27 / IN THE FEDERAL COURT OF AUSTRALIA NEw SOUTH WALES DISTRICT REGISTRY No. G17 of 1981 GENERAL DIVISION ) Between BENTLEY FRAGRANCES PTY.LIMITED and CHARL&S OF THE RITZ GROUP LiMiTsb—s—CSsSOSSSCSCtit«~'s Applicants and SIMES AUSTRALIA PTY. LIMITED Respondent CORAM: SHEPPARD J. 16 MARCH, 1981 JUDGMENT (On application for interlocutory relief) This is an application for interlocutory relief. The applicants seek to restrain until the final hearing of the proceedings the marketing ty the respondent of a range of perfumes and associated products known as Orient. The second applicant, which 1s incorporated in the state of Delaware in the United Stetes of America, carries on business as a manufacturer, marketer and distributor of fragrances, cosmetics and toiletries, including those sold under the trade name Yves Saint Laurent. Amongst tne second applicant's products is a range of products sold uncer the brand name Opium, This range includes Opium eau de toilette, concentrate perfumes, dusting powders, soaps, bath o1l1s and body creams. The eau de toilette and perfumes are made up from essential oils produced in France and purchased by the first applicant from a related French company, Parfums Yves St.Laurent S.A. Both these perfume products were first sold in Europe in 1977 and were intro- duced into the United States market in 1978. They were first sold in Australia in September 1978. The concentrate is sold in three sizes of containers, and the eau de toilette is sold in five sizes. Shortly after the intro- duction into the Australian merket of the Opium perfume products, the other Cpium products (dusting powder, soap, bath 011 anda body cream) were introduced. From the time Opium perfume products were introduced into the Australian market in September 1978 until the end of November 1980, total retail sales of the srocucts in Australia amounted to about $2,700,000. Total retail sales in Australia of all Opium products up to tne end of November 1980 amounted to about $2,900,000. The Opium brand of products is sold in 99 countries, and total retail sales worldwide between the time of introduction of the products and the end of November 1980 amounted to about »US180,C00,0CC, The first applicant is a company incorporated in Australia. It 1s the distributor for the second applicant's products in Australie. Opium perfumes are sold in all States of Australia except Queensland, There have been no sales in Queensland because the Department of Health in that State has notified the first applicant that the department would regard sale of the products as being in contravention of the Health Acts 1937-1976, The first apolicant sells Opium brand products to retailers throughout Australia. At present there are about 435 retail outlets selling. Of these outlets, 27 are duty-free stores, 285 are pharmacies, 55 are perfumery stores and 68 are department stores. There are 175 outlets in New South Wales, 183 in Victoria and Tasmania, 10 in South Australia and 36 1n Wéstern Australia. Opium brand perfumes have been extensively promoted to the public in Australia, In the August 1978 issue of Vogue magazine there was a four page advertisement for Opium perfumes. Since then the advertising for ,Cpium perfumes has included numbers of full page and couble page advertisements in magazines intended to be read principally by women. The magazines are in the main Vogue, Cosmopolitan and Mode, The most recent advertisement is that appearing in the issue of Cosmopolitan for Decenber 1980, In total, the expenditure on magazine advertising has been in excess of $48,C00. Total expenditure on promotion, including media advertising, displays and public relations, has been in the order of $120,000. The respondent 1S a company incorporated in South Australia. It has produced several ranges of perfumes and toiletries. One of its directors is Mr. H. J. Ninio, who is a registered pharmacist. Mr. Ninio and one other shareholder hold all the issued capital, botn in the respondent and in another company, Westab Pty. Limited, which has for many years conducted the business of a specialist perfume and toiletries retailer in Adelaide. In 1979, that is after the Opium range of products had become established on the Australian market, the respondent, through Mr. Nano, decided to launch a new range of products, As a result of that decision, the respondent 1s about to launch on to the market a range of perfumes anj associated products known as Crient. The applicants learned of the respondent's intention from a brochure, which came to their attention 1n February and which had been circulated to retail stores in Victoria, New South Wales anc Gueensland, and from an advertisenent in the March 1981 issue of Pharmacy Trade, a magazine circulated to pharmacies and companies which suoply them. Both the brochure and the advertisement showed coloured pictures of boxes and bottles containing the Orient products. They also said that there was to be su stantial advertising in certain women's magazines, including Cosmopolitan, commencing in May 1981 and con- tinuing each month until the end of the year. Of the product, the brochure said: "The 'Orient' perfume ... a special place in the market. "Orient' is the culmination of extensive research commissioned by Simes into the market needs and attitudes of the Australian female and her perfume. Interestingly enough, this research highlighted the need for a product that followed the trend instigated by the great fragrance creators of our time ... tnat 1S, a French fragrance with a subtle hint of Orient. Furthermore, this perfume had to be within the reach of the widest market segment price-wiSe ... and the fragrance had to be long-lasting. You could call it a 'Super Fragrance'. We call it 'Orient'. We packaged 1t to capture an unstint- ang look of quality. Then we priced it to . capture the attention of the thraftiest of buyers." A facsimile of one of tne proposed advertiserents to be placed in the magazines to which I have referred said: " 'Orient' - It was created to be cifferent, born to capture the full richness and mystery of life that is the East." In addition to the brochure ana the advertisement in Pharmacy Trade, there have been placed in evidence further advertising material ana a display case containing the range of Orient products. As earlicr mentioned, there had been commenced in 1978 an extensive promotion of the applicants' Opium range of products. This had empnasised the oriental character of the product. Thus in a large advertisement published in the August 1978 issue of Vogue magazine at the beginning of the Opium promotion, the following appeared: "Captured from the Orient - Opium perfume is a rich and spicy composition of Jasmine, Myrrh, Coriander, Opopanax, Benjamin from Siam and other intriguing aromas, woven into the most sensual, mysterious and smouldering perfume ever to come from tne creative genius of Yves St Laurent." Counsel for the applicants submitted additionally that the name "Opium" itself implied a connection witn the East and its mysteries. Each of the products was said to be a French perfume. Each of the containers of the Opium range of products tears the words, "made in France", as well as the name Yves St Laurent. The respondent's product is described as a French fragrance with a hint of the Orient. The Crient product packages bear the words, "Parfums Déco - Paris". That 1s/business nane registered in South Australia and intended te be reristered in France, but there 1s nothing on the container to indicate that this 1s so. Clearly, ordinary people would understand that the product was in some way of French origin. It is now necessary to say something of the packeging of each product. Most of the packaging 1s 1n bottles or other containers which are themselves encased in cardboard boxes. The predominat colour of the Opium boxes is brown, Hach box has a black top ana bottom and a distinct black band of a centimetre or less surrounding its top and bottom edges. Each of the brown faces is divided by three black-edged, narrow gold bands. Upon the brown faces are also portrayed golden leaves. The name Opium appears in gold on the centre of one of the brown faces of each box. The name Yves St Laurent appears also in gold on the lower black surround of each. There 1S other notation on each, but it 1s not distinctive and it 1s not necessary to refer to it. The predominant colour of the Orient boxes 18 red, Like the Opium boxes they have black tops and bottoms end black surrounds at their top and bottom, They co not have gold bands on the red background, but there are gold bands which border the black edges of the red faces. On each red face are painted golden leaves. The Jeeves are of a different snape from those on the Opium boxes. The gold is a somewhat different shade of gold. Upon each of the Orient boxes 1s the word "Orient" written in ,;sold in the centre of one of the red faces, Wratten in gold on the bottom black edging are the words "Parfums Déco - Paris" As in the case of the Opium boxes, there is other notation on each to which it 1s unnecessary to refer. Each product can be displayed in a specially rade display stand. These are designed to hold each product in the range and could be used to display prominently the articles in a retail shop vhere they were sold. From a distance one's impression is of a red and gold display in the case of the Orient stand, and a brown and gold display in the case of the Opium stand. The differences which there are in the shape of the leaves and the shades of gold which have been used tend to be obscured. One is also conscious of the black edging, although in the case of the Orient products, the display stand itself obscures the lower black surround. Tne names Opium and Orzrent are prominently displayed on each stand. Mr. Ninio was cross-examined to suggest thet the respondent had deliberately imitated the get-up of the applicants' product, He denied this, but he did agree that there was some resemblance between the two packages and said that this nad been perceived before it was decided to adopt the packaging which has been selected. Other suggested forms of packaging were discarded, Mr. Ninio said that of all the forms of packagin; which had been considered, he thought that the one selected was closest to that of the Opium products which he knew had been very successful. He was askea why he chose one wnich was close at all. He said: "Well, we honestly believed that there was no real comparison. We thought that 1t was quite distinct and quite different." I express no final view on the veracity of that evidence, but for the purposes of this application for interlocutory relief I think 1 should proceed on the assumption that it is correct. There was argument as to the relevance of evidence which would tend to show a conscious intention to imitate. It 1s not appropriate in an interlocutory application to come tc any final conclusion about the significance which such evidence could have. In the light of the evidence given by Mr. Ninio, 1t can in any event play no part in the outcome of the proceedings. I should assume therefore, without my decision having any effect for the final hearing, that there was no conscious decision to imitate or copy the Opium get-up. I should next mention that evidence was led on benalf of the respondent that the Orient range of products was intended to sell in a different section of the market from that in which the Opium products are sold. In paragraph 6 of his affidavit Mr. Ninio said: "Within the Australian perfumery market there are three distinct sub-markets catered for by the following categories of market: (a) 'Premium' or 'haute couture' brands selling at retail unit prices generally in excess of 320; (b) Products specifically comprising those products by the Avon group, marketed by door to door selling; (c) A group of products commonly referred to in the trade as 'life-style fragrances' selling at retail unit prices less than 210." Mr. Ninio's evidence was that tne Opium renge of products was of premium quality whilst the Orient renge was not. It was in the life-style category. If this evidence were accepted, one would be inclined to conclude that there was less likelihood of deception because the two products would not be in competition with one another. However, I do not accept the evidence, Amongst the documents produced by the respondent pursuant to a notice to produce was e document prepared in its office for tne company whicn had designed its packaging. Amongst other tnings, the document said: "All packaging and POS material to be as close as economically feasible to the best quality available from competitive perfumes on the market place, 1.e. French >rends." 10. In relation to that document Mr. Ninio gave the following evidence: Mihat is the object of packaging it in that way? (That is, 1n the way proposed in the document to which I have gust referred) --- The inference 1s that 1t should be packaged in a good-looking container end gooa-looking packaging. In as good a looking package as, within reason, the high quality French perfume? ---- That 15s correct. Would you please tell me why, what 1s the object of doing that, where does it lead to? ---- Sales. On what basis?----- Appearance and packaging. Your customers are not buying the vackaging, they are buying what 1s inside? ---- Yes. Is not the object to make them think that they are getting something which, if not as good as, is nearly as good as tne high quality product? ---- Yes, I suppose that would be right. So to that extent you are in competition with a high quality product such as this Opium? ~---To that extent, yes." It 1s true that the Orient rang2 will be marketed at prices substantially less than those at which the Opium range of products sells. But the evidence to whicn i have referred establishes, in my opinion, tnat to an appreciable extent the two products, if the Orient range comes on to the market, will nevertheless be in competition. Furthermore, Mr. Ninio had also given evidence to the following effect: "The perfume market had for many years been divided, 1 suggest te you, betwecn ¥rench and non-French perfumes, had it not? +... Yes. ll. "And French being the expensive, prestigious perfumes, 1s that correct? --- That 1s correct. And the others being less prestigious and not commancing such a premium? --- That 1s right." Notwithstanding that evidence, and Mr. Ninio's affidavit, to which I have earlier referred, the fact remains that the Orient range will be marketed as a French perfume. So much is clear from the name Parfums Déco-Paris which appears on each of the boxes, and from the advertising material which described the product as "a French fragrance with a subtle hint of Orient", For the purposes of this application 1 conclude tnat the two products are likely to be in competition with one another, That being a finding in an interlocutory application, it is not a finding intended to band the court when it comes to consider the matter on the final hearing. The remaining evidentiary matter to wnich I should refer is that 1t was the packaging alone which was relied upon by the applacant. It was not the quality or essential characteristics of the two products whicn were in question. It seemec to be assumed that purchases would be on the basis of appearance, notwithstanding that there was evidence that many purchasers of perfume try it on before deciding to buy. For the relief whicn they claim, the coplicants rely 12. upon threatened breaches of s.52 of the Trade Practices Act 1974 and upon passing off. For the moment I shall put passing off on one side. Section 52(1) of the Trade Practices Act provides: "fA corporation shall not in trade or commerce engage in conduct that is mis- leading or deceptive or that is likely to mislead or deceive." In support of their case, based upon threatened breaches of the section, the applicant ~elied, both alternatively and cumulatively, upon the following propos- itions: (a} Merbers of the public or significant sections of the public will te misled or deceived into believing that the two products are the same. (>) Members of the public or significant sections of 21t will be misled or deceived into believing tnat the two products originate frem the same trade source, or have a business connection with the same source, or that the Orient product has the sponsorship of the applicants. The first of these contentions was not strongly pressed although it was said that where the Orient range was the only product sold, either because it was sold in a section of a store away fron that where the Opium range was sold or 13. because the Opium range was not stocked, there would be likely to be significant confusion and thus deception. However, it was the second proposition which was the most strongly relied upon. Importantly 1t was said that members of the public would be deceived into thinkang that Orient was a cheaper version of the Opium product. In support of their submission the applicants relied upon the following matters of detail: (a) (bo) (c) (d) (e) Both products go or will go to the public as French perfumes. Both are also oriental fragrances. Tne names Opium and Orient are similar. Both commence with the letter 0. Both are short three syllable words, Both have an Eastern theme, The packaging has similar floral motifs against a dark coloured background, 1n the one case red and in thebther brown, colours which are of the same group. Both have black edging on the top and bottom. Some of the advertising showed the red as almost brown. That 1s true only of the facsimile magazine page shown in tne Pharmacy Trade magazine. 14, (f) The bottles, some of which were on display were of similar size and design. (g) Nothing on the Orient packaging indicated the name of the manufacturer or the source from which the goods have come. The name Parfums Deco-Paris was not necessarily an indication of this. It would not readily occur to one that 1t was a registered business name, (h) The Orient products were to be sold in the same market as the Cpium products. Counsel for the applicants relied upon the accumulation of all these factors. He acknowledged that 1t was the totality of the impression conveyed by the get-up looked at overall, which was the critical consideration, Perhaps because the Orient product is not yet on the market, or perhaps for other reasons, there was not availaole evidence of the kind not uncommonly called in these cases from members of the public, who might say that they were or were not misled, deceived or confused by the appearence of the Orient get-up. Such evidence 1s usually helpful. In this case I must do the best I can without it. I must bring to bear upon the material question to be decided, namely whether the applicants have made out a prive facie case, a judgment 15. on whether members of the public will be misled or deceived or will be likely to be misled or deceived, when the Orient range of products comes on to the market, into thinking either that the products are the same as those in the Opium range, or come from the same source - using that expression compendiously to embrace all the matters relied on by the applicants in that regard. In coming to a conclusion I must bear in mind that this is an interlocutory application and not a final hearing. The applicants must demonstrate that if the evidence remains as 1t 1s they will probably succeed, In that context, the word "probably" is not used in the sense of more probably than not but in the sense of there being, upon the basis of the evidence in the interlocutory proceedings, a significant or real question to be tried. On the other hand, so 1t seems to me, I should also bear in mind that it 1s unlikely there will be, upon a final hearing of the matter, much adéitional evidence which will bear directly on the ultimate question to be decided. The issues of conscious imitation and market remain to be decided. However, in the end it will be a question of assessing, upon the basis of the appear- ance of the two products, the likelihood of menbers of the public being misled or deceived. I should add that 16. if interlocutory relief were grarited 1t would seem unlikely that any of the user or potential user evidence called in some of these cases would be available. The product could not be released on to the market at least before the final hearing had concluded. In relation to the specific matters relied on by the applicants there can be no question but that tne matters stated in the various paragraphs are all proper to be taken into account, Nor can there be any cuestion as to the correctness of wnat tne applicants assert in each of those paragraphs. Eacn is factually correct. However, despite the similarities the differences remein,. The packages to be used and their portrayal in most of the advertising material are a distinct red. Those of tne Opium range are a distinct brown. The boxes are also different because the shapes of the leaves ar: the two shades of gold are far from being identical. The Orient boxes do not have gold bands except at the top and bottom edges. The names Opium and Orient are not the same. Counsel for the applicants rightly cautioned me egainst allowing the fact that the case has been befcre me for a week or so to concentrate my attention too mucn on the dissimilarities and away from the overall effect of tne packeging on the minds of customers and potential customers un the environment of retail stores, be tney pharmacies or 17. otherwise. I have endeavoured to heed that warning. The differences nevertheless are there and in my view make the products distinct. Red and brown may te from the same group of colours but they are not the same. The words "Opium" and "Orient" may be short, three syllable words which may to some minds congure up some of the mystery of the East, although whether Opium has the same connotation as Orient in this respect I am not sure, But the words are different words. Notwithstanding the similarities, the differences which exist are in my view marked. If one looks at the products individually as by picking un two packages, those differences are readily perceived. If one locks at the display stands from a cistance, althouzh it is true that the leaves appear mucn the same and the ditferences in tne two shades of gold are not distinct, the differences are nevertheless there, brousht about tainly in my opinion by the names of the two products ana the distinct red colour on the one hand and tne distinct brown colour on the other. In saying whet I have I bear in mind tnat customers may not always have the benefit of being able to contrast the two. That 1s an important factor to rementer. But, not overlooking it, I have to decide the matter on the overall impression I have of tne effect or the likely effect 18, of the two products on the mind of the potential customer. In this respect I think it appropriate to mention that wnen the two products were first shown to ne in chambers on the application which was made for ex parte relief on 6 March last, it dic not then occur to me that the case was a clear one. My initial and unaided impression at that time was that the cnance of confusion was slight. Thet was one reason why I refused the ex parte relief which was then sought. Having reflected on the matter for two or three days since I reserved my decision, I have reached the clear conclusion that the applicants have not, as tne evidence now stands, establishea a probability of success in the sense in which that expression is used in the cases, I do not think potential customers will ve vrisled into thinking that the products are the same, nor do I consider tnat customers will thinx they come from the same source, I have not until now considered the case made by the applicants based on passing off. It raises somewhat different considerations, but the essential matter for consideration is very much the same as 1t 1s under the 19. Trade Practices Act. No separate argument based on passing off was addressed to me. It follows that I do not consider that the applicants have made out a case of threatened passing off any more than they have made out a case of threatened breaches of the Trade Practices Act. My conclusions make it unnecessary for me to con- sider the balance of convenience. The evidence concern- ing it was not in contest and it appears cleerly and concisely in the affidavits, the exhibits and the oral evidence, I do not need to make findings on 1t. For the reasons I have given, the application for interlocutory relief is refused. (There ensued discussion with counsel concerning costs and directions). The formal orders I make are as follows: Tne application for interlocutory relief 1s refused. The costs of the motion will be reservec to the hearing. I direct the applicants to file their statement of claim on or before 20 March. I direct the respondent to file its defence on or before 27 March. Lists of documents are to be exchanged on or before 3 April. Inspection is to 20. take place forthwith, Any interrogatories by either party are to be served by 22 April and answered by 6 May. The matter will be mentioned on 27 March next at 9.30 for further directions, including a date for hearing. Exhibits to be returned. | certify that this end the 20 prececing pages era a true copy of the reasons for judgment here cf The Hor.curable * 4 Mr Justice Shopper d. . a4 4st Associate pated I Manche 145 al.