523: (NOT FOR DISTRIBUTION) IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) VG No. ) GENERAL DIVISION ) ) BETWEEN : NYLEX CORPORATION LIMITED and OGDEN INDUSTRIES PTY LTD MINUTES OF ORDER COURT: Woodward J. DATE: 9 December 1986 PLACE: Melbourne THE COURT ORDERS THAT: 1. The notice of motion be dismissed with costs. 374 of 1986 Applicant Respondent 2. The directions hearing be adjourned to 19 December 1986. (NOTE: Settlement and entry of orders is dealt with by 0.36 of the Federal Court Rules). IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG No. 374 of 1986 GENERAL DIVISION NYLEX CORPORATION LIMITED Applicant and OGDEN INDUSTRIES PTY LTD Respondent COURT: Woodward J. DATE: 9 December 1986 PLACE: Melbourne REASONS FOR JUDGMENT This is an application for interlocutory injunctions arising from the way in which the respondent labels coils of garden hose, with fittings attached, which it is presently selling in the course of its business. The respondent is a company which sells, under the trade name Neta, brass hose fittings among other things. In order to increase its share of the market it decided that, in the present season, it would sell some hoses with the fittings attached. For some years it has used green and gold as its preferred colours for advertising purposes, and most of its products are either a natural brass colour or painted ina similar colour. It is therefore understandable that it decided to use a green reinforced hose with gold stripes along it and brass fittings attached, and to call the complete hose 'Neta Gold'. I do not know whether it was influenced, in deciding on the gold stripe, by the fact that the applicant had for several years been successfully marketing a green reinforced hose with similar gold stripes. As it began to promote this new product to the trade, in about April this year, it learned for the first time that the applicant was also proposing to highlight the word 'Gold' in its sales campaign by using the expression 'Premier Gold'. The respondent took advice from a firm of patent attorneys, as a result of which it decided not to proceed with its Plan for a hose with a gold stripe, but to use a plain green reinforced hose instead. However it saw no reason to resile from its decision to use the name ''Neta Gold'. The only other decision it had to make was whether to go ahead with the use of labels, which it had had printed, which showed a hose with a gold stripe. It decided to use the stocks it had, before changing to a fresh label which, presumably, will show a plain green hose. [It will certainly not show a hose with gold stripes. The result is that, until now, the respondent's hoses have been sold with a label attached containing the words 'Neta Gold' in large letters, a certain amount of written information and a picture of a green hose with a gold stripe. It is immediately obvious, because the hose is not wrapped in any way, that the hose itself bears no stripes. There is evidence before me that the stocks of labels showing the gold-striped hose are almost exhausted, though I was not informed how many of them are attached to hoses in the respondent's stores. Counsel for the respondent stated formally to the Court that "the respondent does not intend hereafter to manufacture or sell a garden hose bearing a gold stripe". This served to clarify any possible ambiguity in the affidavit filed on behalf of the respondent, in which its Sales and Marketing Manager said, "In late June I decided that it was desirable to have a hose which did not have any stripes but that the colour of the hose should remain green". The action which the applicant has brought against the respondent is based upon the expectation that the respondent would be marketing a hose with a gold stripe. The only reference in the application or statement of claim to the use of the word 'gold' in labelling, arises in the context of the use of gold stripes on hoses. The relief claimed in the notice of motion before me is also directly related to the use of a gold-striped hose. When this was pointed out by counsel for the respondent in his final address, counsel for the applicant sought to amend the notice to add a claim for relief in these terms "That the Respondent... be restrained until the hearing of this proceeding or until further order from .... manufacturing, selling and offering to sell whether by way of wholesale or retail anywhere in Australia .... green garden hose under or by reference to the name 'Gold' ...." Counsel for the respondent objected to the amendment on the ground that it raised a different case, in which the applicant was claiming, in effect, a monopoly in relation to the word 'gold' in respect of all garden hoses. I am prepared to allow the amendment to the notice of motion because I don't believe any injustice is thereby done to the respondent, the relevant issues having been fully argued, and it is obviously desirable to resolve all issues as fully as possible at this stage. In a recent decision (unreported, 25 November 1986) in the related cases of Nylex Corporation Ltd v Sabco Ltd (VG 331 of 1986) and Nylex Corporation Ltd v Dawn Plastics Pty Ltd (VG 366 of 1986), I found that the applicant could ultimately succeed in actions against competitors marketing a green reinforced hose with gold stripes, but its case was not strong because of distinctive labelling. I held, while expressing some doubts, that there was a serious question to be tried. However, in the present case I have no doubts. It is my clear view that the applicant has no prospect of success. It was only beginning to use the brand name 'Premier Gold' at about the same time as the respondent was launching 'Neta Gold'. It had previously, over several years, referred in its advertising to its 'gold stripe' but 1t could not possibly show that it has already acquired a reputation in the single word 'gold' associated with hoses. 'Neta Gold' is nothing like 'Premier Gold', and the separate brand names 'Neta'' and 'Nylex' are both well established and clearly shown on their respective hose labels. I do not believe any potential purchasers could be misled or deceived by the label on the respondent's hoses. There is no serious issue to be tried. The question of convenience therefore does not arise. If it did I would resolve it in favour of the respondent because of the trouble it would cause - at a very important and difficult time of the year - to recover and relabel whatever hoses are still in the respondent's control. Further, the respondent has based its marketing campaign for the season on the name 'Neta Gold' and, for reasons which I gave in the 25 November decision (above), I think it is best, in cases such as these, to allow competition between the parties to take its course. The notice of motion should be dismissed with costs and the directions hearing adjourned to 19 December 1986. I certify that the five (5) preceding pages are a true and accurate copy of the Reasons for Judgment herein of The Hon Mr Justice Woodward (~~ ssociate Dated: 9 December 1986 Counsel for the Applicant: Mr J.G. Larkin QC & Mr M.W. Shand Solicitors for the Applicant: Messrs Clayton Utz Counsel for the Respondent: Mr A.J. Myers Solicitors for the Respondent: Messrs Darvall McCutcheon