a oRPO SAL COM OP ALE IR ALTA WW. SOUTH. ILLES... DISTRICT PYGISTRY « No. G6 .45,.. of SOTT Ne eee GENGRAL.. oe. .ee.. DIVISTON BErEET HANS DIDTER WEITMANN ° CR OKS ORE EERE SO HERE Eo O Beer a ee eens By eovecsecstescees CAppLicant,). .. CeCe wer eee ee nee ees es oreroseeeser AND : 2. KARIES. LED. end, Qthers.. Sec ooend eraser sonar ecanrercennnare ORDER ' JUDGE(&) MAKING ORDER : Franki J. . DATE OF OXDER : 1 November 1977 WHERE MADE : Sydney THE COURT OZDERS PHAT: : 1. 'Application dismissed 2. - Appli cant Eo pay the Respondents! costs, including feserved tosis Such Costs to be taxed if not agreed. ware Date Entered: . a a CATCHWORDS Trade Practices Act 1974-1977 ~— Application for injunction ~ section 52(1) - meaning of "mislead or deceive" — section 53(c) ~ meaning of "sponsorship" - use of "Saint Germain" as a trade mark — applicability of passing off pranciples. Hans Dieter Weitmann v. Katies Ltd. and others G No. 45 of 77 Before Franki Jd. Sydney 1 November 1977. IN THE PEDERAL COURT OF AUSTRALIA GENERAL DIVISION NEW SOUTH WALES DISTRICT REGISTRY REASONS FOR JUDGHENT DELIVERED Between And G No. 45 of 1977 HAWS DIETER WEITMANN Applicant KATIES LTD. AND OTHERS Respondents FRANKI J. 1 November 1977 fhe applicant, Mr. Hans Dieter Veitmann, seeks an dngunvc.re against Katies Limited and three other companies in wnat might broadly be called the Katies Group (ell of which I will refer to az tthe respondent?). The proccedings are under s.80 of the Trade Practices Act 1974-1977 and are based upon ss.52 and 53(c) of that Act. Stripped of refinements the basic facts are that the applicen, has adopted as its trade mark the words "Saint Germain". The applicant has sovght registration as trade marks for women's outer | wear clothing of the words "St. Germain" together with the letters "S.G." an a particular form and also the words "Saint Germain" together with the same letters in the same particular form. The applicant is a clothing designer and wholesaler. The clothing which he sells wholesale is made abroad to his specificai-. and design by foreign clothing manufacturers. Particularly : relevant to this case are shirts, including women's T~shirts, which are manufactured for him in Hong Kong and which he imports for sale' substantially through what are known as boutiques, particularly in the middle and top level. The respondent has imported several thousand T-shirts into Australia with the name "Saint Germain" embroidered near the top of the left sleeve in letters about one centimetre in height. , No sales have yet been made by the respondent of any of thes shirts but it interids to sell them with a small label affixed to the inside of the neck tearing the name "Scharade for Katies" and also bearing a swing label tied to this neck label also bearing the name "Katies" in letters of about 4 centimetres in height. ) It is alleged by the applicant that a sale by the respondent: of these shirts would be in contravention of s.52(1), an that it would be coriduct "...that is misleading or deceptive or is likely to mislead or deceive" and also that it would be in contravention of s.53(c) in that it would be a representation that the goods had a sponsorship which they did not have. 2. - {t as to be noted that the relief sought is in the neture os. a quia tamet inygvaction, in that at the date of the hearing no conduct, such as vas alleged would fall within s.52(1) and s.53(c),: had taken place. Section 80(5) makes it clear that a final injunction may be granted, thether or not the conduct prohibited has: been previously engaged in, if in the absence of an injunction it appears to the Court that the respondent will+engage in conduct whic would constitute a contravention of s.52(1) or s.53(c). This is 50. whether or not there is ",...an imminent danger of substantial damage to any person..." if the respondent engages in the conduct sought to be prohibited. I will consider first of all the questions which arise vnuecr, c s.52 which provides:-— (1) A corporation shall not, 1n trade or commerce, engage L in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of sub~section (1). Engaging in conduct is defined 1n s.4(2). That section provides that a reference to conduct, yhen that expression 1s used as a noun, shall bé read as a reference to the doing of "...any act..." The respondents are corporations and are engaged in trade or commerce so the question to be decided is whether it would be likely to mislead or deceive within the meaning of s.52 if the respondent exhibited a shirt for sale, or sold such a shirt in one of its retail stores, where that shirt bore the name "Saint Germain on the sleeve and a label affixed to the inside of the neck which bore the words "Scharade for Katies" and the swing label bearing thi, name "Katies", : Whilst one should not be too ready to apply to a case such as this, which appears at first glance to be in the nature of a 3. passing off action, the Jaw relevant to such an action, I hav come to the conclusion that 1n a general sense much of that luw is particularly relevant with regard to ee lermining vhether cercein conduct 1s misleading or deceptive or likely to mislead or deceive. The House of Lords in Reddavay v. Banhem, 1896 A.C. 199, held that a trader was not entitled to pass off his goods as the goods of another trader by selling them under-+a name which is lisbic to deceive purchasers (whether immediate or ultimate) into B J believing that they are buying the goods of that other trader althoi in its primary meaning, the name was merely a true description of the goods. Lord Halsbury at p.204 said:- "For myself, I believe that the principle of Law may be very plainly stated, and that is, that nobody has any right to represent his goods as the goods of somebody else." Lord Iierschell at p.210 said:- "The name of a person, or words forming part of a common stock of language, may become so far associated with the goods of a particular maker that it is capabie of proof that the use of them by themselves without explanation or qualification by another manufacturer would deceive a purchaser into the belief that he was getting the goods of 'A* when he was really getting the goods of 'B'. In a case of this description the mere proof by the plaintiff that the defendant was using a name, word, or device which he had adopted to distinguish his goods would not entitle him to any relief. He could only obtain it by proving further that the defendant was using it under such circumstances or 1n such manner as ; to put off his goods as the goods of the plaintiff. If he could succeed in proving this I think he would, on < Tt ekantlintand reiroinies he entitled ta an injunction," 4, This passage was cited in the gudagment of the Haigh Cow wv in Collitt v. Borsalino Guiseppe E Fratello Societa Anonivea (1972) 1 16 C.L.R. 344 at pp. 350-451 where the Court said that the principles of lav applicable to the case then before it vere those + in the above passage from the judgment of Lord Herschell which the Court described as "the often cited passage." Whether conduct is deceptive in the subject case must be examined in the light of what the alleged deceptive words mean to ; the relevant purchaser when used on the sleeve of the ladies T-shirts as they are to be sold. This involves two questions, first, whe is to be considered as the relevant purchaser and cecors, what will the words mean to that purchaser? This seems to lead to | two of the questions which arise in a passing off action, first, what is the appropriate class of purchasers to be considered and secondly, have the words "Saint Germain" acquired what is commonly called a secondary meaning, namely do they indicate to the aporopriate class of purchasers that the goods have come from a particular source, whether the name of that source is known or not? Whilst I do not wish to say more than is necessary to decide: this case it seems likely that the question whether the applicant has any business or goodwill to protect, or will suffer any damage by the conduct sought to be protabited, are not,at least in the absence of some peculiar circumstances, matters of significance, | under s.52. Coming now to the facts of the case, the evidence shows tle the words "Saint Germain" are apt to describe an area in Paris on the Left Bank which is known as a centre of the fashion world and where a great number of fashionable boutiques selling ladies clothing are situated. The applicant called witnesses and gave evidence himself. Of the witnesses, one was the editor of the magazine 'Mede', one the editor of the magazine the 'Ragtreder', three were retailers, and two were best described as purchasers, one being a solicitor %y The respondent called eleven vituesses of whom seven were and the olher a receptionist, and both being from Sydney. broadly from the trade and four, including a solicitor, were callcy; as being from the purchasing public. Of the two purchasers called by the applicant both had first'. known of Saint Germain as a fashionable part of Paris and later hee'. purchased a garment coming from the applicant bearing the name ' "Sait Germain." One purchaser said that if she saw "Saint Germaai.." on a T-shirt she would probably enquire as to who manufactured it and the other said of the name ",....first and foremost in my mince it represents a manufacturer of clothes, Saint Germain",and her evidence indicated that she would have thought it was a "Saant Germain" shirt and it appears she would have been likely to have been misled or deceived. Three of the four witnesses from the class of prospective purchasers called by the respondent had never ' ' heard of Saint Germain in relation to articles of clothing, the ' other one had purchased a garment bearing that name in Sydney, and '~ also knew of Saint Germain as a place name, but I consider the if i she had been faced in a Katies store with the garment the : respondent proposes to sell she would not have been misled or deceived. °. No customers or prospective customers were called from outside Sydney. The trade witnesses by and large knew of "Saint Germain" as a place name and several of them had never heard of the applicant ' or of garments sold wholesale by him marked "Saint Germain". There is evidence from several of the applicant's trade witnesses that they mnaght be likely to be deceived if they saw a shirt with "Saint Germain" marked on the sleeve on display at a Katies store as is proposed, but I consider that they are persons o a particular class. 6. "- I do not consider that these trade witnesses are lukel, to purchase one of the relevant shirts from 5 Katies Store. It jae the class of persons who are such prospective puchasers thal ss the class to be considered in this case, almost tc the exclusion of all others. There is some evidence that some customers of three retailers asked for garments as "Saint Germain" garments, / Both the President of the Fashion Industry Association and the President of the Apparel Importers Association said in evidence that they would not think a shirt displayed for sale as proposed in: a Katies store, and marked as proposed, would have any association , with the applicant. There was a considerable amount of evidence relied on by the | respondent, directed to establish that the business of the applican lay through boutiques and that the class of customer likely to purchase the relevant shirts from Katies, was a class of customer who did not purchase clothing requirements from boutiques. I accept this as being of some importance in considering whether prospective purchasers, who may attach a secondary meaning to the words "Saint Germain", would be likely to be deceived or misled. , The applicant first adopted the name "Saint Germain Fashions! in January 1976 and.has since carried on business under that name. He has used the trade mark "St. Germain" since 1974. The applicant has spent some ten thousand dollars advertising goods under the name "St. Germain" or "Saint Germain" and this included expenditure on stationery, business cards, invoices, give-away plastic bags and swing tickets. In this judgment I will not draw any distinction between "St. Germain" and "Saint Germain" as I do not consider any difference to be of Significance. Prior to commencement of this action on 1 July 1977, the applicant had received publicity by virtue of advertisements in 7. the Sydney "Daily liirroc" on 1 July 1976; the Sydaey "Sun" on F paper) on 29 June 1977; and the Sydney "Daily Telegraph" on 30 Jund 19 January 1977, the "Veekly Courier" (apparently a suburban 1977. In addition relevant material by vay of advertisement or otherwise had also appeared in the "Ragtrader" of 1-15 July 1976, 15-30 November 1976, December 1976, and approximately ,June 1977; in "Yogue Australia" of May 1977 and ,approximately ,June 1977; and "Mode" Magazine of June 1977. Two of these advertisements are for a shop called 'Bernicec! at Bondi Junction and the applicant's name is mentioned as one of | eleven "Top Fashion labels." The advertisement in the Sydney "Sant is by David Jones and features the name "St. Germain" prominently. The advertisement in the "Daily Ifirror" is perhaps more of a feature article and the name "Saint Germain" appears only once in small letters. The "Ragtrader" is only directed to the trade. t The advertisements in "Vogue" only show the name "Saint Germain" in a way which is not prominent. "Mode" is an Australian fashion magazine directed to shopper in boutiques and about 20,000 to 25,000 copies of the Winter 1977 issue were sold in Australia mainly to the public through newsagent, and nevs stands. This assue of "Mode" contained a full page advertisement and also a short note listing a number of stores, about thirty-five in number, where apparently Saint Germain article: could be purchased. Apart from the fact that only "Vogue" and "Mods would reach the public outside New South Wales, the press publicity ian evidence is so small as to be almost insignificant. There was some evidence of shop window displays featuring the name "St. Germain" or "Saint Gezmain" at Bondi Junction, Rose Bay and Moree but apparently no T-shirts were featured. There is also evidence of several fashion parades in Sydney, either directed to consumers or to the trade, where the applacantic 8. garments were promoted under the name "Saint Germain." Some evidence was directed to establish that the design of the applicant's shirts was distinctive but although the evidence established that the applicant's shirts were of attractive design and good quality no distinctiveness in the design in any relevant sense was established. 1 Between July 1976 and July 1977 approximately 8000 T-shirts bearing the name "Saint Germain" had been sold by the applicent to ' retailers who charged approximately '}14 per garment. During the same period between 70,000 and 90,000 garments were sold by the applicant, each bearing the uname "Saint Germain" on a label attache to the garment, and the applicant's garments so labelled have bec. sold to the public through about 350-400 retail outlets in Australia. There was no detailed evidence about the retailers apart from those who were called. About 40% of the sales was in New South Wales, about 20% in Victoria, about 20% in Western Australia, the balance in Queensland, the Australian Capital Territory, South Australia, the Northern Territory, with virtually no sales in Tasmania. Since Saint Germain is applied to an area in Paris, to some extent it falls within the category of geographical words. The origin of the words, Saint Germain in my opinion makes it rather difficult for these words to acquire a secondary meaning. Another feature is that the proposed use of the vords is on the sleeve of T-shirts. It was established in evidence, that particularly in recent years, there has been a practice whach commenced overseas, and which has extended to Australia, of putting place names on the sleeves or pockets of woments shirts. I consider that, in general, a relevant purchaser, even with some knowledge of the words "Saint Germain" as applied to a woman's shirt by the applicant, would not be likely to conclude, without further examination, that a shirt which bore that name had emanate: from the enplicent. The most appropriate meaning for the word "deceive" in the Oxford Dictionary 1s: "To cause to believe whet is false; to mislead as to a matter of fact, to lead into error, to impose upcen, Gelude, tale in," The most appropriate definition in thet dictionary for the word "mislead" is: "To lead astray iu action tr conduct; to lead into error: to cause to err." I am of the opinion that one should consider the relevant customers as those likely to be buying shirts from a Katies retail store. The evidence shows that such a person is likely to be a fairly typical member of the community who is not seeking to purchase a particularly high fashion article, but seeking what might be described as good value for money. In my opinion, the applicant has not shown that the words "Saint Germain", appearing on the sleeve of ladics shirts sold as proposed in a Katies store. is likely to deceive such customers. The relevant conduct vith which I am concerned is that of selling such shirts, as proposed, in a Katies store. I am not required to consider what would be the position if an actval case of deception had been shown, but, whatever may be the position in that case, I am satisfied so far as a quia timet application is concerned, that I must consider whether a reasonably significant number of potential purchesers would be likely to be misled or deceived just in the same way as this question should be considered in a passing off action. It was not suggested that the use of the word "Saint Germain" on the sleeve of a lady's shirt was deceptive in the sense thal 1t might mislead purchasers into believing that the goods had an origin in Paris. I have considered whether any help can be got from an of the Courts examination of the approach/in the United States of America to LO. anterpret:tion of the/ the words ,"Unraare mechods of competition iu cownerce, aad urfair o2 deceptive acts or practices in commerce, are declzred unlawful" .fhese appear in s.5 of the Federal Trade Commission Act, as amended sn 1938 by the Whecler-Lea Amendment. It seems that proceedings based on this section can only be enforced by the Federal Trade Commission and that, in general, in looking at whether an act 1s untair or deceptive in relation to a trade mark or trade name principles very similar to those adopted in determining passing off cases in Australia have been applied (see generslly, United States Code Annotated Title 15, paragraph 4s notes 80~82, and Corpus Juris Secundum Vol. 87 pages 6435-649.) I am not satisfied that the applicant has made out any case } under s.52. I pass now to the claim under s.53(c). I heve to consider whether the respondent, if it sold T-shirts, with Saint Germain on the sleeve and in one of its retail stores, would in connection with the supply of goods, represent that those goods had a sponsorship which they did not have. I consider that the mere ; placing of an article on display for sale in a shop, is, 1n general: sufficient to make any relevant words thereon, which are clearly visible, a representation by the trader without any specific attention being dirécted to the words, or without any statement by the trader (see Given v. C.V. Holland (Holdings) Pty. Lamited delivered in this Court on 23 June 1977). The next question is whether the words as they would be displayed on ladies shirts would represent any sponsorship. In my opinion the words would have to acquire an appropriate secondary meaning before 1t could be said that they represented a sponsorship of the goous, but even if such a secondary meaning had been established in this case I doubt whether the word "sponsorship" covers the activities of a wholesaler, whose only act of "sponsorship" 1s the acquisition of goods from a manufacturer Li. and the selling of them to a retailer with his trade mark tire sn. I note that the Oxford Dictionary @oes not. define "pponsorslio" in any way which is appropriate to include the function of an ordinary wholeseler of goods, or indecd, of a manufacturer who applies his ' trade mark to his goods. The most relevant definition therein of "sponsor" seems to be: "One who enters into an engagement, makes a formal promise or pledge on behalf of anothe?: surety." The word "sponsorship" in connection with trade marks or trade nawes seems to envisage something more along the lines of a certification mark. It is appropriate to say that I accept the evidence of Mr. Moss, a director of Katies Limited, that when the shirts bearing the name "Saant Germain" were ordered by the respondent ee cee it was unaware of the use of that name by the applicant. I add that, if I had thought some relief was appropriate, I only wovld have granted a qualified injunction restraining the | relevant use of the word "Saint Germain" without clearly distinguishing the respondent's goods from the applicant's goods. (See generally Kerly's "Law of Trade Marks and Trade Names" 10 Edn. pp. 440-442). ' I dismiss the application and order that the applicant pay okey Uw Lads, Msowruee\ Corts Sa cf eels the respondent's costs to Be taxed if not agreed. | a dn tenant et T certify that this and the Ye. : preceding pages are a true copy of the - Reasons for Judgment herein of his Honour ° Mir. Justice Fomn< ' ' Associa Dated : Yu fz7 wm eam