CATCHWORDS Trade Practices consumer protection - misleading or deceptive conduct - change of name and proposed change of name under which products marketed by respondents - form of packaging used by respondents similar to that used by applicants - whether such name and form of packaging mislead or deceive or arelikely to mislead or deceive. Trade Practices Act, 1974 (Cth.), ss. 52, 80. BRADMILL INDUSTRIES LIMITED & ORS. v. B. & S. PRODUCTS PTY. LIMITED & ANOR LOCKHART J. 5 DECEMBER 1980 AT SYDNEY NO. G 36 OF 1980 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G36 of 1980 aed GENERAL DIVISION BRADMILL INDUSTRIES LIMITED AND ACTIL LIMITED AND BRADMILL TEXTILES PTY. LIMITED Applicants B. & S. PRODUCTS PTY. LIMITED AND B. & S, INDUSTRIES PTY. LIMITED Respondents ORDERS JUDGE MAKING ORDERS: LOCKHART J. WHERE MADE: AT SYDNEY DATE OF ORDERS: 5 DECEMBER 1980 THE COURT ORDERS THAT: 1. The respondents, by their servants and agents, be restrained until further order from engaging in trade or commerce in conduct that is misleading or deceptive or likely to mislead or deceive by selling, offering for sale, dealing with ,displaying or advertising any product 'being sheets, pillow cases, bedding, quilted covers, towels, curtains, drape fabrics, apparel fabrics, garments or other textile products under the name "Bartmill" or "BART-MILLS" or any similar name. ../2 2. Liberty be reserved to any party to apply in relation to any matter arising out of the making of these orders on seven (7) days' notice. 3. The respondents pay the applicants' costs of these proceedings including reserved costs. 4. Exhibits be handed out at the expiration of the period of twenty-one (21) days unless an appeal from the judgment of Lockhart J. is lodged 1n the meantime. IN_THE FEDERAL COURT OF AUSTRALIA } NEW SOUTH WALES DISTRICT REGISTRY "° G36 of 1980 GENERAL DIVISION BRADMILL INDUSTRIES LIMITED AND ACTIL LIMITED AND BRADMILL TEXTILES PTY. LIMITED Applicants B. & S. PRODUCTS PTY. LIMITED AND B. & S. INDUSTRIES PTY. LIMITED Respondents REASONS FOR JUDGMENT LOCKHART J. 5 DECEMBER 1980 I will not defer giving judgment as the parties should know now where they stand and I have reached a firm view as to the result. Bradmill Industries Limited ("Bradmill Industries"), Actil Limited ("Actil") and Bradmill Textiles Pty. Limited ("Bradmill Textiles") (together called "the applicants") produce and market in Australia a range of textile and cloth products including sheets, pillow cases and other bed coverings, under brand names that include "Bradmill". In October 1979 B. & S. Products Pty. Limited (" B. & S. Products") commenced to produce and sell bed coverings including sheets and pillow cases under the name 2/2 "Bartmill". Previously, its bed coverings were sold under other brand names, in particular, "Sabra" and "Corona". Following complaint by Bradmill Industries and Actil, B. & S. Products undertook to Bradmill Industries to cease using the name "Bartmill" on the packaging containing its products. B. & S. Products no longer sells goods under the name "Bartmill"; but B. & S. Industries Pty. Limited ("B. & S. Industries") proposes to sell bed coverings, including sheets and pillow cases, and certain other goods, under the name "BART-MILLS" unless restrained by this Court. The applicants claim that the conduct of B. & S. Products and B. & S. Industries ("the respondents") is misleading or deceptive or likely to mislead or deceive, as people would think that the goods sold as "Bartmill" or "BART-MILLS" were goods of the applicants, or one or more of them, or came from the same source as "Bradmill" products. The applicants seek declarations that the respondents have contravened ss. 52, 53 (c) and 53 (d) of the Trade Practices Act 1974 ("the Act") and injunctions. Bradmill Industries was originally known as Bradford Cotton Mills Limited, but changed its name on 27 February 1968. It was incorporated in New South Wales on 22 June 1927. It has carried on business since then of producing and selling 1n Australia textiles and cloth products including sheets, pillow cases and other bed coverings. 22/3 Bradmill Industries is registered as a foreign company in South Australia and Tasmania, and 1s a "recognised company"within the meaning of that expression under the companies! legislation of Victoria, Queensland and Western Australia. Actil was incorporated in South Australia and 1s registered as a foreign company in New South Wales, Victoria, Queensland, Tasmania and Western Australia. Bradmill Industries is the parent company of the Bradmill group of companies, which includes some nineteen subsidiaries. Bradmill Industries is and has been for many years the proprietor of various registered trade marks, including the mark "Bradmill" in respect of "cloths and stuffs of wool, worsted or hair, cotton piece goods of all kinds" included in class 24. Actil and other members of the group are registered users of the relevant marks. Actil trades under the business name of Bradmill Domestic Textiles, which is registered in New South Wales, Queensland, Tasmania, South Australia and Western Australia. It 1s in the process of being registered in Victoria. The Bradmill group of companies has some six factories and ten warehouses and showrooms in New South Wales, twelve factories and ten warehouses and showrooms in Victoria, four factories and six warehouses and showrooms in Queensland, four warehouses and showrooms in Western Australia, one factory and four warehouses and showrooms in South Australia, and one factory and one warehouse and showroom in Tasmania. . Sh A variety of trade names is used by various members of the Bradmill group for their products. The name "Bradmill" is used extensively with respect to variousproducts, including sheets, pillow cases and other bed coverings, and drape fabrics. Over the years 1974 to 1979, the sales value of "Bradmill" sheets, pillow cases and other bed coverings was as follows:- 1974 - $ 3, 857,000.00 1975 - $4, 376,000.00 1976 - $2,919,000.00 1977 - $4, 324,000.00 1978 - $4,936,000.00 1979 ~ $4 872,000.00 These figures do not include overseas sales. Over the same period the expenditure by Bradmiil Industries in advertising and promoting "Bradmill" sheets, pillow cases and other bed coverings, but not including overseas advertising and promotion, is as follows:- 1974 - $ 82,000.00 1975 - $ 116,200.00 1976 - $ 152,000.00 1977 - $ 133,200.00 1978 - $ 196,700.00 1979 - $ 150,600.00 Apart from "Bradmill" bed coverings, the sales value of other products under the name "Bradmill" and the moneys expended on advertising and promotion thereof are substantial. 2/5 -5- The applicants enjoy and for many years have enjoyed a strong and widespread market for their products, including sheets, pillow cases and other bed products. The name "Bradmill" is well-known in Australia. Bernard Bart arrived in Australia in 1949 aged 23. He carried on a textile business in Melbourne and moved to Sydney in 1960 where he still lives. The business in Sydney has been carried on by some six companies controlled by him. The business has expanded and flourished due to Mr. Bart's enterprise. The business activities carried on by Mr. Bart's companies, all under his management and control, include producing and selling sheets, pillow cases and other bed products, curtains, dress materials and materials for backing, pocketing and lining. The size of the business conducted by Mr. Bart's companies,which include the two respondents, is illustrated by the turnover of the group for the year ended 30 June 1980 - the figures are approximate: in sheets, pillow cases, and other bed products, the turnover was 2.5 million square metres and $3,700.000.00; the turnover of curtains was 80,000 to 90,000 square metres and $3,200,000.00; and in Gress materials, the turnover was 50,000 square metres and some $3,000,000.00. The companies employ 130 people and Mr. Bart estimates the value of current stock at about $1,500,000.00 and the replacement value of plant as between $5,000,000.00 and $6,000,000.00. Early in 1980 one of Mr. Bart's companies ..-/6 acquired a bath towel manufacturing plant and equipment for coating curtain materials; and it is proposed to engage in this business in the near future. Loom-state sheeting is the state in which sheeting arrives at the Arncliffe factories of Mr. Bart's companies from the textile mills. Upon reaching the Arncliffe factories, the sheeting is treated in various ways, including being unwound from its loom state and sewn together in 2000 metre lengths. The material is singed to remove fluff and other foreign matter, washed, then rolled and dyed to the desired colour in dyeing machines. It is put through a form of finishing process and proceeds to printing machines after which it is dried and cut to desired lengths. The products of Mr. Bart's companies have been sold under various trade names including: B. Bart Fabrics, for about the last three years; Continuous Curtains of Australia, for about the last five years; Sabra, for about two years; and Corona for about the last eighteen months. These last wo names are the names used by Mr. Bart's companies, particularly in respect of sheeting, pillow cases, and other bedding products. When B. & S. Products commenced to market sheets and other bedding products under the name "Bartmill" in May/October 1979, they were distributed through retail outlets in New South Wales, Victoria, South Australia and Western Australia. Following complaint by the applicants, B. & S. Products agreed to cease using the name "Bartmill" on packaging and to take steps to withdraw the use of the ---/7 business name "Bartmill". B. & S. Products had lodged an application for registration of "Bartmill" as a business name under the Business Names Act 1962 of New South Wales with the Corporate Affairs Commission in July 1979. The application form shows B. & S. Products as the proprietor of the name and the nature of the business proposed to be carried on as "marketing of bed linen, etc.". On 18 January 1980 B. & S. Products lodged with the Corporate Affairs Commission an application for registration of "BART-~MILLS" as a business name. The nature of the business was described as "marketing of bed linen, etc.". This name was registered by the Commission on 9 April 1980, Although the initial dispute between the parties was as to whether B. & S. Products could use the name "Bartmill" as a brand name for its goods, Mr. Bart and the respondent have disavowed any intention of using it in the future. They seek to use the name "BART-MILLS". Whether they can do so is the principal question to be decided. B. & S. Industries is a party to the proceedings because Mr. Bart has restructured his companies, and the business previously carried on by six companies is now carried on by one company, namely, B. & S. Industries. Until about June 1979 "Bradmill" sheets were marketed in a package bearing no real resemblance to its present packaging. In about Jume 1979 the packaging changed to its present form which consists of a clear plastic packet in which the product 1s contained. The packet measures approximately 13 inches by 9 inches across .../8 its front; at its top there is a horizontal strip about 3% inches wide with one background colour - the sample in evidence being deep blue. Written in bold white letters in the centre of the strip is the word "Bradmill". Under that there is, in lettering of different colour and size, a description of the product contained in the packaging and under that, on both left and right, 1s the description of the material from which the product is made, its dimensions and certain other matters. Lower down on the front of the packet, on the left-hand side there is a circle with an external diameter of 24 inches approximately in the same background colour as the colour of the longitudinal strip; then the circle contains in white lettering a description of the contents of the package. Within the circle there is another circle in a different colour to the blue background. The packaging initially adopted by the respondents in about October 1979 with the word "Bartmill" contained a horizontal strip across the top of the packaging about 23 inches wide and not covering the full length of the package, but leaving a small marginal strip at each end covered by clear plastic. This horizontal strip is also in a background colour, although a different colour to that adopted by the applicants; and towards the left of the strip the word "Bartmill" is printed. The "B" is in the upper case and the oter letters are in the lower case, as is the word "Bradmill"; but the capital "B" in Bartmill is, what is described in the evidence, as a "flowery" "B", To the right of the word "Bartmill" there ../9 -9- is a statement, "for Bedroom Elegance" and underneath 1t a statement, "Easy Care 50% Cotton 50% Polyester". Below the horizontal strip and to the right of the package there is a circle with a diameter of about three inches and within it an internal circle of a diameter of about 24 inches coloured white containing a statement of the product and its dimensions. Below the circle there is a form of tail which does not appear on the product produced by the applicants. The proposed "BART-MILLS" packaging is much the same length as the "Bradmill" packaging but wider. There appears a horizontal strip at the top of the packaging about twelve inches long and about 23 inches wide. There are two background colours on this strip, one is darkish brown and the other bright gold. They are divided by a line drawn at an angle to the top and bottom lines of the strip. "BART-MILLS" is printed in the upper case and divided by a hyphen. The "S" is in a different form of print to the other letters. The letters, "B", "A" and "R" are in a slightly exaggerated form as, perhaps, is the letter "T", To the right of "BART-MILLS" are the words "PTY. LTD." in smaller print and in the upper case. Underneath these words there appears in smaller lettering "Easy-Care 52% Polyester 48% Cotton". Lower down the package and towards the bottom right-hand corner there is a circle with an external diameter of about 2% inches principally in the one colour corresponding to the principal colour of the horizontal strip namely, dark brown, and included in the circle is a reference to the product and its dimensions. ..-/10 -~10- The only useful way to compare the products is to see them in their packaging. This I have done, both in Court and in chambers. It was late October 1979 that B. & S. Products commenced to market sheets, pillow cases and other bedding products as "Bartmill"; but this has now ceased. Save for some small sales earlier this year, it has not yet marketed products as "BART-MILLS". There is evidence from five members of the public given by affidavit and read by counsel for the applicants. None of them was cross-examined. Each of the affidavits 1s substantially the same as the others and each deponent said, in effect, that he or she has known the name "Bradmill" for many years as a result of buying sheets, pillow cases and other similar goods and believes that "Bradmill" products are of good quality. On a particular occasion in July 1980 he or she was shown a packaged sheet bearing the name "Bartmill" and "on seeing the packaged sheet...I immediately associated 1t with 'Bradmill' because of the similarity of the word, 'Bradmili' and 'Bartmill' and also because of its similarity to 'Bradmill' packaged sheets that I have seen." The same evidence was given with respect to packaged pillow cases. The pillow cases are in smaller packages than the sheets; but what I have said about the sheets and the form of packaging of "Bradmill", "Bartmill" and "BART-MILLS" is substantially the same. The parties have not drawn any relevant distinction between sheets and pillow cases with respect to any issue in the case. 2/11 -11-~ Section 52 of the Act is concerned with misleading the public and not merely injuring the reputation or goodwill of competitors in trade or commerce: Hornsby Building Information Centre Pty. Limited v. Sydney Building information Centre Limited (1978) 140 C.L.R. 216. However, as I said in Puxu Pty. Ltd, v. Parkdale Custom Built Furniture Pty. Ltd. (1980) 31 A.L.R. 73 at p. 92:- "Although the section is directed to the protection of the public from misleading or deceptive conduct, and must not be treated as an extension of the tort of passing off, the principles developed by the courts in the field of passing off are helpful when considering the construction and application of the section." Generally as to s. 52, see Hornsby Building information Centre and Puxu. A man is entitled to carry on business under his own wame; but he may be restrained from putting his name on his goods or from selling his goods under it if to do so would result in misleading or deceptive conduct; see Wright, Layman & Umney La. v. Wright (1949) 66 RPC 149 at pp. 150 and 151; Banbury Buildings Limited v. Sectional Concrete Buildings Ltd. (1970) RPC 463; Joseph Rodgers & Sons Ld_v. W. N. Rodgers & Co. (1924) 41 RPC 277, per Mr. Justice Romer at p. 291; and Parker- Knoll Limited v. Knoll International Limited (1962) RPC 265. A distinction must be drawn between the right of a man to carry on business under his own name and a company that seeks to carry on business under the name of its promoter. An individual company with a title of which the name of a natural person, who is its proprietor, forms part does not have the ./12 -12~ rights that the individual himself has: see Fine Cotton Spinners and Doublers' Association, Limited v. Hardwood Cash & Co., Limited 1907 2 Ch. 184; and Kingston, Miller & Co., Limited v. Thomas Kingston & Co., Limited 1912 1 Ch. 575. I have referred already to certain of the differences and similarities between the packaging of "Bradmill" on the one hand and "Bartmill" and "BART-MILLS" on the other. First impressions are important. A person who goes into a shop to look for sheets, pillow cases or other bedding products, who is familiar with the name "Bradmill" and who sees "Bartmill" or "BART-MILLS" would not pause to carefully examine the differences between "Bradmill" on the one hand or "Bartmi11" or "BART-MILLS" on the other. Some people may not notice any difference at all and think they are the same product. Others, and this is perhaps more likely, may be conscious of differences, but think that "Bartmill" or "BART-MILLS" is associated with "Bradmill" products or with the manufacturer of "Bradmill" products or that the two products come from the same source. The class of persons likely to be purchasers of "Bradmill" or "Bartmill" or "BART-MILLS" products would include the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated and men and women of various ages pursuing a variety of vocations: see Puxu (supra). Notwithstanding the differences between the packaging of the two products, they convey to my mind an overall «2/13 =13- impression of close similarity. I am satisfied that members of the public on seeing the packaging of the respondent bearing the words "Bartmill" or "BART-MILLS" would assume, at least, that they came from the same source as "Bradmill" products. The evidence established a case of actual deception or misleading of the public as to "Bartmill". In reaching that conclusion I have formed my own view based upon the evidence as a whole independently of the evidence of the members of the public; but I note that such evidence confirms my view. Nor do I discern any material difference between "Bartmill" or "BART-MILLS". True, in the case of "BART-MILLS" there is a hyphen between the words, the background of the strip on which they appear is in two colours not one; there are differences in printing between "Bartmill" and "BART-MILLS" and also, "PTY. LTD." is added to the "BART-MILLS" packaging. I think "Bartmill" is perhaps a clearer case of misleading or deceptive conduct than "BART-MILLS", but "BART-MILLS" nevertheless falls within the conduct proscribed by s. 52. It is not a case of permissible brand names un a deceptive get-up, rather it is a case of deceptive names used in conjunction with a deceptive get-up. In addition, the conduct of the respondents 1s such that members of the public "will be caused to wonder whether it might not be the case that the two products came from the same source. It is enough if the ordinary person entertains a reasonable doubt"; per Kitto J. in Southern Cross Refrigerating 22/14 -14- Co. v. Toowoomba Foundry Pty. Limited (1954) 91 C.L.R. 592 at 595; Puxu (supra) at p. 100 and the cases there cited. Mr. Bart gave evidence as to why he wanted all the products of his group to be known by only one name and, in particular, the name "Bartmill" or "BART-MILLS". He did not concede that the name "Bartmill" was confusing or misleading but recognised that a stronger case might be made out by the applicants with respect to that name than "BART-MILLS". He prefers the name "Bartmill" but 1s contectwith the name "BART- MILLS", Mr, Bart said that certain of the names of some of his company's products: ",.. are not in line with the contemporary manner of popularising by means of intensive publicity whatever one has to offer for sale or by way of services. I consider - the right to use my family name of 'Bart' as my natural right. All the more so as both my sons are of great assistance to me in managing my company; they are the working directors of and engaged in full-time involvement with the companies! day to day operations. I make frequent trips overseas, some of them for fairly lengthy periods, and but for my sons! assistance my freedom of movement in this respect would be greatly limited. I am anxious to make their future business career easier by popularising our family name still more. I also wish to give our name greater prominence in the field of textiles as an acknowledgement of what I have achieved since my arrival in Australia. Now that my business has expanded to its present size and both my sons are working in it, I wish to embark upon a publicity campaign which will have the following elements:- (a) it will direct public attention to the fact that my business is a family owned business. (b) It will direct public attention to my family name - Bart, 22/15 -15- (c) It will direct public attention to the magnitude of the enterprise. (ad) It w211 direct public attention to the fact that by dealing with us, they are dealing with manufacturers. The latter two considerations make the use of the word "mill" or "mills" highly desirable. I am also anxious that the name of the enter- prise be short and easy to spell and remember. All these factors make me anxious to use the name "Bart-Mills". I do not believe that the name "Bart-M2111s" will cause any confusion with the plaintiff. It is certainly not my intention or desire to cause any such confusion." Mr. Bart said that in his view the word "mill" or the plural "mills" is apposite to describe the nature of the operations carried on at his plants. He was cross-examined, and counsel for the applicants attacked his credibility, especially as to the reasons given by him for the use of the name "Bartmill" and later "BART-MILLS", Mr. Bart is proud of his achievements since his arrival in Australia over 30 years ago. He has built up a successful business. I accept him when he says that he wishes to use the one brand name on all the products offs group of companies and that he wishes his surname to form part of that name. I have some difficulty in accepting the word "mili" as an apt description of either the processes carried on at Arncliffe or the burldings in which those processes are carried on. I should add that I had the benefit of a view 22/16 -16- of the factories of Mr. Bart's companies at Arncliffe during the hearing of the case. However, some of the definitions of the noun "mill" in dictionaries; for example, the Shorter Oxford Dictionary, Websters New World Dictionary and Chambers Technical Dictionary, are sufficiently wide to encompass those activities carried on at the Arncliffe factories; hence I am prepared to assume that "mill" is a not inappropriate word to use as part of the brand names for the products of the respondents. I do not find it necessary to decide whether Mr. Bart's explanation as to the use of the name "Bartmill" or ""BART-MILLS" is to be believed; nor do I find it necessary to deal with the credibility of the witnesses called except to say that, having seen the witnesses in the box and assessed their evidence in the light of the evidence as a whole, I am satisfied that, where the evidence of Mr. Francis - the sheeting director of Bradmill Industries and of Actil - conflicts with the evidence of Mr. Bart senior or of his eldest son, Mr. Frederick Bart, I prefer the ev-dence of Mr, Francis. It is common ground that, if I conclude that the conduct of the respondents infringes s. 52, I should not consider the conduct with reference to s. 53. As I have reached the conclusion that the respondents have infringed s. 52 I will not deal with s. 53. In the result the applicants have established their claim to relief. I make the following orders:- 22/17 -17- 1, That the respondents, by their servants and agents, be restrained until further order from engaging in trade or commerce in conduct that is misleading or deceptive or likely to mislead or deceive by selling, offering for sale, dealing with,displaying or advertising any products being sheets, pillow cases, bedding, quilted covers, towels, curtains, drape fabrics, apparel fabrics, garments or other textile products under the name "Bartmill" or "BART-MILLS" or any similar name. 2. I reserve liberty to any party to apply in relation to any matter arising out of the making of these orders on seven (7) days' notice. 3 I order the respondents to pay the applicants' costs of these proceedings including reserved costs. 4. Exhibits may be handed out at the expiration of the period of twenty-one (21) days unless an appeal from my judgment is lodged in the meantime. | cert'y that this and the Arxhltn (6) preceding pages are a truo cory cf the Reasens fer Judgment hore:n cf h.s Honour Mr Justice Lockhart ML bn. AW) Associate pated § ec 1980