Virgin Enterprises Limited v Virgin Home Loans Pty Limited

REASONS FOR JUDGMENT 1 I have before me an application for interlocutory injunction, the substance of which seeks to restrain the respondents from carrying on business pending the hearing of these proceedings under various names which include the word Virgin ("Virgin") or any colourable imitation thereof. The practicalities of the situation are such that I have to give a judgment immediately because, unless restrained, the respondents propose to place an advertisement in the next edition of the Yellow Pages which closes tomorrow. 2 The first applicant is a holding company for a large number of companies which constitute the Virgin Group. They are a conglomerate which carries on a wide range of businesses. Historically those businesses have been launched initially in the United Kingdom, but once established, many have expanded to overseas markets and a number are now operated globally. The Virgin Group has created over 200 companies worldwide employing over 25,000 people and the group's total revenues in 1999 exceeded 3 billion pounds. 3 The first applicant is the proprietor of the trademark "Virgin", trade mark number 679394 registered in respect of certain services under Class 36. It is also the proprietor of a stylised mark, Virgin, in respect of services under that class. The second and third applicants are members of the Virgin Group which have entered into joint venture arrangements with the AMP for the provision of financial services of various types. Since 1995, the Virgin Group has offered a range of retail financial services in the United Kingdom under the Virgin trademarks, principally through those applicants. 4 The products and services offered by these companies include retail finance services, investment services, banking facilities, home mortgages, life and serious illness insurance, personal equity plans, personal pensions and index trading funds. Those joint ventures had at the time of publication of the latest accounts over 3 billion pounds under management with over 200,000 investors and in excess of 1 billion pounds on loan. The activities of the second applicant are described as Virgin Direct. 5 The business of the third applicant is conducted in association with the Royal Bank of Scotland and provides financial services which have a more "banking-based" focus. To some extent in relation to all of the Virgin companies, but particularly in relation to the business of the third applicant, the business is what is called e-enabled. Money can be borrowed over the Internet through the website . 6 The respondent companies are all promoted and controlled by the fourth respondent. The first respondent was incorporated on 19 April 2000, the second respondent was incorporated on 29 March 2000. The third respondent has since 4 September 1996, provided finance for all sections of the financial market. The fourth respondent holds various business names and they include Virgin Finance, which was registered on 30 March 2000 in respect of the business of finance consulting; evirgin, which was registered on 3 April 2000 in respect of the same business or in respect of the same class of business and Virgin Home Loans which was registered on 23 June 2000 in respect of a class of business styled finance. The second respondent holds the business name, Virgin Mortgage Corporation which was registered on 30 March 2000 and it appears that that business name was formally recorded in the name of the third respondent. Comparatively recently a website appeared at the url address, which is shown as being under construction. 7 The applicants bring their case on three causes of action. Firstly, infringement of trademark; secondly, contravention of s 52 of the Trade Practices Act 1974 (Cth); and thirdly, passing off. Of course the issue with which I am concerned is not whether the applicants will ultimately succeed on any of those causes of action, but whether there is in the relevant sense a prima facie case or a serious question to be tried, and if there is where the balance of convenience lies. 8 So far as the trade mark infringement claim is concerned, the relief which is sought on an interlocutory basis is not specifically directed to trade mark infringement. Nor am I satisfied that there is a sufficiently strong prima facie case to justify interlocutory relief on that basis. I am not persuaded that there is a sufficiently arguable case that the respondents' services, which can perhaps be described as home loan services, are of the same description as services in respect of which the mark is registered. I can therefore leave aside trademark infringement as the source of an entitlement to interlocutory relief. 9 For present purposes it is not necessary to distinguish between s 52 of the Trade Practices Act 1974 (Cth) and general law principles as to passing off. If the applicants could not sustain a claim based upon s 52, I cannot conceive any different result applying by the application of the general law of passing off. 10 In my view, the evidence establishes on a prima facie basis that the applicants have acquired a reputation in Australia under and by reference to the name "Virgin", such that one would conclude that a significant number of people in this jurisdiction are aware of the applicant's reputation, and when they come across the name Virgin, they would draw a connection with the applicants or companies in the Virgin Group as the provider of the goods or services in relation to which the name is used. 11 That reputation has arisen in a variety of ways. Firstly, through information supplied by the AMP to its policy holders and, more lately, to its shareholders and to investment analysts, brokers and persons operating in the finance industry. Secondly, and significantly, through websites conducted by the AMP and by the Virgin Group of Companies. Thirdly, through articles in the financial and general press which have given extensive publicity to the Virgin Group of companies, their founder Sir Richard Branson, and to the movement of those companies from the United Kingdom to other parts of the world including Australia. One article which appeared in the Sydney Morning Herald on 29 November 1999, and I use this simply by way of illustration, states: "The Virgin Group has near 200 companies. They sell plane tickets, cola, vodka, wedding frocks, music and pensions. They own cinemas, megastores, helicopters, model agencies, hotels, train lines and radio stations. His [that is to say, Sir Richard Branson's] personal wealth is estimated to be around $US3 billion ($4.72 billion) odd for somebody who claimed to have become a 'capitalist by accident'." 12 Finally, over a comparatively long period of time, goods and services of various types had been sold and promoted in this country by the brand name Virgin. Consequently, it seems to me that the applicants have established a prima facie case that consumers are likely to be misled if the respondents were to carry on business in the sector of financial services under or by reference to the name Virgin. 13 It is true that Virgin is an ordinary English word. It is true that in its ordinary English signification it describes a person who has not experienced something. But it is also capable of acquiring a secondary meaning, one which indicates an association with the Virgin Group of companies; it seems to me that a prima facie case to that effect has been established. 14 Mr Evatt referred to a large number of companies which have been registered in Australia under names which have included the word Virgin and to a much smaller number of companies which appear in the telephone book under names which include the word Virgin. Beyond the fact of those entries, I know nothing about these companies in terms of what they do, how they do it or what their reputation is. It may well be that this is an issue which would have to be investigated at the trial. However, at this point, it does not mean that the applicants have not established a serious question to be tried. 15 That takes one to the balance of convenience. The following considerations are relevant. Firstly, the evidence establishes that the business name Virgin is a valuable asset and is considered, by the applicants, to be a valuable business asset. Particularly in the financial service market it is an asset which is capable of being eroded if the level and professionalism of the service provided under the name is less than that offered by the applicants. Mr Gorman, in his affidavit, deposes to the possibility of irreparable harm should companies carry on business by reference to the name Virgin without offering the same level of service and trading as that offered by Virgin Direct, VirginMoney and AMP. 16 Next, the respondents have only recently begun to carry on business under the name Virgin. As the chronology to which I earlier referred indicates, the various registrations are of recent origin and the only evidence before me as to the conduct of business activity under the name Virgin is of advertisements placed in the Sydney Morning Herald on 1 and 8 July 2000 and of the unconstructed website. When proceedings were threatened, the advertisements of 8 July 2000 were able to be partially withdrawn from publication and there was substituted for them an advertisement by Sydney Home Loans, otherwise in the same form as the advertisement intended to be published with respect to Virgin or evirgin. The website is currently under construction and it consists of an inactive home page. 17 Sydney Home Loans is the name under which the fourth respondent has traditionally carried on business. It is only recently that the respondents have commenced to trade under the name Virgin and even then only to a very limited extent. Those facts indicate that the balance of convenience lies overwhelmingly in favour of the granting of relief. 18 I should advert to the fact that the advertisement placed on 1 July contained a notation to the following effect: "evirgin is not sponsored or affiliated with Virgin Enterprises Ltd and Virgin Group of companies." 19 The significance of that qualification has been subject of debate. In one sense it might amount to admission of a reputation in the applicant companies; in another sense it may simply be a rational and sensible reaction to receipt of the letter of demand and not otherwise of significance. I have not based my decision on any particular assessment of the significance of the qualification. 20 I therefore propose, subject to the applicants by their counsel giving the usual undertaking to damages, to make orders in terms of the Short Minutes of Order which have been handed up, unless Mr Connell has anything to say about the form of those words. 21 I note the applicant counsel's undertaking as to damages and make the following orders: