from the evidence, the arrangement between the parties for the

use by the appellant of the respondent's trade names."

61. He considered the answer to be that there was only a revocable licence, and that the respondent did not "ever appear to have abandoned" its trade names. Dixon J (at 46 CLR 484-485) elaborated the point as follows:

"The opening of the shop at Northcote was calculated to do two

things - to create a local business having a goodwill of its

own with which the trade names were connected and to enlarge

the meaning of the trade names and widen the reputation

attaching to them. But there can be no doubt that the appellant

was and remains the proprietor of the actual business carried

on at the shop at Northcote, and therefore of the goodwill

which belongs to it. If the trade names had come to be a

description of that business or of its proprietor and nothing

more, it is manifest that, whether the parties intended such a

consequence or not, the names would no longer form part of the

business reputation of the Company and it would have nothing to

protect by an injunction restraining their use. But while in

the neighbourhood of the appellant's shop the names may in many

minds, perhaps, almost exclusively be associated with the

business there carried on, yet, in the vicinity of each of the

Company's own six shops, there will be many to whom the names

serve to identify that shop, and among the wider public whose

information does not depend upon observation confined to one

locality, a class which probably includes the greater number of

the appellant's customers, the trade descriptions adopted by

the Company signify a system of stores organized or conducted

under one ownership or control. Independently, therefore, of

the Business Names Act 1928, the Company possesses a trade

reputation to which its trade names attach, and prima facie it

is entitled to the protection of an injunction restraining any

unauthorized use of the names."

62. In this passage, by the use of the phrase "and nothing more", Dixon J, it seems to me, indicates that the business reputation of the company would not necessarily be lost by the attraction of custom to another business under the same name unless its own reputation were to be totally destroyed. He plainly contemplated the possibility of a segmentation of the public so that, for one segment, the name meant one business, and for another the other business. The point is made even clearer if the majority judgments in the High Court are looked at, which indicate from what view Starke and Dixon JJ were dissenting. Rich J (with whom McTiernan J agreed) said (at 475):

"If a trader in a particular business licenses another to use a

trade name of the trader to denote a business of the same kind

carried on by the other, it is difficult to escape from the

conclusion that either the original trader is countenancing and

encouraging a deceptive use of the name or else the name

thenceforth denotes a particular class of business, and not the

business of a particular trader."

"How can the Company say that, in January 1931, after doing

business and allowing Need to do business in this way for

nearly three years, the trade name and style used at Need's

Northcote business were distinctive of its business?"

64. When the matter went on appeal to a strong Privy Council, the views of Starke and Dixon JJ prevailed. Lord Wright summarized (at 49 CLR 502) the opposite opinion as resting on a main ground "that the use of the trade names by the respondent under the licence had the effect of rendering these names no longer distinctive of the appellant's business". His Lordship noted (at 503) that Starke and Dixon JJ had concluded "the appellant's trade names had not lost their distinctive character".

65. I was referred by counsel for the respondent to In re Wood's Trade-mark. Wood v. Lambert and Butler (1886) 32 Ch D 247. It was suggested this decision required the applicant's case to fail because it had represented the "Kettle" name and the cauldron device as relating to goods of Hawker and Frito-Lay. But the authority cited cannot stand against Need v. J.H. Coles; it must apply only in a situation which goes beyond that. The facts did go beyond that; Messrs Wood were held to have represented that their own British manufactured cigarettes, sold under the mark "Eton", had been made, in some cases, in St. Petersburg, and in others in Constantinople, by a different (and fictitious) manufacturer. See, per Fry LJ, at 263. In those circumstances, the factual conclusion was reached that the mark could not be distinctive of the manufactures of Messrs Wood. By contrast, here there was never a representation directly inconsistent with the connection in trade between the applicant and the potato chips manufactured by it - Hawker and Frito-Lay were never represented as the manufacturers. Nor, on my findings, was the distinctiveness of "Kettle" or the cauldron device in fact destroyed for a significant section of the relevant public. Of course, the point does not apply at all to the first basis on which I have held the applicant entitled to succeed - that the entire get-up of its packet has been wrongfully taken by the respondent.

66. The view that a name may be in a sufficient sense distinctive of a business, although some other business is also entitled to use it, is consistent with the old cases Dent v. Turpin (1861) 2 J and H 139 [1857] EngR 912; (70 ER 1,003); Southorn v. Reynolds (1865) 12 LTNS 75 and Hine v. Lart (supra). The first two of these were expressly approved by Lord Diplock in Erven Warnink B.V. v. J. Townend and Sons (Hull) Ltd (1979) AC 731 at 742. He referred to them as cases

"in which one of two traders, each of whom had by inheritance

acquired goodwill in the use of a particular trade name, was

held entitled, without joining the other, to obtain an

injunction restraining a third trader from making use of the

name, despite the fact that the plaintiff's right of user was

not exclusive. The goodwill of his business would be damaged by

the misrepresentation that the defendant's goods were the goods

of a limited class of traders entitled to make use of it, of

whom the plaintiff was one and the defendant was not."

67. In Dent v. Turpin Sir W. Page Wood V.-C. said (at 144):

"If ... the Plaintiff and another have the right to use a

distinct trade mark, and ... the defendants have fraudulently

used this mark without the consent of either of the persons

entitled, I must hold that each of the persons entitled to the

mark has a right of action for the fraud ... ."

68. In view of Lord Diplock's acceptance of Dent v. Turpin and Southorn v. Reynolds, there is no reason to think that the statement of Goff LJ in Erven Warnink B.V. v. J. Townend and Sons (Hull) Limited (1978) 4 FSR 473 at 493 lacks authority, simply because the decision of the Court of Appeal was reversed. Goff LJ referred, as a basis on which passing off might be shown, to the proposition that "Advocaat" had

"become the recognised description of a limited class of (drink

which is egg and spirit based) segregated in the minds of the

public from other drinks of a similar kind, so that a

sufficiently exclusive right to use that name in connection

with their products has become part of the goodwill of a class

of proprietors of whom the plaintiff is one".

69. He then added: "I say 'sufficiently exclusive' since it is clear that quite apart from the decision in the Spanish Champagne case, Bollinger v. Costa Brava Wine Co. Ltd. ((1960) RPC 16; (1961) RPC 116), a passing off action can be based upon a shared reputation."

70. On the basis that the exceptions to the rule requiring an applicant to have an exclusive right to the goodwill attached to some particular name, mark or get-up to be protected by an action for passing off, will be limited (Erven Warnink (supra), at 752 per Lord Fraser of Tullybelton), it does not follow that an applicant who has obtained an exclusive right to make and vend articles under a particular name, mark or get-up will have lost that right because he has licensed another trader to market some of the articles made by him under circumstances which have led a limited section only of the public to conclude that the other trader was entitled to use the name, mark or get-up. That was exactly the situation in Need v. J.H. Coles Proprietary Limited.

71. Of course, if I am right in finding that the word "kettle", as applied to potato chips, whether or not it is a brand, refers to potato chips of the description of those made by the applicant, including as part of their description that they are hand cooked as the applicant's potato chips are, the decision in Erven Warnink, and other cases like it such as the recent New Zealand case Comit Interprofessionnel du Vin de Champagne v. Wineworths Group Ltd (1991) 2 NZLR 432, would entitle the applicant to succeed even if it has lost the exclusive right to use its name and symbol. For in that case the name and symbol would belong to the limited group of traders in potato chips of the relevant kind which are hand cooked. The respondent's potato chips are not hand cooked, and it is no answer for it to say that the words "KETTLE STYLE" on its packet differentiate its product so as to avoid passing off. Those words are very far from prominent, or indeed clear. In fact the documents, to some of which I have referred, are revealing of the reason for the lack of prominence or clarity: the respondent's true intention was to suggest something in the nature of hand cooking, the "cottagey" feeling with which it understood the public mind had endowed the applicant's product, being hand cooked on a relatively small scale, and to divert the consumer from the truth that, in its own case, mass production was involved. In this situation, the very imperfect explanation cannot avail anything, and the words of Lord Macnaghten in Montgomery v. Thompson (1891) 8 RPC 361 at 368 are applicable a fortiori:

"It is obvious, I think, that if the injunction had been in

that form (that is, requiring the appellant to distinguish his

ales from those of the plaintiffs), the Appellant could not

have used the term 'Stone Ales' at all. It would have been

impossible for him to have distinguished his ales from those of

the Plaintiffs. Any attempt to distinguish the two, even if it

were honestly meant, would have been perfectly idle. Thirsty

folk want beer, not explanations. If they get the thing they

want or something like it, and get it under the old name - the

name with which they are familiar - they are likely to be

supremely indifferent to the character and conduct of the

brewer and the equitable rights of rival traders."

72. Some further arguments put for the respondent may be dealt with shortly. It was suggested the respondent had actually benefited the applicant by increasing, through its extensive advertising, the size of the entire market for "Kettle" potato chips. This is a fascinating proposition, but it ignores long term effects, and I reject it. In any case, the evidence shows the applicant had achieved extremely rapid growth without the applicant's advertising, and there is no reason to think that would not have continued, and even accelerated. Therefore I do not accept the respondent's interpretation of the figures. The applicant does not complain of the respondent's entry into the relevant market, but of its conduct having entered; had it entered differently, the alleged growth of the market might still have occurred, but without damage to the applicant. Apart from damages, the applicant is entitled to elect to seek an account of profits, and on an accounting, this argument of the respondent would be doomed to fail, just as very similar ones failed in Duplate Corp v. Triplex Safety Glass Co. [1936] USSC 93; 298 US 448 (1936) and Decor Corporation Pty Ltd v. Dart Industries Inc. [1991] FCA 655; (1991) 33 FCR 397 at 407-408. The view of the law expressed in the latter decision was accepted by the High Court in Dart Industries Inc v. Decor Corporation Pty Ltd [1993] HCA 54; (1993) 116 ALR 385 at 395.

73. On the factual question raised by this argument, whether the applicant had suffered loss, the respondent relied on a press release by an executive of the applicant as an admission that no loss had occurred. But a company fighting for its market share might be expected to put a brave public face on the effects of a formidable foray against it by a competitor. I think I should give more weight to the evidence adduced in court than to a statement to the press.

74. For all these reasons, I hold that the applicant is entitled to the relief sought. I have not discussed ss. 52 and 53 of the Trade Practices Act separately. As Davies J reminded us in B. R. Gamer (Investments) Pty Ltd v. Gamer (1993) ATPR 40,806 at 40,810, "s. 52 does not replicate the tort of passing off"; but in this case, although I do not think s. 53 has separate application, the same considerations which have led me to a finding of passing off lead to a similar result under s. 52 of the Trade Practices Act. Indeed, it could be said they do so even more ineluctably. For the Trade Practices Act has other and wider concerns than goodwill, and if a significant section of the public was misled by the respondent's conduct, arguments about the possible effect of the applicant's own actions upon its goodwill cannot provide an answer; the applicant's actions would have to have gone so far as to remove the foundation for a finding that persons were misled, for it to be deprived of its cause of action: cf. Hornsby Building Information Centre Proprietary Limited v. Sydney Building Information Centre Limited [1978] HCA 11; (1978) 140 CLR 216 at 220, 227; Taco Company of Australia Inc. v. Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177 at 197, per Deane and Fitzgerald JJ; Bridge Stockbrokers (supra) at 473-474; Parkdale Custom Built Furniture Proprietary Limited v. Puxu Proprietary Limited [1982] HCA 44; (1982) 149 CLR 191 at 205. At all events, once confusion is caused by a respondent, it is a short step, though a necessary one, to the establishment of a contravention of s. 52 by misleading or deceptive conduct: Shoshana Pty Ltd v. 10th Cantanae Pty Ltd (supra) at 292.

75. I direct the applicant to bring in, at an appropriate time, short minutes of orders in accordance with the findings of the Court.