JUDGMENT No. 2407..3-L. CATCHWORDS Trade Marks - Infringement - Whether use tin good faith as description of character of goods. Trade Practices - Consumer protection - Misleading or deceptive conduct - Passing orf - Use by baker of name "Fritikin" on bread wrapper - Likelihood of confusion with bread manufactured by registered user of trade mark "Pritikin". Trade Marks Act 1955 - ss. 24, 26(1), 59, 60, 64(1)(b) and 78 Trade Practices Act 1374 - ss. 52, 53 and 55 F.H. Faulding & Co. Ltd. v. I.C.2. Ltd. (13564) 112 C.L.R. 537 Mark Foy s Ltd. v. Davies Coop & Co. Ltd. (1950) 395 C.L.R. 130 Caterpillar Loader Hire (Holdings) Pty. Ltd. v. Caterpillar Tractor Co. (1983) 48 A.L.R. 511 Hunters Products Fty. Gtd. vv. Rk. & C. Products Fty. Ltd. \1l9a7) A.T.P.R. 48, 563 149 c.0.R. 131 BERZINS SPECIALTY BAKERIES FTY. OCIMITED v. MONTY S CONTINENTAL BAKERY (VIC.) PTY. LTD. (trading as Monty s Continental Bakery) AND PRITIKIN PROGRAMS INC. NSW G213 of 1587 Jenkinson J. Melbourne 9 October, 1987 IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NSW G213 of 1987 GENERAL DIVISION - BETWEEN: BERZINS SPECIALTY BAKERIES PIvY. LIMITED Applicant AND: MONTY'S CONTINENTAL BAKERY (VIC.) PTY. LIMITED (trading as Monty's Continental Bakery) First Respondent B PRITIKIN PROGRAMS INC. Second Respondent CORAM: Jenkinson J. PLACE: Melbourne DATE: 3 October, 1987 REASONS FOR JUDGMENT Trial of questions in a proceeding. The word "Pritikin" is the name of an American, Nathan Pritikin, who has been well known in this country during the present decade. The word has been registered in Part A of the Australian Register of Trade Marks as a trade mark in respect of all goods in class No. 30, which includes bread, for 7 years from 13 November 1981. The second respondent is the registered proprietor of the trade mark, Nathan Pritikin having died after gaining registration. The applicant has been since August 1983 a 2. registered user in Australia of the trade mark for "bread, rolls and muffins inall shapes and sizes, frozen and fresh". The applicant and the first respondent bake and sell bread in competition. The applicant claims against the first respondent injunctive relief and damages in respect of use by that respondent, tn 1ts trade in bread, of the word "Pritikin", which use 15 alleged to constitute infringement of the trade mark, contravention of ss. 52, 53 and 55 of the Trade Practices Act 1974 and passing off. The second respondent was joined in compliance with s.78 of the Trade Marks Act 1955, and has taken no part in the proceeding. The questions tried by me are all the questions, in the sense in which that word is used in 0.29, in the proceeding except assessment of damages. Nathan Pritikin published widely, in books and by other means, his opinions concerning dietary and other practices which he thought conducive to good health in humans. His surname and his opinions became s0 well known in this country that the surname was commonly used adjectivally to signify conformity with one or more of those opinions. Albertus Franciscus Antonius Hartleman 1s a director and the chief baker of the first respondent. He learnt his trade of baker 1m Holland, whence he emigrated in 1981 to Queensland, where he was employed by Lacon Investments Pty. Ltd., which carried ona business of baking and selling bread by wholesale under the name "Monty's Continental Bakery". In about February 1983 Lacon 3. - _— Investments Pty. Ltd. commenced to sell bread ina é colourless plastic wrapper on which were printed, in brown, words and numbers and a pictorial representation of the head and upper torso of a man of jovial expression and heavy jowl, dressed in baker's cap and coat. That picture and the business name, "Monty's Continental Bakery", have formed part of the printing on all the Plastic wrappers in which has been packaged bread baked by Lacon Investments Pty. Ltd. or, after the sale in December 1386 of that company's business in the State of Victoria to the First respondent, by that respondent. The wrapper which Lacon Investments Pty. Ltd. commenced to use in about February 1983 also bore the printed legend : "Made according to the Pritikin Program". In 1984 Mr. Hartleman came to Melbourne where Lacon Investments Pty. Ltd. commenced in September 1984 to bake and sell bread 1n a wrapper which was in all respects, except for the address and phone number of the bakery, identical with that which was used in Queensland. In about August 1986 there were substituted on the wrapper for the words, "Made according to the Pritikin Program", the words "Monty's Continental Bakery Pritikin Style Bread". The type face and size were substantially the same. There were other unobtrusive changes of the words on the wrapper, but the colour and general appearance of the print on the wrapper were unchanged. After the first respondent had bought from Lacon Investments Pty. Ltd. the business carried on in Victoria under the name "Monty's Continental Bakery" that wrapper was continued in use until April 1987, when a new wrapper was substituted. The new wrapper, of colourless plastic, has printing in red, white, nutmeg and dark brown on a beige background. The name "Monty's Continental Bakery" is printed in white on a red quadrilateral, at one end of which is superimposed the figure of the jovial baker. That device 1s repeated five times on the wrapper. The other principal device, also repeated five times, consists of four words arranged thus: Wholemeal Pritikin style bread The word "wholemeal" is in type about 0.5 centimetres high. In two instances the word "Pritikin" is in type about 2.75 centimetres high, except the initial capital "P" and the "k", each of which 1s about 4 centimetres high, and the letters of the words "style bread" are in type ranging in height from 0.75 centimetres to 1.25 centimetres. In the other three instances the anitial capital "P" is about 2 centimetres high and the other letters are proportionately less than in the two instances first described. In all Five instances the words are printed ina dark brown colour, the letters of the word "Pritikin" outlined in nutmeg colour. The first respondent sells in the wrapper I have described only the one kind of bread. The applicant sells a bread loaf of similar size, weight and shape, in a colourless plastic wrapper on which is printed many words and figures in black, brown and red on a pale yellow background. The word "Pritikin", printed in dark brown, is repeated 25 times on the wrapper. At one end of the wrapper the word "Pritikin" is repeated ten times in a column on one side of the wrapper, and ten times in a column on the other 5. - _— side. Underneath the word "Pritikin" is printed, in three of the remaining five instances, the words "Stone Ground Whole Wheat Bread", and in the other two instances the words "Stone Ground Whole Wheat". The applicant also sells other kinds of bread under the trade mark Pritikin. The applicant has at material times carried on business under the name "Riga", which word 15 printed three times on the wrapper I have described, in black letters less than 0.5 centimetres high within a red circle. The largest of the three "Riga" devices is in diameter 2.25 centimetres, the whole enclosed within a circular black line. The diameter of the outer circle is just under 3 centimetres. In each instance the "Riga" device is immediately above the word "Pritikin". The capital letter "P" and the letters "t" and "k" of the word "Pritikin" are, inall 25 instances, of a height between 1.00 and 1.5 centimetres; the other letters are about 1.00 centimetre high. The applicant's wrapper has been used in trade in New South Wales since December 1583. By August 1985 1t was in use in Queensland, Victoria, Tasmania and the Northern Territory. In Vactoria each of the applicant and the first respondent sells in substantial quantity the bread for which the wrapper I have described was respectively designed. Each regards the other s bread as 1n competition for the same class of purchaser and there is no reason to doubt the correctness of that view. Both brands are sold in shops and supermarkets, often stacked close together on display frames. In the case of each brand of bread the word "Pritikin" and the words and devices printed above and below 6. "Pritikin" are so disposed on the wrapper as to be easily seen when the wrapper encloses the bread. It was the submission of Mr. Yates of counsel for the first respondent that the applicant's trade mark was invalid because, not having been registrable when the application for registration was lodged on 19 November, 1981, the mark was not distinctive of the registered proprietor's goods at the commencement of this proceeding on 15 May 1987. Registration was granted of the mere word "Pritikin", not of the name "represented in a Special or particular manner", nor of a signature, so that 5.24 of the Trade Marks Act 1955 required that the word be shown to be distinctive in order to be registrable in Part A of the Register. The evidence did not disclose what material supported the application for registration. In particular, there was no evidence as to whether 1n 1981 the word was a rare surname, Mr. Yates relied, in respect of the time when application for registration was made and in respect of the time of commencement of this proceeding, on evidence suggesting that the name Pritikin was not associated with goods in class No. 30, nor with any particular kind of food, but rather with a certain regime of diet and exercise. This regime, the evidence showed, was not infrequently indicated by the expression "Pritikin lifestyle". There was evidence that the name "Pritikin" evoked advertence to a dietary regime or set of principles of which Nathan Pritikin was the propounder. The diet did not consist of one or of several particular kinds of food to the exclusion of all other kinds and it was Mr. Yates' submission that such an 7. association of ideas and word showed, or at least tended to show, that the word was not "adapted to distinguish goods .... with which Nathan Pritikin" .... "may be connected in the course of trade from goods .... in respect of which no such connexion subsists". (See Trade Marks Act 1955, s.26(1)) It is unnecessary to express a concluded opinion upon the submission ain its application to the time at which registration was sought, in 1981, before there had been any use of the trade mark. It can be said, I think, that the name "Pritikin" was so well known in this country in 1981 in connexion with certain current dietary fashions (as, for example, that whole grain cereals are to be preferred to the refined and that salt and fat content are to be minimised) that the word was at that time adapted to distinguish a bread manufactured in accordance with those fashions. However that may he, by 1987 use of the trade mark by the applicant on its bread wrapper had established a substantial connexion between the word as an indication of origin and the bread sold in the wrapper. Not only did members of the public identify the bread as sold under the name, but thought that the name signified some commercial connexion between the baker of the bread and Nathan Pritikin the well-known dietary adviser. Even those members of the public who had not read or heard Nathan Pritikin's opinions as to what were the desirable, and what the undesirable, constituents of bread (which opinions are in fact congruous with the assertions printed on the wrapper as to what the bread does, and what it does not, contain) would be likely to suppose that those assertions would meet with the approval of a fashionable dietary adviser, as Nathan Pritikin is widely 8. recongised to be, because the recipe on the wrapper gives expression to currently popular ideas of what 1s good for health. There is nothing on the wrapper or in the appearance of the bread to impede public acceptance of the idea, which the prominence of the word "Pritikin" on the wrapper suggests, that the word i5 a brand name and that Nathan Pritikin has an association with the owner of the brand name. The evidence indicated that the word "Riga" has been treated by members of the public, and by officers and servants of the applicant, as a brand name or trade mark. But the evidence did not show, as I find, that such public recognition of the latter word as there has been displaced from public consciousness the former word as distinctive or the bread. Sections 59 and 60 of the Trade Marks Act 1955 provide: "59. In legal proceedings relating to a registered trade mark (including applications under section 22), the original registration of the trade mark and the registration of any assignment or transmission of the trade mark shall be deemed to be valid unless the contrary is shown. 60. In legal proceedings relating to a_ trade mark registered in Part A of the Register (including applications under section 22) instituted after the expiration of 3 years from the date of registration, the trade mark shall not be removed from the Register or be held invalid on the ground that it was not a registrable trade mark under section 24, unless it is proved that 1t was not, at the commencement of the proceedings, distinctive of the goods or services of the registered proprietor". It has not been proved that this registered trade mark was not, at the commencement of this proceeding, distinctive of the bread put into trade by the applicant in the wrapper I have described. If that were so, Mr. Yates next submitted, there was yet no infringement of the applicant s trade mark, because the use made of the word "Pritikin" on the first respondent's latest wrapper was not use of the word asa trade mark, but use in description of the composition of the bread. The collocation of words - Wholemeal Pritikin style bread - signified, in Mr. Yates submission, that the bread enclosed in the wrapper was a wholemeal bread of which the recipe conformed to the recommendations of Nathan Pritikin, and in that collocation "Pritikin" could not be understood as used to indicate a connexion between the bread and the proprietor of the trade mark "Pritikin", 1t was submitted. The letters of the word "Pritikin" on the first respondent's wrapper are distinctly larger than the letters of any other word on the wrapper. The size of the word, the positions on the wrapper in which it is printed, the colour contrasts between the dark brown letters, the nutmeg outlining of those letters and the pale beige background draw the eye to the word "Pritikin" and tend to distract attention from the words above and below i1t. Even when those words are noticed one is inclined, as I find, to conceive the word "Pritikin", the cynosure of the wrapper, as the 10. trade mark of the bread. The words "Monty's Continental Bakery", of thin white letters less than a centimetre high in cursive script, do not attract attention. It was submitted that s.64(1)(b) of the Trade Marks Act 1955 precluded a conclusion that the first respondent's use of "Pritikin" constituted an infringement of the trade mark because it was "use in good faith by a person of a description of the character .... of his goods". I would be inclined to doubt that Nathan Pritikin ever prescribed so idiosyncratic a recipe for bread that his name was needed for description; and to doubt that the advertised recipe of the first respondent s bread so closely conformed to what Nathan Pritikin had recommended that the bread merited the description. However that may be, the prominence which the word is accorded on the wrapper, particularly in comparison with the words "style bread" which indicate descriptive use of "Pritikin", lead me to conclude that there is not in this case use of the word in good faith as a description of the character of the bread, but rather use of the word as a trade mark. (C£. F.H. Faulding & Co. Ltd. v. I.C.T. Utd. (1964) 112 C.L.R. 537 at 534-545.) My conclusion 1s that the use of the word "Pritikin" on the first respondent's wrapper 13 use of the word as a trade mark. Once that is found, the first respondent 1s seen to be infringing the applicant's trade mark, notwithstanding that the words "Monty''s Continental Bakery" may show the bread to have a commercial origin other than that of the applicant : Mark Foy's Ltd. v. Davies Coop & Co. Ltd. (1956) 95 C.L.R. 190 at 205; il. Caterpillar Loader Hire (Holdings) Pty. Ltd. v. Caterpillar Tractor Co. (1983) 48 A.L.R. 511 at 513-514. The applicants alleged that the use of the word "Pritikin" on the first respondent's bread wrapper contravened provisions of Part V of the Trade Practices Act 1974 in several ways. It was contended on the applicant's behalf that the presence of the word on the respondent's wrapper was likely to deceive members of the public into the mistaken belief that the bread within that wrapper was of the same commercial origin as the bread sold by the applicant in the wrapper I have described. This claim may conveniently be considered with the claim that by use of the word on the wrapper the first respondent passed off 1ts bread as the bread sold in the applicant s wrapper and so as the bread s0ld by the applicant. When the applicant's wrapped loaf 1s compared with the first respondent's wrapped loaf, the visual comparison makes it obvious that the two are of different commercial origin. The dissimilarities between the two wrappers are such that many members of the public who had seen the applicant's wrapped loaf would realise on first inspection of the first respondent's wrapped loaf that the latter loaf was of an origin different from that of the former, even if on that occasion there was available no example of the former with which to make a comparative examination. But, while the dissimilarities of appearance are neither few nor unobtrusive, there are similarities likely, as If 12. find, to mislead into the mistaken belief I have specified a substantial proportion of those members of the public who had before noticing one of the first respondent's wrapped loaves become accustomed to seeing the applicant's wrapped loaves. The type face, as well as the colour, in which "Pritikin" is printed on each wrapper 1s similar. It is a distinctive type face, and no other word on either wrapper is printed in that type. Nor 1s any other word on either wrapper printed in a type of so large a size as the word "Pritikin" on that wrapper. Not a few members of the public who had become accustomed to seeing the applicant's wrapped loaves before noticing one of the first respondent's loaves would, as I find, have come to think of, and to refer to, the applicant's wrapped loaves as "Pritikin" loaves, without advertence to any other word on the applicant's wrapper, such as "Riga", or to any other feature of the get-up, such as the red circle across which "Riga" is printed. Some of those persons would, as I find, take the word "Pritikin" on the first respondent's wrapper for the word by which they had come to recognise the applicant's bread. What I have said of two other competing products may also be said of these competing bread loaves: "These are articles of small price, commonly gathered into a shopping trolley for purchase after a few seconds' examination and consideration by a person unwilling to accord more than that short time to making the decision whether to buy the article...... Although the two competing products will commonly be s0 placed on display for retail sale that very many consumers will see both before choosing either, there will be consumers who, having seen the respondent''s product, will not notice the 13. applicant's product near by, and there will be occasions when only the respondent's product will be visible." (Hunters Products Pty. Ltd. v. R. & . Products Pty. Ltd. (1987) A.T.P.R. 48,563 at 48,569) The class of consumers likely to he affected by the Similarities associated with the one word on the two wrappers will comprehend a wide variety of mental alertness and of competence of memory. The class will no doubt include persons for whom "Pritakin" is nothing but a particular concatenation of eight letters and a particular sound and who have become consumers of the applicant's bread for no reason but that they like the taste of it. My finding is that a substantial number of consumers would be induced to form and to act upon the mistaken belief that the first respondent's loaf was the applicant's loaf by seeing the word "Pritikin" on the wrapper. In those parts of Australia where retail sale of the applicant's bread in the wrapper I have described preceded retail sale of the first respondent's bread in the wrapper currently used by that respondent the inducing of such a mistaken belief would be by the first respondent's misleading conduct done in contravention of s.52 of the Trade Practices Act 1974, in my opinion. Having regard to the relatively low price of these loaves, the failure to recognise differences of get-up, whereby the mistake would be avoided, cannot be characterised, [I think, as a failure by the consumer to take reasonable care of his own interests. The considerations which lead me to conclude that use, ian places where the applicant's wrapper was already in use, of the 14. word "Pritikin" on the first respondent's wrapper in the way I have described is a contravention of 5.52 of the Trade _ Practices Act 1974 lead also to the conclusion that that use of the word in those places constitutes the tort of passing off the first respondent's loaves as the applicant's loaves, 1n my opinion. It was contended further on the applicant's behalf that the use in retail trade of the first respondent's wrapper constituted representations that the bread in the wrapper -— (i) "has the endorsement or approval or licence of the Second Respondent"; (ii) "is made according to the exclusive recipes and programmes of the Second Respondent"; (iii) "1s made in accordance with the domestic and household recipes set out in the book of Dr. Nathan Pritikin entitled: 'Pritikin Program for Diet & Exercise'"; and (av) "is the same as or is not materially different from bread made by the Applicant according to the exclusive recipes and programmes made available to the Applicant as exclusive licensee." The making of each of those representations was alleged to have constituted a contravention of s.52 of the Trade Practices Act 1974. There was no evidence that any person had formed the belief that bread in the first respondent's wrapper had any endorsement or approval or licence of the respondent Pritikin Programs Inc., eo nomine; or the belief that the bread in that 15. _ wrapper was made according to any recipe or programme of the respondent Pritikin Programs Inc., eo nomine. But there was evidence by each of several witnesses that, knowing of the fame of Nathan Pritikin as a publicist of dietary and other practices conducive to good health, the witness had been led by observation ef the word "Pritikin" on the wrapper to the belief that the person who put the bread into trade in such a wrapper had the permission of Nathan Pritikin, or of a person invested with authority to control the use of Nathan Pritikin's name in trade, to use that word in connection with the bread in the wrapper. There was also evidence that the witness holding the belief I have stated believed further that the bread had been made according to a recipe which conformed with the dietary opinions of Nathan Pritikin. The formation of a belief that Nathan Pritikin or some person with authority to control commercial use of his name had given permission to use the word "Pritikin" to the trader who put the bread in the wrapper into trade cannot in my opinion be said to have been induced by any conduct done in contravention of s.52 of the Trade Practices Act 1974. Contributing to the formation of that belief there was a belief that the use of the name of a well-known person in the way Nathan Pritikin's name was used on the wrapper would be lawful only if that person, or some other person invested with the authority which that person had, were to give permission. To the formation of that erroneous belief as to the law no misleading conduct on the part of the first respondent contributed. 16. "Conduct cannot be held to fall within s.52 unless a consumer, not labouring under any mistake or imperfection of understanding of law, would be or would be Likely to be misied or deceived by that conduct. Section 52 operates in a milieu of the external legal order, 50 that the character of conduct which falls for consideration under s.52 is to he determined by reference to the external legal order as 1t exists when the conduct 1s engaged in." (Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. (1982) 149 C.L.R. 191 at 225, per Brennan J.) To assert, as the trader responsible for the wrapper may be said to assert by the collocation of words "wholemeal Pritikin style bread", that the making of the bread has been in accordance with the opinions of Nathan Pritikin as to how bread should be made, is not to assert or represent that Nathan Pritikin has given his approval to what the maker has done, or his permission to print his name on the wrapper. The belief that Nathan Pritikin, or some person invested with an authority he had, has given such an approval or such a permission 1s self-induced. It is perhaps desirable to point out that the applicant did not seek to advance under the Trade Practices Act 1974 a case that any such a belief had been formed, or was likely to he formed, by a person aware of the existence of the Australian registered trade mark "Pritikin", or by a person who had previously formed the belief that the word "Pritikin" on the applicant's bread wrapper was a trade mark, in consequence of mental processes which had been influenced by that awareness or that belief about the name on the applicant's wrapper. The representation that the first respondent's bread was 17. made in conformity with the opinions of Nathan Pritikin on the subject of bread and bread making was not shown to have been false or misleading. The evidence did "not establish that Nathan Pritikin held the opinion that bread should be made in conformity with a precise and inflexible recipe or a precise and inflexible manufacturing procedure. The evidence did not establish so substantial a departure from Nathan's Pritikin's precepts in the manufacture of the first respondent's bread as to justify a conclusion that the assertion on the wrapper was false or misleading. As to the third and fourth of the four alleged representations which I have previously quoted, there was no evidence to justify a conclusion that either was made, except in the sense that a person who mistook one of the first respondent's loaves for one of the applicant's loaves (by mistaking one wrapper for the other in consequence of the misleading similarity of the word "Pritikin" on the one to the same word on the other) could be said to have been induced to believe that the bread in the first respondent's wrapper was the same as bread made by the applicant. The alleged representations with which I have dealt were pleaded also in substantially similar terms as contraventions of s.55 and of several paragraphs of s.53 of the Trade Practices Act 1974. It as unnecessary to deal further with them in those quises. I have reached decisions of several of the questions tried. Those decisions enable a conclusion to be reached that 18. ~— oe final injunctive orders should be made in favour of the applicant. Counsel for the applicant and counsel for the first respondent joined in asking that, if that conclusion were reached, they be afforded the opportunity of making further submissions before I expressed any conclusion as to the terms of those orders. Accordingly the only order [I now make 1s that further consideration of the proceeding be adjourned to a date to be fixed. I certify that this and the 17 preceding pages are a true copy of the Reasons for Judgment herein of The Honourable Mr. Justice Jenkinson. Aj Associate Dated: 9 November, 1987 Mr. A.J.~L. Bannon Counsel for the Applicant Solicitors for the Applicant Dawson Waldron Mr. D.M. Yates Counsel for the First-named Respondent McNab & Archer Solicitors for the First-named Respondent 25, 26, 29 and 30 June 1987 and 1 July, 19387 Dates of Hearing