CATCHWORDS TRADE PRACTICES - market for coolers - applicants' product "West Coast Cooler" - heavily advertised ~ association of coastal image with applicants' product - whether calling rival product "Coastal Cooler" misleading or deceptive conduct - whether mere confusion or uncertainty - disbelief of evidence entitling court to infer opposite - no intention to mislead or deceive. Trade Practices Act 1974 ss.52,53 Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd (1982) 149 C.L.R. 191. Taco Company of Australia Inc v. Taco Bell pty Ltd (1982) 42 A.L.R. 177. Steinberg v. Federal Commissioner of Taxation (1975) 134 C.L.R. 640. Cadbury Schweppes Pty Ltd v. Pub Squash Co Pty Ltd (1982) 32 A.L.R. 387. IRISH DISTILLERS LTD & ORS v. S. SMITH & SON PTY LTD & ANOR No. G514 of 1986 Jackson J. 5th December 1986 Sydney. 4 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION BETWEEN: CORAM: JACKSON J. DATE: 5 December 1986 PLACE: Sydney ere eee No. G514 of 1986 IRISH DISTILLERS LIMITED First Applicant PENFOLDS WINES PTY. LIMITED Second Applicant THE WEST COAST COOLER COMPANY PTY. LIMITED Third Applicant S. SMITH & SON PTY. LIMITED First Respondent THE VINTNERS COMPANY PTY. LIMITED Second Respondent REASONS FOR JUDGMENT These are proceedings in which the applicants seek relief in respect of alleged contraventions of s.52(1) of the Trade Practices Act 1974, of s.53 of the same Act, and in respect of passing off. The applicants are engaged in manufacturing and distributing a brand of low alcohol fruit flavoured wine drink (or "cooler") under the name of "West Coast Cooler". The first applicant is an Irish company which 1s a subsidiary of Irish Distillers Group PLC which in early 1984 had developed the product which was test-marketed in Ireland under the name of "West Coast Cooler". The first applicant began manufacturing West Coast Cooler in early 1985 and has appointed licensees to manufacture, market and sell West Coast Cooler around the world. The second applicant, pursuant to an agreement dated 30th September 1985 between itself and the first applicant has an exclusive license to manufacture, market and sell West Coast Cooler in Australia and other South Pacific countries. The third applicant, a subsidiary of the second applicant, appears to be the actual manufacturer of West Coast Cooler in Australia, West Coast Cooler was first offered for sale in Australia on 18th April 1985 1n New South Wales and the Australian Capital Territory and at later dates in that year un the other States and the Northern Territory. It 1s sold in 250 ml. glass bottles each bearing a blue and white label. The second respondent 1s a subsidiary of the first respondent, S. Smith & Son Pty Ltd. and in September 1986 the respondents began selling their own type of cooler under the name "Coastal Cooler". Coastal Cooler 1s sold in two litre casks which are brightly coloured in blue, yellow, orange, red and green with the words "Coastal Cooler" in white. It may be said immediately that there 1s no similarity at all between the packaging and "get-up" of the two coolers. The term "cooler" has come to be used in the market as a generic term describing a drink consisting of a blend of fruit, or fruit flavoured, juice and wine. "Coolers" were first offered for sale as such in the United States in 1981 and have since become popular in other parts of the world, early 1985 being the time when the first coolers were offered for sale in Australia. Coolers are of two varieties, namely carbonated, of which the applicants' cooler is an example, and still, of which the respondents' cooler 1s an example. This fact, to a certain extent, determines the packaging of the product as a carbonated cooler cannot be packaged in a cask and must be sold in a bottle. The evidence establishes that coolers are heavily advertised and are very popular in Australia, the advertiser's target group being young adults of 18 to 24 years with television, radio and other advertising placing emphasis on images with which the target market 1S perceived to identify. As the first respondent's managing director and marketing director Mr H1ll Smith deposed:- "These images were based on hedonistic pursuits and in particular upon sunshine, sand, sea, surfing and island escapation." The applicants in particular have indulged in extensive promotion of their product including television and radio advertisements featuring the words and phrases "Head for the Coast", "Heading for the Coast", and "Coast", By about March 1986 when Mr Hill Smith decided that the respondents should enter the market with their own cooler, West Coast Cooler had achieved, as I accept, a substantial share of the market to which I have referred. It was acknowledged by Mr Hill Smith in evidence to have been the joint market leader. I am also satisfied that there had been achieved in the mind of potential consumers in the market and those selling in the market (such as hotels, restaurants, drive-in bottle shops and liquor stores) an identification of tne name West Coast Cooler with the applicants' product and also, by reason of the extensive promotion which had taken place, an association of images of sea, surf, sand and, more generally, beaches with the product West Coast Cooler. In that sense there was an association of a coastal image with the applicants' product. I do not accept, however, that there had been established such an identification with the applicants' product of the coastal "concept" - 1f I may be forgiven that shorthand expression —- that to use the word "coast" or a derivative of 1t 1n the name under which a cooler was marketed was to mislead or deceive or to be likely to mislead or deceive potential wholesale or retail purchasers of cooler. [In this regard the nature of the product 1s such that the promotion of 1t will almost inevitably be based in large measure on images of beaches, and that 1s evidenced by the names chosen by suppliers of cooler, other than those presently 1n question, so many of which are designed to evoke such images. It 18 clear, of course, that some possibility of confusion or uncertainty will not suffice to prove misleading or deceptive conduct (Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd (1982) 149 C.L.R. 191) and that in deciding the question raised by s.52(1) one must, in looking at a particular section of the public, treat it as including "the astute and the gullible, the intellegent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations" (Taco Company of Australia Inc. v. Taco Bell Pty Ltd (1982) 42 A.L.R. 177 at 202). I think that there is some possibility of confusion or uncertainty in the minds of some purchasers, by reason of the fact that there 1s some similarity 1n the names of the two coolers. I do not think, however, that this 1s likely to be significantly any greater than the confusion or uncertainty arising between say West Coast Cooler and say Island Cooler. I do not think that the confusion or uncertainty 1s due to misleading or deceptive conduct on the part of the respondent (see Taco Company of Australia Inc. v. Taco Bell pty Ltd. (Supra) at 203). I may say that Mr Hill Smith gave evidence that 1t was he who, towards the end of April 1986, decided on the name Coastal Cooler. He denied in evidence that the success of West Coast Cooler played any part in his decision to choose the name Coastal Cooler. I do not accept his evidence on this point and the nature of the issue 1s such that I am entitled to infer from that disbelief that the success of West Coast Cooler did play a part in the selection of the name Coastal Cooler (compare Steinberg v. Federal Commissioner of Taxation (1975) 134 C.L.R. 640 at 694). I am conscious of the fact that, as the Privy Council said in Cadbury Schweppes Pty Ltd v. Pub Squash Co Pty Ltd (1980) 32 A.L.R. 387 at 396, where an intention to deceive has been found, it is not difficult for the Court to infer that the intention has been, or in all probability will be, effective. Making a finding of such an intention 1s not decisive of the ultimate issue, however (see the same case at 397). In this case I think that Mr H111 Smith did not intend to mislead or deceive in the sense of acquiring any of the reputation of West Coast Cooler, or intending to pass Coastal Cooler off as West Coast Cooler. Rather I think that he recognized that the success of West Coast Cooler had shown that the term "coast" well encapsulated the marketing concepts upon which he wished to rely. One can well understand that approach being perceived by the applicants as "half-smart" rather than "smart", but that does not of itself give rise to a right to restrain the conduct. In the result the claim under s.52 of the Trade Practices Act fails, It is accepted by the applicant that if that claim falls, the other claims must also fall. The application 1s refused. I order that the applicants pay to the respondents their costs of and incidental to these proceedings, including reserved costs, to be taxed. I certify that this and the 6 preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Jackson. Associate: Title chiutere Date: 5 December 1986 Counsel for the applicant: Mr J.D. Heydon Solicitors for the applicant: Dawson Waldron Counsel for the respondent: Mr P.M. Jacobson Solicitors for the respondent: Sly & Russell Date of hearing: 2nd December 1986