SO \ ' ' "JUDGMENT No. (61/67. CATCHWORDS TRADE PRACTICES ~ Alleged misleading or deceptive conduct - Alleged false representation as to the approval of goods and of a corporation - Alleged passing off - Use of name in two advertisements for a video recorder corresponding with the name of the second respondent - Whether the advertisements made any representation concerning the second respondent - Assessment of damages. Trade Practices Act 1974 ss.52, 53. NSW G.309 of 1987 10TH CANTANAE PTY LIMITED & ORS v_SHOSHANA PTY LIMITED & ANOR Wilcox, Pincus and Gummow Jd Sydney 25 November 1987 ~ IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NSW G.309 of 1987 GENERAL DIVISION ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: 10TH CANTANAE PTY LIMITED, HEATHCLIFF GEORGE TEAL and CONCORD ADVERTISING & MARKETING PTY LIMITED Appellants AND: SHOSHANA PTY LIMITED and SUE SMITH Respondents CORAM: WILCOX, PINCUS and GUMMOW JJ PLACE: SYDNEY DATE: 25 NOVEMBER 1987 MINUTES OF ORDER THE COURT ORDERS THAT: l. The appeal be allowed. 2. The orders made by Burchett J be set aside and, in lieu thereof, it be ordered that the Application be dismissed with costs. Pe a 2 wattle Notes The cross-appeal be dismissed. The respondents pay to the appellants their costs of the appeal. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. Tr te rt rr Senteeatenieteniastealedaie weet ok sii' ante nene or IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION ) ) ) No. NSW G.309 of 1987 ) ) ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: lOTH CANTANAE PTY LIMITED, HEATHCLIFF GEORGE TEAL and CONCORD ADVERTISING & MARKETING PTY LIMITED Appellants AND: SHOSHANA PTY LIMITED and SUE SMITH Respondents CORAM: WILCOX, PINCUS and GUMMOW JJ PLACE: SYDNEY DATE: 25 NOVEMBER 1987 REASONS FOR JUDGMENT WILCOX J: I have had the advantage of reading in draft form the reasons of Pincus J. I need not repeat the facts there set out. The essential complaint made by the respondents is that the appellants have, without their permission, exploited the name and identity of Ms Sue Smith, the second respondent. Ms Smith is a well-known television personality. In the United States of America such a claim would fall within that aspect of the law of privacy which is called "appropriation". This was the first of the four separate torts, now treated as aspects of privacy law, to be recognized in that country as being actionable: see Prosser and Keeton on Torts (5th ed, 1984) pp.851-854. It remains probably the most significant of those torts, although its inclusion amongst the interests protected under the rubric of "privacy" is somewhat ironic. Most American plaintiffs have not been concerned to maintain the privacy of their identity; but rather to safeguard their monopoly in the publicity value attaching to that identity. Anglo-Australian law does not, of course, recognize privacy interests, as such; although the expansion of the protection given by the law of passing off which was effected in Henderson v_ Radio Corporation Pty Limited (1960) SR (NSW) 576 goes some distance towards covering the appropriation cases. I see no reason to exclude the application of the law of passing off from a case such as the present, provided that the Court were satisfied that the advertisement published by the appellants would be read as containing a representation that Ms Smith endorsed, or was otherwise associated with, the Blaupunkt video recorder. It is true that, even under the Henderson approach, the protection offered by the law of passing off is limited to persons "engaged in business, using that expression in its widest sense to include professions and callings": "see per Evatt CJ and Myers J at p.593. However, Ms Smith was so engaged at the time of the relevant a ee ee ef water ee publications. If the advertisement could be read as representing that the second respondent was the "Sue Smith" of the advertisement, it could accurately be said that there was a representation that the advertised product was one with which she was associated. And it would not be inappropriate to grant relief. However debased the currency of endorsement may have become, in my opinion it cannot yet be said that readers of advertisements remain unaffected by the introduction into an advertisement of a respected name. The Court must assume that the advertising community has some understanding of the effect of certain types of advertisements and 1t is notable that advertisers continue to pay high fees to well known personalities in return for the right to use their names, photographs, etc in advertisements. Upon the assumption, once again, that the second respondent is the "Sue Smith" of the advertisement, I would not deny the respondents relief under ss.52 and 53 of the Trade Practices Act 1974. Upon that assumption, there would be a false representation that the second respondent had associated herself with the advertised product. Readers might infer that she endorsed the product -- at least in a vague way -- as being suitable for purchase. This would be misleading conduct by the respondents because Ms Smith had not associated herself with the Blaupunkt video recorder. She did not endorse its purchase. Similarly, in relation to s.53{c), the advertisement would suggest that the video recorder had an approval -- that of Ms Smith -- which it did not in fact have. a wT eer een The case under s.53(d) is less clear. Like Pincus J, I have difficulty in seeing that the advertisement could say anything about Ms Smith's approval of any corporation. I see no reason to so limit the application of ss.52 and 53 as to exclude "appropriation" cases from their ambit. Whilst there continues to be room for the view that consumers are sometimes influenced in their choices of goods and services because of a perceived association between those goods and services and a respected identity, it 1s salutory for the law to guard against their being misled as to the existence of such an association. Although the Trade Practices Act, unlike the American law of privacy, approaches the matter from the point of view of the consumer, rather than that of the person whose identity is appropriated, it is no disadvantage that the application to such cases of ss.52 and 53 of that Act incidentally provides some protection against the unauthorized appropriation, for commercial purposes, of the reputations of other people. However, there remains the critical question whether it can be said that the subject advertisement made any statement about the second respondent. I agree with what Pincus J has written on this topic. But, as it is a matter upon which I find myself in respectful disagreement with the view of the learned trial judge, I will elaborate. oe SDN TE ee rete er ee tre : -b anny aoe eee a ew oe ee ee : chao. - -f STR TYR eo rreeereee Whether one approaches this case under the Trade Practices Act or under the law relating to passing off -- indeed, even if 1t were considered as an "appropriation" case -- the respondents must establish that a significant segment of the readers of the advertisement would be likely to associate Ms Smith with the "Sue Smith" of the advertisement. The relevant facts, as found by the trial judge, were that the second respondent was well known to television audiences, under the name "Sue Smith", but that she did not look like the lady pictured, in the advertisement, as being in control of the video recorder. The person pictured was clearly the person referred to, in the advertisement, as "Sue Smith". Although Ms Smith was well known to the public, the trial judge accepted evidence that she was in fact not known to those who compiled this advertisement and that the use by them of her name was merely co-incidental. However, notwithstanding these findings and in the passage quoted by Pincus J, his Honour held that the respondents had established their case. With respect to the trial judge, I cannot accept his process of reasoning. It seems to me to beg the critical question. The reasoning commences by assuming what is to be demonstrated: that there existed at the date of the advertisement a body of readers who would associate the second respondent with the "Sue Smith" of the advertisement. The argument recognizes that the person depicted in the advertisements differs 1n appearance from the second respondent but, having made the first critical assumption, 1t ni yreenes Pee er ee ee copes with the difference in appearance by further assuming the existence of some readers, who knew the second respondent and who had already associated her in their minds with the Sue Smith of the advertisement, but who were confused about, or forgetful of, her appearance. I cannot accept this latter assumption. Whatever may be the position regarding those who are well known by name and reputation but not by appearance, it is difficult to divorce the reputation of a television personality from his or her appearance. For the average viewer, the television personality exists only on the screen; or perhaps in magazine or newspaper articles, where photographs are commonly inserted. The effect of the assumption is to confer upon Ms Smith a monopoly of the use of the name "Sue Smith", at least in the absence of an explicit disavowal of any connection with her or of material identifying the "Sue Smith" of the advertisement as someone else, and thus implicitly excluding her. Although, as I have indicated, I would not be sorry to see ss.52 and 53 of the Trade Practices Act, and the law of passing off, used in appropriate cases in such a manner as to protect well known people from the unauthorized exploitation of their identities, it is another matter to confer upon them an exclusive right to use a particular name. The critical question must always be whether the advertisement, having regard to all relevant aspects, is likely to result in members of the public being misled. In some cases that likelihood may be obvious. For example, in the case of an advertisement which unequivocally identifies a er Siediitees shee Siac foramen sone ot particular person, as by including a photograph or other information peculiar to that person. In other cases, the likelihood of readers being misled may arise out of the context 1n which the name is used. The example given by Stephen J in Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Pty Limited (1978) 140 CLR 216 at p.227 of the unknown singer who shares the name of a famous prima donna comes to mind; the point being that the name 1s used in a context, an announcement of an opera, with which readers would readily associate the prima donna. So if, for example, in an advertisement for tennis racquets, an advertiser were to use the name of a Wimbledon champion, even without any photograph or other particular identification, it would be reasonable for a court to hold that readers might be misled into thinking that the advertiser was referring to the Wimbledon champion. And there would be nothing harsh about this result because it is inconceivable that a vendor of tennis equipment would not have known of the existence of that player when framing the advertisement. A third way in which the likelihood of deception may be demonstrated is by showing that the relevant name is so unusual that readers, or at least a significant proportion of them, would reason that there were unlikely to be two persons of that name and would make a connection accordingly. It is easy to apply this approach in the case of "concocted" names: see the comment made by Lord Simonds in Office Cleaning Services Limited v Westminster Window and General Cleaners Limited (1946) 63 RPC 39 at p.42. It is much more difficult ae were be feng spt ae to do so in a case where the name is an ordinary descriptive name -- cf Hornsby Building Information Centre -- or uses a common first name and surname. The courts must assume that people would realize that Australia is likely to contain more than one John Brown or Alan Jones, so that the use of the name, without more, is not necessarily a reference, respectively, to the Minister for the Arts, Sport, the Environment, Tourism and Territories or to the racing car driver; although it may be taken as such if there is other identifying material or an appropriate context. In the present case, there was nothing more than the bare name. The advertisement contained no information pointing unequivocally to Ms Smith. There was no relevant context. The two names "Sue" and "Smith" are common enough, whether considered separately or as a combination. The only additional material was a picture of the "Sue Smith" referred to in the advertisement. But, because it was a picture of a person dissimilar in appearance to the second respondent, it pointed the other way. It should be noted that, although such evidence would not have been conclusive, the respondents did not call any evidence to establish that somebody had in fact been misled into thinking that the "sue Smith" of the advertisement was the second respondent. The appropriate inference is that the second respondents did not have available as witnesses people who could depose to having been misled: see Jones v_ Dunkel (1959) 101 CLR 298. That inference is particularly significant in a case where, as ner er +) oye > here, it was proved that some other people commented upon the advertisement to Ms Smith. Those people apparently saw the advertisement but were not misled. I would uphold the appeal upon the simple basis that the respondents failed to make out an essential ingredient of their case, upon each of the grounds advanced, namely that readers would be likely to read the advertisement as containing a reference to the second respondent. Under those circumstances it 1s unnecessary for me to deal with the respondent's cross-appeal, by which they complain of the adequacy of the damages awarded by the trial judge. I agree with the orders proposed by Pincus J. I certify this and the eight (8) preceding pages to be a true copy of the Reasons for Judgment of his Honour Justice Wilcox. Associate: (Feorne, foto! Date: 25 November 1987 Counsel for the Appellants: Mr D K Catterns Solicitors for the Appellants: Moore & Bevins Counsel for the Respondents: Mr J J Garnsey with Miss M Wingert Solicitors for the Respondents: Gillis Delaney Date(s) of hearing: 13 October 1987 IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) N.S.W. G309 of 1987 GENERAL DIVISTON ) ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: i0OTH CANTANAE PTY. LIMITED HEATHCLIFF GEORGE TEAL CONCORD ADVERTISING & MARKETING PTY. LIMITED Appellants AND: SHOSHANA PTY. LIMITED SUE SMITH Respondents CORAM: WILCOX, PINCUS & GUMMOW JJ. DATE: 25 NOVEMBER 1987 REASONS FOR JUDGMENT PINCUS J.: The appellants, who used the name "Sue Smith" in some advertisements in 1983, appeal against an award of damages made against them for so doing. The respondents are a lady called Sue Smith, who has appeared often on television, and her company. The name was used in advertisements for Blaupunkt video recorders. The learned primary judge held that the advertisements were unlawful under the general law related to passing-off, as well as under s.52, s.53(c) and s.53(d) of the Trade Practices Act 1974. To put the matter very generally, his Honour was of the view that the advertisements impermissibly suggested a connection between the second respondent and the video recorders. His Honour er pa re - oe? e ee Sent ee ro rr ir caer eee een eg ob SL kt . Dy we' = pene ewe srg cage en ee wee described the type of connection in various ways. He mentioned, in the opening sentence of his judgment, modern techniques "by which a product is associated with a desirable personality, in whose reflected light it will appear more pleasing". He referred elsewhere to the fact that the good impression about the videos conveyed by the advertisement "would be likely to be enhanced by an association of it with Sue Smith", and, as I read his Honour's reasons, found there was passing off on the basis of a representation that the second respondent was "in some way associated" with the business of those who wished to sell the recorders. Apart from these findings that the advertisements suggested a general association between the second respondent's name and the product, the learned primary judge made more specific findings. His Honour held that readers of a certain sort might well be led to believe that Sue Smith was endorsing the Blaupunkt video. He referred to "Sue Smith's apparent endorsement" of the brand of recorder and, most strongly, found that there was a representation "that the Blaupunkt video had the sponsorship and approval of Sue Smith which it did not have, and that the first-named respondent had her sponsorship and approval which it did not have (see s.53(c) and (d)". The "first-named respondent" mentioned by the learned primary judge was the distributor of the videos, now one of the appellants. are peers ane Y , wrocceae ss oes tere Section 52, of course, proscribes engaging "in conduct that is misleading or deceptive or is likely to mislead or deceive". Section 53{c) and s.53(d), with the introductory part of the section, are as follows: "A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the suply or use of goods or services - (c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have; (d) represent that the corporation has a sponsorship, approval or affiliation it does not have". It will be noted that there is a finding that the distributor of the videos, as well as the machines themselves, was represented to have the sponsorship and approval of the second respondent. The advertisements the subject of these findings depicted a young woman in bed holding a cat and watching the screen of a television set, on which appeared a picture of another woman apparently grimacing or screaming. Written across each advertisement in large print appeared the words "Sue Smith just took total control of her video recorder". The smaller print of the advertisement had two versions, but each conveyed information along the same lines, namely that the Blaupunkt video recorder enabled the user, called "Sue" in the text, easily to control the pe er ee ree | oy TE we Ly sere pean what functions of the recorder itself and the T.V. to which it was attached. "Sue" and "Smith" are of course both very common names, but the respondents' contention is based on the view that their use in combination, in circumstances of this sort, is proscribed both by the Trade Practices Act and by the general law, with the qualification that the illegality disappears if the respondents agree to the use. That qualification, to my mind, points up an oddity of the result arrived at below. Although the award of damages is based on the view that it was untruthfully asserted, among other things, that the second respondent sponsored and approved the machine and its vendor, such an assertion might have had at best a tenuous claim to truth even if the second respondent had agreed to the use of the name and been paid for it. Her real complaint, in a commercial sense, is not the falsity of the advertisement, but that the name was used other than pursuant to an "endorsement" agreement involving a fee. Passing-0Off It is desirable to say something of the applicable principles, before analysing the learned primary judge's findings further. His Honour, as appears from what is said above, accepted a wider view of the notion of passing-off than that which had prevailed in this country before the decision in Henderson v. Radio Corporation Pty. Ltd. (1960) S.R.(N.S.W.) 576. His Honour Vero at eee we any wot eee oe ter tee eae myer vege ee quoted at p.16 and apparently accepted at p.18 of his reasons Mr. Ricketson's statement that "any representation that the plaintiff is in some way associated with the defendant's business, whether by way of partnership, sponsorship or licensing, will suffice." In Moorgate Tobacco Co. Limited v. Philip Morris Limited (1984) 156 C.L.R. 414 at p.445, the High Court, in referring to Henderson's case, did not go quite so far. Deane J., with whom the other members of the Court agreed, referred to the "... adaptation of the traditional doctrine of passing off to meet new circumstances involving the deceptive or confusing use of names, descriptive terms or other indicia to persuade purchasers or customers to believe that goods or services have an association, quality or endorsement which helongs or would belong to goods or services of, or associated with, another or others". It should be noted that the apparent approval, in this passage, of the expansion of the tort of passing-off does not go beyond instances in which people are led to believe that certain goods or services have a characteristic belonging to other goods or services; the question whether the law of passing-off gives protection to the alleged proprietary right, "in gross", in the use of a well-known name, is left open. In the United States it appears there has been a ready acceptance of the idea that a well-known person (alive or dead) is entitled to the law's protection in the activity of selling others the right to use his name in association with goods or services, whether or not on the basis that the name properly belongs to any particular goods or services; protection is accorded to the bare name. But there has been some recent resistance to expansion of the proprietary names —-— —-a- o- a ST Re ee , Ts business: American Footware Corporation v. General Footware Company Limited 609 F. 2d. 655, especially at 662 (the "bionic" case). That decision evinces a reluctance to treat someone as the owner of an English word, but also shows a disinclination to expand any further the scope of American law's protection of the "image-making" business. Names which are well-known are, it is plain, now being applied to goods with which they have no real connection, for no reason other tnan that mentioned by his Honour in the opening sentence of his judgment, referred to above. Much the same idea is expressed by Dixon J. in Radio Corporation Pty. Ltd. v. Disney (1937) 57 C.L.R. 448 at 457: "I find it hard to believe that the use of the words on or in connection with a radio receiving set would produce any other impression than in the case of most of the other almost innumerable classes of articles to which the name or the representation of Mickey Mouse has been applied. That impression does not, I think, primarily relate to the origin, selection or treatment of the goods. The reason for using the names is to attract the attention of members of a public that has found pleasure and amusement in the grotesque forms and absurd antics of Disney's creatures, and at the same time to give to the goods a name or means of description at once familiar and pleasing or interesting to the possible buyer. No doubt this means that the trader makes use of elements which belong to the reputation and fame of Disney's creations and it may be that in some vague way the buyer supposes that Disney must have sanctioned it." It appears to me a little artificial to assume that the ordinary reader is so gullible as to think, these days, that (for example) the application of the name of a well known French clothing manufacturer to a great variety of goods necessarily implies anything about the "origin, selection or treatment of the goods" or, to quote further from Dixon J., that it implies ery ct ror anything other than that the owner of the name "must have sanctioned it". As a sort of retaliation against the clothing manufacturers, it appears that names of soft-drink makers are being sold to be used on clothes ("The Economist", 24 October 1987, p.96). It cannot be pretended that the proliferation of this sort of practice has failed to debase the currency. However faint the illusion might have been, 50 years ago, that the application of the name "Mickey Mouse" toa radio really said anything about the goods other than that they had that name on them, similar usages today must convey an even more nebulous message about the goods. [It should not be too readily accepted that the mere mention of a name in an advertisement necessarily connotes that the goods advertised have any characteristic - for example, that they have been approved, or even examined, by the person named. In commercial parlance, it may be that a racing-car driver "endorses" all the products referred to on his car and clothing, but he is not generally thought to be thereby expressing a view about them. Putting this more shortly, passing-off is not necessarily constituted by the mere authorised use of someone's name or picture or the name or picture of a well-known fictitious character, in an advertisement. The Findings of the Primary Judge It was held below that the second respondent is very widely known in New South Wales and elsewhere in Australia as a prominent figure on national television. That finding was not .t mo on AR 7 . sy wee iced TS oot nae coer SE a ory challenged, but it should also be noted that it was accepted that the advertising agency personnel who devised the advertisement were unaware of her existence. An important question in the resolution of the issues arising on appeal is whether the women depicted in the advertisement look like the second respondent. A portfolio of a substantial number of photographs of the respondent, taken over a period of years, is available, and was available to the learned primary judge. His Honour said: "Neither of the two females pictured appears actually to be the second applicant, though both are brunettes as is Sue Smith. One of the theatrical agent witnesses gave the following answer in cross-examination: 'Well I thought the lady on the left holding the cat may not be Sue Smith; the lady on the television could be Sue Smith.' The lady holding a cat appears younger than Sue Smith, but both the pictured ladies seem to me to bear some resemblance to her such as might lead a casual reader of the advertisement, or a person not very familiar with Sue Smith's appearance but having a general recollection of it, to suppose that Sue Smith is pictured. As the answer I have quoted indicates, the performer pictured on the television screen could be Miss Smith, even to the eye of a more attentive reader with a fairly good recollection of her appearance, but if such a person read the small print as well as the caption with attention, he would see that the advertisement attributes the name Sue Smith to the other female pictured." I cannot, with respect, agree with his Honours analysis. The fact that the "performer pictured on the television screen could be Miss Smith" could not assist his Honour Le gees : towards finding that the advertisement was misleading. That is so, because even the most casual reader of the advertisement must have noted that its theme, apparent both in the heading and in the text, is that Sue Smith has good control of the recorder. Obviously, the person having the control of the recorder cannot be the one depicted on the television screen and must be the one watching the screen, remote control device at hand. I. cannot agree that it would be necessary, in order for a reader to reach such a conclusion, that he or she be attentive and read the small print. One should not postulate a magazine reader who examines . the whole advertisement closely, but one must at least assume a yeader capable of assimilating the simple message in the heading. In consequence, if the finding that the advertisements were misleading is to be upheld, that must be done on the hasis that the viewer depicted in the advertisement is the "Sue Smith" spoken of in the heading as just having taken total control of her video recorder, who is in turn to be identified with the second respondent. The point just made is of some importance in the determination of the appeal. Whereas the viewer shown in the advertisement plainly is not the second respondent, it is more difficult to be dogmatic as to the degree of resemblance between the face shown on the screen and the second respondent, because that face is distorted. It does not appear to me that there was anything misleading about use of the pictured viewer in the advertisement, as she looks quite unlike the second respondent. In my respectful opinion, this absence of resemblance To tr re em a a oe - -t eo: we Serpe + 10. substantially decreases the risk that anyone would be misled. It cannot be enough, to sustain the award made against the appellants, merely to hold that it is conceivable that a person who had forgotten what the second respondent looks like might mistake the viewer depicted for her. If the judgment is to be upheld, that must be on the basis that the "Sue Smith" said in the heading to be in control of the recorder really might be thought to be the second respondent, although the person depicted as in control of the recorder does not resemble the second respondent. Bases of Liability In my respectful opinion, the finding below that the advertisements represented that the distributor of the machines was itself sponsored or approved by the second respondent cannot stand. It is true that the distributor's name appears (in quite small print) at the foot of each advertisement, as do the names of various vendors of the Blaupunkt machines, but that surely cannot be enough to suggest to any rational person that the lady who had posed as the controller has necessarily ever heard of any of those businesses, let alone sponsored or approved them. Further, the finding that the advertisements represented that the particular brand of video had the "sponsorship" of the second respondent is not able to be supported. Sponsorship, in a commercial context, conveys that a commercial or other organisation or person stands behind and, perhaps, wholly or partly finances some activity - for example, a sporting event or a television show. No one would Soames rns a sree eee nen ' . ot ' il. think the model depicted to be a sponsor of the Blaupunkt videos. As to s.53, then, the question becomes whether the advertisements represented that the second respondent approved the Blaupunkt video. The learned primary judge has found such a representation was made and has also referred to the respondents' "apparent endorsement" of the brand. The case is one in which this Court is in substantially as good a position as the learned primary judge, in determining that point. The onus is upon the appellants to show that the finding was wrong and the Court must pay due respect to his Honour's view. However, as I have attempted to explain, I cannot agree with the learned primary judge's approach to the problem, insofar as it was based upon the opinion that one might postulate a reader who failed to absorb the intimation in the heading that the person in control of the video (not the one on the screen) was Sue Smith, nor do I agree with the suggestion that the person in control resembles the second respondent, Apart from those considerations, there is, in my opinion, room for doubt as to whether the advertisement conveys a representation that any real person has approved the machine. The message of the advertisement, both in the heading and in the text, is that the machine is such as to be able to be controlled easily and effectively. No one, in my opinion, would be very likely to take it as intended to tell him or her that the lady who has posed for the advertisement endorses the machine; but it is unnecessary to reach a conclusion on that separate point, for I am of the view ete ewes eee 12. , that, in the circumstances mentioned, it should not have been held that the advertisement represented that the machine had the approval of the second respondent. As to s.52(1), the appellants may have a slightly more difficult task, because under that provision it is enough to show that the advertisements are misleading or deceptive, or likely to mislead or deceive in any respect; the respondents are not confined to the particular sorts of representations mentioned in s.53, Nevertheless, it must be a rare case in which, an allegation of falsely representing that goods have the approval of a particular person being rejected, misleading conduct is found under s.52 on the basis that there is merely "some likely association" between the name and the goods, to use the expression adopted by Ellicott J. in Nostac Enterprises Pty. Ltd. v. New Concept Import Services Pty. Ltd. (1981) 3 A.T.P.R. 43,133 at 43,137. I incline to the view that the legislative intention is that allegations of this sort are to be tested under 5.53. However that may be, it should not in my opinion be held that the use of the name "Sue Smith" was in the circumstances misleading or deceptive, or likely to mislead or deceive. Since the doctrine of Taco Company of Australia Inc. v. Taco Bell Pty. Ltd. (1982) 42 A.L.R. 177 that it is necessary to show a misrepresentation (see p.202) has been accepted, it may be that the task of an applicant for a relief under s.52 of the Trade Practices Act has become harder than it would have otherwise have been. If one asks if any misrepresentation relevant to the second respondent is made by these advertisements, the most which can be said in favour of the respondents is that some readers might suspect that, although the 13. model described as "Sue Smith" is plainly not the second respondent, she permitted her name to he used in the advertisements. That is not enough, in my opinion, to uphold the view that the advertisements are made unlawful by s.52. For similar reasons, it appears to me that the allegation based on passing off must fail. I would allow the appeal with costs and, in lieu of the order made below, dismiss the application with costs. There is a cross-appeal on damages, which becomes irrelevant and should be dismissed. t certify that this and the J2 preceding £3¢8s are a true copy of the reasons for judgment herein of His Honcur Ate Justice Pincus Associats Dated 2s* November , leas. we ne ee i egy ee i i ee tere me eee wes IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G309 of 1987 ) GENERAL DIVISION } On Appeal from a single Judge of the Federal Court of Australia , BETWEEN: 10TH CANTANAE PTY. LTD. HEATHCLIFF GEORGE TEAL CONCORD ADVERTISING AND MARKETING PTY. LTD. Appellants AND: SHOSHANA PTY. LTD. SUE SMITH Respondents CORAM: WILCOX, PINCUS, GUMMOW JJ DATE: Wednesday 25 November 1987 PLACE: SYDNEY REASONS FOR JUDGMENT GuMMOW_J Introduction This is an appeal from a decision of a Judge of this Court in which judgment was given in favour of the applicants (the present respondents) against each of the respondents (the present appellants) for $15,000. The liability of the appellants arose from activities which his Honour found constituted both passing-off and contraventions of s.52 and s.53 (c) and (d) of the Trade Practices Act 1974 ("the TP twee tee wee eee 2. Act"). The award of damages for contraventions of s.52 and s.53 thus was based on s.82 of the TP Act; the liability for damages in respect of passing-off arose from the general law as applied in the accrued jurisdiction of the Court. No question of injunctive relief arose at the trial because the acts complained of occurred in 1983 and there was no threat of repetition. On the appeal, the appellants submitted that the trial judge was in error in finding that the respondents had made out their case for contraventions of ss.52 and 53 and for passing-off. There was a cross~appeal by the respondents in which they submitted that the award of damages was inadequate. In 1983 the first appellant carried on business under the name "VESA Wholesale" as distributor of equipment described as the front-loading Blaupunkt 322 video recorder, the Blaupunkt "Madagascar" stereo television set, together with a Blaupunkt remote control device said to give total remote control of both the video recorder and television set. The second appellant was an officer of the first appellant and he was held liable pursuant to s.75B of the TP Act as a "person involved in the contravention" for the purposes of §.82. The third appellant was an advertising agent who, between 5 May 1983 and 30 June 1983, inserted a total of seven advertisements in four publications. The advertisements were composed by a Mr Trinidad James at the request of a director of the third appellant. ee en eee 4 , - >" See eee weet oven cee ears? Ca mane — STE Tg or nn es ger -- oo ee 3. The advertisements appeared in the 10 May and 14 June 1983 issues of "The Bulletin", in the May and June issues of "Video Age", in the May issue of "Video and Communication" and in the issues of "Australian Business" of 5 May and 30 June. In each case the advertisement was a prominent one, extending horizontally across two pages of the journal and taking up about half of each of those pages. Across the top of each advertisement in heavy bold print were the words:- "Sue Smith just took total control of her video recorder." Beneath the headline appeared the picture of a woman sitting up in bed nursing a cat and watching a television set equipped with a video recorder. Clase to the hand of the viewer, on the bedspread, was a remote control device. on the television screen appeared a picture of the head and shoulders of a woman with an expression of some distress or agitation. Both women depicted in the advertisements were brunettes. At the bottom right hand corner of the advertisement there appeared in heavy print:- "BLAUPUNKT 322 by BOSCH Total Control Video" The word "BLAUPUNKT" appears in the largest and heaviest print. At the bottom of the advertisement in ordinary print appeared what the advertising industry witnesses described as "the copy" or "the body copy". This varied between particular advertisements in immaterial respects. One example of the copy was as follows: The movie is spine-chilling. The video recorder is the front loading Blaupunkt 322. Even while frozen with fright, Sue can turn the movie on and off, play it in slow motion, even watch it backwards. She can see the movie one frame at a time in crystal detail because the 322's multihead system gives the best freeze frame on the market. The secret is Blaupunkt's 24 function remote control. It gives Sue total control of the 322 video recorder and her Blaupunkt 'Madagascar' stereo TV - the only remote control that controls them both. And the 14-day/4 program timer means Sue also has control of what she wants to watch for up to two weeks ahead. So while Sue may always be a slave to her emotions she'll never again be a slave to her Tv." The words "Sue Smith just took total control of her video recorder" appear as a headline. In the language of one of the witnesses with experience in the advertising industry, "it was the headline which was the grab". From the headline the eye moves to "Blaupunkt" as the brand name of the video recorder. It is these features which would strike the eye of the reader and fix in the recollection (cf. Bayer Pharma Pty. Ltd. v Farbenfabriken Bayer AG (1960) 120 CLR 285 at 293). wet qr epee os = ep Ee er eee ere or ee 5. The first respondent is a company which carries on the business of providing the services of the secand respondent to persons who wish to engage her. The second respondent is a married woman who has used the name Sue Smith professionally since about 1964. She was born in 1942, In May 1983 Sue Smith was an employee under contract to Channel 10, Sydney, the Licensee of which was United Telecasters Sydney Limited. Her husband was then the Programme Director for that licensee. He told Sue Smith that the Managing Director, Mr George Brown, had just drawn to his attention an advertisement in the current edition of "The video Age" and was anxious to know what Sue Smith knew about the advertisement. She said she knew nothing about it and forthwith, on the same day, consulted a solicitor employed by United Telecasters Sydney Limited. The solicitor then composed for Miss Smith's signature, a letter to the first appellant. The letter was dated 30 May 1983 and read as follows:- I have been involved in the television industry in NSW and throughout the rest of Australia for over 10 years. During that time, I think it is fair to say, that I have become well known to others in the television industry, and to the general public. As a well known television personality, I am from time to time sought after for advertising endorsements. In the current edition of 'The Video Age', on pages 32 & 33, an advertisement for *Blaupunkt by Bosch' appears under the heading 'Sue Smith just took total control of her video' ('the advertisement'). I did not give permission to any person for the use of my name either in this advertisement, or in any other advertisement for your 6. company. I am extremely distressed at this unauthorised use of my name. Your company's conduct in using my name without consent constitutes misleading and deceptive conduct within section 52 of the Trade Practices Act 1974 and a false representation within section 53 (c) and (d) of that Act. In addition, it constitues passing-off of the video cassette recorder sold by your company as being approved or endorsed by me, and similarly passing off your company as having my endorsement... The letter went on to require the provision of written undertakings to cease the conduct complained of and the payment of damages. No reply was received and Sue Smith then consulted her own solicitor, Mr Delaney. Mr Abbott, a director of the third appellant, heard from the first appellant, the addressee of the letter, that a complaint had been made concerning the advertisements. He sought legal advice. On 14 June 1983, Nr Delaney spoke with with Mr Teal, the second appellant and an officer of the first appellant company. On 15 June, Mr Delaney was telephoned by Mr Slattery of the third appellant. Mr Delaney made it plain that he wanted to know the particulars of the advertisements to date and the future advertising schedules. Mr Slattery said he would consider the matter and seek some advice. On 14 June Mr Delaney had written to the first appellant seeking an undertaking to cease further publication of the advertisement in question. On 16 June Mr Delaney was telephoned by Mr Fitzpatrick, a solicitor from Messrs —— — ae HH eee ee es ewe ee eee gee ee Re ee eee ene A my 7 ; 7. Sewell King & Hedstrom who indicated that his firm was acting for the third appellant. Mr Delaney asked for particulars of the advertisements that had been placed to date and what advertisements were proposed to be placed in the future. The solicitor said: "I do not think they will give that to you." However, on the next day the solicitor did supply Mr Delaney with four dates for future advertisements from 30 June to 12 July. The solicitor also said that his client was "contemplating" changing the advertisement although it would cost some money to do it. Eventually, on 29 June Mr Pitzpatrick, the solicitor in question, telephoned Mr Delaney and said that the advertisements had been withdrawn and changed for the future but that his client was going ahead with the publications that had been "scheduled". On 1 July 1983 Mr Delaney received a letter dated 29 June 1983 from Messrs Sewell King & Hedstrom confirming that that firm acted for the third appellant and denying that it could be conceived by the public that the advertisement referred to Mr Delaney's client. Breach of the TP Act was denied. The letter concluded:- Having been made aware of your client's concern, our client has changed the advertisement, however, it will appear in two publications which have already been printed. The evidence includes a copy of pages 8 and 9 of the issue of "The Bulletin" dated July 12 1983. Those pages contain an advertisement in which the headline reads: "Sarah meee eer + mee ree ee woe 8. Smith just took total control of her video recorder". In very small print at the bottom of the advertisement appear the words: "The personality depicted in this advertisement is fictitious and any resemblance to actual persons is accidental". Mr Abbott gave evidence that "normally" an advertisement which already had been placed in a magazine or other publication could not be "cancelled" on less than four weeks' notice. There was no evidence as to what period was necessary to effect a modification in the text of an advertisement already placed for publication. In any event, counsel for the appellants accepted that after the initial complaint in Sue Smith's letter of 30 May 1983, the advertisement of which she complained certainly was published in the issues of "Australian Business" for 30 June 1983 and "The Bulletin" of 14 June 1983 and possibly also in the issue of "Video Age" for June 1983. There was thus ample evidence to support his Honour's finding, which in any event was not challenged, that in the present case, on several occasions, the advertisement was published after notice and after no reply had been vouchsafed to the original complaint by Miss Smith. This is a finding of some importance to which I will return when considering the claim based on passing-off. It was also found and, indeed, it was not contested at the trial that the advertising agents, the third appellant and Mr James had devised the advertisement in ignorance of the second respondent, Sue Smith. crest: ra Since about 1970 Sue Smith has appeared as an "interviewer and presenter" for various news and current affairs programmes, particularly on television, although, in 1978, she had broadcast a programme over Radio 2UE Sydney between 9 am and 12 noon on weekdays. In January 1982 she had, as I have indicated, joined the Channel 10 Network. There she presented the weekend news, the programme "Eyewitness News at 6" and, in addition, she had from time to time co-hosted the programme "Good Morning Australia". She was also a member of the panel on the afternoon programme "Beauty and the Beast". The programmes "Good Morning Australia" and "Beauty and the Beast" were telecast over the Channel 10 Network throughout rural and metropolitan areas in New South Wales, Queensland, South Australia and Victoria. Previously, she had been the first woman to compere the well known Mike Walsh Show which was telecast nationally throughout Australia and she was also the first woman to appear as "front person" for the leading public affairs programme "A Current Affair". This also was telecast nationally. In 1977 she had won a Logie award for her performance as "front person" in "A Current Affair"; in 1978 she had won a Logie award as "Most Popular Female Personality"; and in 1983 she shared with Mr. Ross Symonds the award of the Association for Better Hearing. In consequence, like other television personalities, Sue Smith had become the subject of comment, news items and ee eres + potters cn 10. articles in the press. The evidence included more than ninety examples of such items in the period 1970-1983. These items included the discussion of Sue Smith's personal life with photographs of her in various domestic settings, on at least one occasion, she was shown on a bed, if not in a bed, as in the advertisement with which this case is concerned. It is also apparent from these materials that Sue Smith is a brunette and that her hairstyle varied from time to time in the period before 1983. Mr Abbott, the Managing Director of the third appellant agreed in his oral evidence that Sue Smith had had extensive exposure in the media for many years and that she had a name which "had a commercial value to advertisers" and that "the value of that name was not confined to advertising in New South Wales, but extended to advertising around Australia". Mr Abbott had worked in the advertising industry since 1970 and had experience in obtaining the services of well known personalities to appear in advertisements. His Honour found that in 1983 the name "Sue Smith" was extremely well known throughout Australia as the name of a popular television personality, particularly admired for the clarity of her presentation of information. His Honour said that he was assisted in understanding the evidence as to that last mentioned attribute by his having heard and observed her in the witness box. eres 8 yee gee -ft li. His Honour also found on the evidence, a finding not challenged, that persons in the position of Sue Smith were, "according to modern advertising practice, in significant demand for their endorsement of various products commonly sold by character merchandising", and that Miss Smith stood high in the category of persons suitable for this kind of work. The products sold by character merchandising, his Honour found, included television and video equipment. His Honour also found:-— A feature of the technique of character merchandising . . . is that the advertiser uses the public image of the personality concerned to develop in the minds of consumers an identification of the product with that personality. As a result, Sue Smith's endorsement of a particular product is likely in practice to preclude her obtaining a contract to endorse a competing product. Part of the value to the television network which telecast her current affairs and news programmes was an appearance of objectivity. Until 9 January 1983 she was bound by a contractual term which guaranteed the performance by the first respondent of its agreement to ensure that she. would not "appear or perform in or lend her name to any commercial advertisement . . . without the consent of the Company's Director of News which such consent shall not be unreasonably withheld". These are important findings of fact, for they provide the setting in which the conduct complained of 1s to be 12. assessed. In Radio Corporation Pty. Ltd. v Disney (1937) 57 CLR 448 at 459, Dixon J, obiter, said that it was clear that Walt Disney could obtain no injunction for the protection of such an interest as that arising from "the mere celebrity of reputation of Disney's productions" semble because the only adverse effect on the commercial operation of Disney would be refusal to pay licence fees. Cases concerning later fanciful fictional characters such as "The Muppets", indicate that times have changed and that, in Australia, the law adjusted itself accordingly; e.g. Childrens' Television Workshop Inc. v Woolworths (NSW) Ltd. [1981] 1 NSWLR 273; see also Henderson v Radio Corporation Pty. Ltd. (1960) 60 SR (NSW) 576 at 602, Nostac Enterprises Pty. Ltd. v New Concept Import Services Pty. Ltd. [1981] ATPR 43,133. Tolley v J.S. Fry & Sons Ltd. [1931] AC 333 might not be decided the same way in Australia today. The Impact of the Advertisements As I have indicated, the case for the respondents against the appellants was based both upon contraventions of ss.52 and 53 of the TP Act and passing-off. A central element in the consideration of each of these causes of action was the impact or likely impact of the advertisements upon the readers thereof. His Honour concluded that the advertisement would convey at a glance a good impression about the Blaupunkt video equipment and that that impression would be likely to be enhanced by an association of it with Sue Smith. The striking feature in the advertisement, "the grab" as I have mentioned, was the headline "Sue Smith just took a7 men ee ee ea ee Reaper eee 13. total control of her video recorder". Sue Smith and each of the women depicted in the advertisement were brunettes. In his address before us, counsel for the appellants conceded that both the contraventions of s.52 and passing-off would be made out if it could fairly be said of a substantial number of readers that they would take the advertisements as indicating that Sue Smith had endorsed the products in question. However, both at first instance and before us, much attention was devoted to what was said to he dissimilarities in appearance between Sue Smith and the two women shown in the advertisement. The dissimilarities were then relied upon for the conclusion that the reader would reason that the Sue Smith referred to in the headline was not the well known Sue Smith of television fame but some other person of no fame or, indeed, "Everywoman". His Honour dealt with the subject as follows:- The lady holding a-cat appears younger than Sue Smith, but both the pictured ladies seem to me to bear some resemblance to her as might lead a casual reader of the advertisement, or a person not very familiar with Sue Smith's appearance but having a general recollection of it, to suppose that Sue Smith is pictured. .. .[{TJhe performer pictured on the television screen could be Miss Smith, even to the eye of a more attentive reader with a fairly good recollection of her appearance, but if such a person read the small print as well as the caption with attention, he would see that the advertisement attributes the name Sue Smith to the other female pictured fie the woman holding the cat]. tee ot eer 14, I agree with this approach to the matter. In particular, it would be wrong, in my view, to place too much emphasis on the alleged dissimilarities in appearance in evaluating the likely overall effect of the advertisement upon readers. It is, as his Honour said, of the nature of glossy advertisements of this kind, that they create an impression and evoke a response which dees not proceed from a discerning analysis: cf. Mark Foy's Ltd. v Davies Coop & Co. Ltd. (1956) 95 CLR 190 at 194-5. I also agree that the readers of the advertisement must include many who, by reason of the wide publicity given to Sue Smith's name in the press and on television, would immediately associate the heavy print of the headline of the advertisement with the well known television personality even though, had it not been for the presence of the headline, they would not have recognised either photograph in the advertisement as that of Sue Smith. No doubt there would have been a number of careful and attentive readers with the time and inclination to study with care the meaning of the message thrust before them in advertisements such as this. Those persons might well have decided that there was no endorsement by the famous Sue Smith because if there had been the picture would have heen one of Sue Smith herself. But, in my view, it is important not to exaggerate the importance or numbers of such persons. Nor, in my view, should one place significance upon the circumstance that in its terms, the text of the advertisement does not state that Sue Smith approves or endorses the Blaupunkt equipment. That is the thrust of the advertisement and a reader who knew -—r mw) : Rr eter ee pan pine on ree eee cee oe 2 wo hope pen oo mae pr ee ae vo sony, wee ie 15. of Sue Smith's television fame might well ask why else has the advertiser featured her name so prominently in an advertisement for its television equipment? The relevant addressees of the alleged mMisrepresentation were said, correctly in my view, to be the purchasers and potential purchasers of such equipment. Looking then at such persons, was it necessary for the applicants to establish that all or substantially all of them would be aware of Sue Smith and would draw or be likely to draw from the advertisements the message that she was giving her endorsement in the manner alleged? Analogous questions have arisen in what one might call traditional passing-off cases where the allegation is that the defendant has appropriated the trade name or get up of the plaintiff to pass off his goods as goods made by the plaintiff. The subject was dealt with as follows by Viscount Maugham in Saville Perfumery v June Perfect Ltd. (1941) 58 RPC 147 at 175~176: They (the Appellants] contended that in a passing-off action the plaintiff, in order to prove the association of the goods with his mark or get-up must establish that all persons or substantially all persons in the market are aware of his mark or get-up. There is no authority for this view and, if adopted, it would make it almost impossible to succeed in such an action. The actionable wrong in a passing-off action is the representation by the defendant in the course of his trade that his goods are those of the plaintiff. It is not a defence to prove that there are persons who purchase the goods of the defendant who are not misled, if it is pee et are 16. established that there are a large number of persons who are. . . No doubt the plaintiff has to prove that to a substantial proportion of persons who are purchasers or probable purchasers of goods of the kind in question the name, mark or other symbol of origin, indicates the goods of the plaintiff; but it is a mistake to think that all or almost all such purchasers must entertain that view. I am, therefore, unable to accept the fact that some purchasers of the Appellants' articles associated them with the hair curler business of Mrs. Coakley [predecessor in business of the Appellant] as being any answer to the Respondents' claim [of passing-off]. In Norman Kark Publications Ltd. v Odhams Press Ltd. [1962] RPC 163 at 168, Wilberforce J. (as he then was) referred to the earlier decision, saying: '{I]t 1s enough to show that a substantial number of persons likely to become purchasers of the goods are iliable to be deceived by the defendant's use of the name. On the one hand it is not necessary to show that all, or substantially all, persons in the market associate the name with the plaintiff's goods, if this can be shown of a substantial proportion of persons who are probably purchasers of the goods of the kind in question. On the other hand, that careless or indifferent persons may be led into error is not enough. Finally, when dealing with an application under s.80 of the Trade Practices Act for apprehended contravention of s.52 thereof, Franki J. said (in Weitmann v Katies Ltd. (1977) 29 FLR 336 at 343) that he had to "consider whether a reasonably significant number of potential purchasers would be likely to be misled or deceived just in the same way as this question should be considered in a passing-off action." See also Snoid v Handley (1981) 54 FLR 202 at 208 per Bowen CJ, Northrop, Morling JJ; Brock v Terrace Times Pty. Ltd. (1981) 56 FLR 464 at 466-467 per Bowen C.J, Franki J. we meee a 17. Plainly, his Honour was correct in bearing in mind that one answers these questions not by close ex post facto analysis, but more by a perception of the usual manner in which ordinary people behave, bringing with them but an imperfect recollection of the appearance of Sue Smith in 1983 or her appearance at an earlier date: Australian Woollen Mills Ltd. v F.S. Walton & Co. Ltd. (1937) 58 CLR 641 at 658, Berlei Hestia Industries Ltd. v The Bali Co. Inc.(1973) 129 CLR 353 at 362-363. The issues I have described as to the impact or likely impact of the advertisements present what has been described as a question of fact (Australian Woollen Mills Ltd v F.S Walton & Co Ltd (supra at 658)) or as largely a question of fact {Abundant Earth Pty. Ltd. v R. & C. Products Pty. Ltd. (1985) 59 ALR 211 at 217). Certainly, this case is not, as with an appeal to the Court from the Registrar of Trade Marks, one where the matter is to be decided as upon an original application: Jafferjee v Scarlett (1937) 57 CLR 115 at 119. In the United States such a finding of fact would not be set aside 'by the Court of Appeals "unless clearly erroneous": Federal Rules of Civil Procedure, Rule 52 (a). However, opinion in the United States differs as to whether the issue of likelihood of confusion in a trade mark case is one of fact thus attracting Rule 52 (a), or one of law considered de novo on appeal: Rubin, "The Role of the Clearly Erroneous Standard of Federal Rule of Civil Procedure 52 (a) in Reviewing ' -- 18. Trial Court Determinations of Likelihood or No Likelihood of Confusion" (1984) 74 Trade Mark Reporter 20. Here, the task of the appellate court is to decide whether it is convinced that the trial judge was wrong: Paterson v Paterson (1953) 89 CLR 212 at 223. Certainly in approaching its task, the appellate court is entitled to determine the matter for itself but this is subject to giving due weight, in the manner I have described, to the conclusions of the trial judge: Taylor v Johnson (1983) 151 CLR 422 at 426, Heating Centre Pty. Ltd. v Trade Practices Commission (1986) 65 ALR 429 at 431, 444-445. As I have indicated, I agree with the conclusions reached by the learned trial judge. In any event, even if I had entertained doubts, they would have to have been sufficiently strong as to lead me to conclude that his Honour was wrong. Evidence of Actual Deception Evidence was given before his Honour by Mr George Brown, the General Manager of Channel 10, who had associated the advertisement with Sue Smith and who made the enquiries to which I have already referred to satisfy himself that she had not lent her name to it voluntarily. There was also evidence, in an unsatisfactory form, of several "media personalities" having at least initially associated the advertisement with Sue Smith. w Pere ee wee eee ee oe rr id a way ow ToT (TOD a ei eee or 19. There was no evidence from consumers on this issue. However, as was emphasised in Lego Australia Pty. Ltd. v Paul's (Merchants) Pty. Ltd. (1982) 60 FLR 465 at 468-9, 473 (a case in which the applicant had adduced evidence that some members of the public were under the misapprehension that the respondent's goods were made by the applicant) it is for the Court itself to determine whether conduct is misleading or deceptive or likely to mislead or deceive; such evidence cannot itself conclusively answer the question. This was said in relation to s.52 of the TP Act. The law as to passing-off is similar, and, indeed provided the apt analogy for construing s.52: Kerly, "Law of Trade Marks", 10th Ed, §16.73, Australian Marketing Development Pty. Ltd. v Australian Interstate Marketing Pty. Ltd. [1972] VR 219 at 221-222. "Monopolisation" The appellants stressed that the decision against them encouraged or tended to encourage "monopolies" in names that might be in use by appreciable numbers of the population. In my view, the use of the emotive term "monopoly" ina setting such as this is inapt. First, there is a well developed body of law dealing with the right of persons honestly to carry on business under their own names; see Shanahan "Australian Trade Mark Law and Practice" pp. 330-333; cf. Angoves Pty. Ltd. v Johnson (1982) 43 ALR 349. Secondly, passing-off is concerned with the protection of a plaintiff's business or commercial interest, in a wide sense, but not with what might be thought of as an invasion of privacy by unauthorised adoption of the name of a person with no celebrity or goodwill in that name: 20. (Du _ Boulay v Du Boulay (1869) LR 2 PC 430, Cowley v Cowley [1901] Ac 450 at 460; Ricketson "The Law of Intellectual Property" §25.42); in the United States, the effect of federal and state legislation and the common law may be to establish the right of all citizens to privacy and against "misappropriation of personality" for commercial gain (Prosser and Keeton on Torts, 5th Ed, pp. 851-854), but the interests of celebrities and private persons protected in this way differ: Celebrities and private persons have two broad interests in the names and likenesses that the law should protect. The private person's primary interest rests on legal concern with the right to privacy. The celebrity's primary interest rests both on the law's traditional concern with protecting an individual's interest in the value of his services and on the desirability of preventing abuses of names and likenesses that can mislead consumers. (Professor Treece "Commercial Exploitation of Names, Likenesses and Personal Histories" (1973) 51 Texas Law Review 637 at 647). Passing-off as understood in Australia deals with the latter not the former category of interest. Thirdly, as Norman Kark Publications Ltd. v Odhams Press Ltd. (1962] RPC 163 at 169 and Ballarat Products v Farmers Smallgoods Co. Pty. Ltd. [1957] VR 104 at 108, illustrate, the plaintiff's right to protection by the court cannot survive the life of his goodwill; it is a condition precedent to success that he can show the present subsistence of his reputation: Oertli AG v E.J. Bowman (London) Ltd. [1959] RPC 1 at 4 per Viscount Simonds. There is thus no "monopoly" in the sense of rights conferred by statute for a certain term as with patents, copyright and registered designs. cen ee 21. Fourthly, if two or more persons of the same name have by their independent efforts achieved such celebrity as to endow each of them with the capability of earning money by endorsement of products, the law would deal with their rights inter se by the so-called doctrine of honest concurrent user; the result would be that whilst neither might enjoin the other, (Peter Isaacson Publications Pty Ltd v Nationwide News Pty. Ltd. (1984) 56 ALR 595 at 607), each might enjoin an interloper: "G.E." Trade Mark {1973] RPC 297 at 326, Shanahan (supra) p. 304. Fifthly, any injunctive relief may be on terms or in a qualified form (Brock v Terrace Times Pty. Ltd. (1982) 56 FLR 464 at 470, Peter Isaacson Publications Pty. Ltd. v Nationwide News Pty. Ltd. (1984) 56 ALR 595 at 606-608), In any event, the present is not a case where there is any complaint by or for any third party that what the appellants did, in advertising the video and television equipment, infringed concurrent rights of that party to complain of that conduct. Passing-oOff On the footing that a reasonably significant number of persons reading the advertisements, being potential purchasers of the Blaupunkt equipment, would draw or be likely to draw from the advertisements the message that the media personality, Sue Smith, was giving her endorsement, I turn to consider the question whether the claim for passing-off was made out. If so, then the further question arises as ta the measure of damages for that passing-off. yore cope erren 22. The injury of which the plaintiff complains in many passing-off suits will be loss of sales by diversion or apprehended diversion of business. But, as Dixon J. pointed out in Turner v General Motors (Australia) Pty. Ltd. (1929) 42 CLR 352 at 368, the court intervenes to protect the business reputation of the plaintiff from misappropriation and that protection is not confined to cases where loss simply consists in diversion of trade. In the year before, Learned Hand J. had spoken to like effect: Yale Electric Corp. v Robertson 26 F. 2d 972 at 974 (1928). This certainly means that there may be such misappropriation where the defendant's goods or services are shabby or second-rate, albeit not in direct competition with those of the plaintiff: Totalizator Agency Board v Turf News Pty. Ltd. [1967] VR 605. But the principle also applies where, regardless of any question of inferior quality, the defendant wrongfully deprives the plaintiff of a right to bestow for value his recommendation of the goods or services of a third party. This is established for Australia by Henderson v Radio Corporation Pty. Ltd. (1960) 60 SR (NSW) 576 at 592-595, which was favourably considered in Moorgate Tobacco Co. Ltd. v Philip Morris Ltd. [No. 2] (1984) 156 CLR 414 at 445; see also the discussion by Mr M.H. McLelland (as he then was) (1961) 3 Syd. Law Rev. 525. There has been some fluctuation in the course of authority in England (as is apparent from the article by Phillips and Coleman "Passing-Off and the 'Common field of Activity'" (1985) 101 LQR 242) but the law in Australia is settled by the above authorities. et perm Awe miner . oT as vrata ee etre pen cp ee oe . » , \ ™ ee pea enens setaier ae wy 23. As Moorgate Tobacco Co. Ltd. v Philip Morris Ltd. [No.2] (supra), indicates, the law as it has developed in the United States does not always provide very helpful or direct analogies in this area. This is in part because of the impact there of federal and state statutes upon the common law, differences in the common law between the states, and the blending of statute and common law in the reasoning in many decisions. It can be said that the law as to the "merchandising" of fictional characaters such as "E.T." and the "Bionic Man" fluctuates in emphasis, and in its doctrinal basis (Universal City Studios Inc. v Kamar Industries Inc. 217 USPQ 1162 at 1167-1168 (1982), American Footwear Corp. v General Footwear Co. Ltd. 609 F 2a 655 (1979). Thus, doubts are expressed (particularly at the interlocutory level) as to "how prolonged a search would be required to identify a flesh and blood consumer who actually . . . assumes that a coffee mug proclaiming 'I love E.T.' is necessarily connected with Universal City Studios Incorporated": Denicola, "Institutional Publicity Rights: An Analysis of the Merchandising of Famous Trade Symbols" (1985) 75 Trade Mark Reporter 41 at 47. However, the present is not a "merchandising" case in this sense. I have referred to the findings of fact concerning Sue Smith. The United States decisions have tended to treat as a distinct subject the right of a celebrity to protection against false attribution of commercial endorsement. As it is put in the article by Mr Denicola (at 63): The result has been widespread recognition of the right of well-known personalities to prevent the unauthorised commercial exploitation of their identity. 22. The injury of which the plaintiff complains in many passing-off suits will be loss of sales by diversion or apprehended diversion of business. But, as Dixon J. pointed out in Turner v General Motors (Australia) Pty. Ltd. (1929) 42 CLR 352 at 368, the court intervenes to protect the business reputation of the plaintiff from misappropriation and that protection is not confined to cases where loss simply consists in diversion of trade. In the year before, Learned Hand J. had spoken to like effect: Yale Electric Corp. v Robertson 26 F. 2d 972 at 974 (1928). This certainly means that there may be such misappropriation where the defendant's goods or services are shabby or second-rate, albeit not in direct competition with those of the plaintiff: Totalizator Agency Board v Turf News Pty. Ltd. [1967] vR 605. But the principle also applies where, regardless of any question of inferior quality, the defendant wrongfully deprives the plaintiff of a right to bestow for value his recommendation of the goods or services of a third party. This is established for Australia by Henderson v Radio Corporation Pty. Ltd. (1960) 60 SR (NSW) 576 at 592-595, which was favourably considered in Moorgate Tobacco Co. Ltd. v Philip Morris Ltd. [No. 2] (1984) 156 CLR 414 at 445; see also the discussion by Mr M.H. McLelland (as he then was) (1961) 3 Syd. Law Rev. 525. There has been some fluctuation in the course of authority in England (as is apparent from the article by Phillips and Coleman "Passing-Off and the 'Common field of Activity'" (1985) 101 LOR 242) but the law in Australia is settled by the above authorities. | tert ee pr ene Arp tee ay a 23. As Moorgate Tobacco Co. Ltd. v Philip Morris Ltd. [No.2] (Supra), indicates, the law as it has developed in the United States does not always provide very helpful or direct analogies in this area. This is in part because of the impact there of federal and state statutes upon the common law, differences in the common law between the states, and the blending of statute and common law in the reasoning in many decisions. It can be said that the law as to the "merchandising" of fictional characaters such as "E.T." and the "Bionic Man" fluctuates in emphasis, and in its doctrinal basis (Universal City Studios Inc. v Kamar Industries Inc. 217 USPQ 1162 at 1167-1168 (1982), American Footwear Corp. v General Pootwear Co. Ltd. 609 F 2d 655 (1979). Thus, doubts are expressed (particularly at the interlocutory level) as to "how prolonged a search would be required to identify a flesh and blood consumer who actually .. . assumes that a coffee mug proclaiming 'I love E.T.' is necessarily connected with Universal City Studios Incorporated": Denicola, "Institutional Publicity Rights: An Analysis of the Merchandising of Famous Trade Symbols" (1985) 75 Trade Mark Reporter 41 at 47. However, the present is not a "merchandising" case in this sense. I have referred to the findings of fact concerning Sue Smith. The United States decisions have tended to treat as a distinct subject the right of a celebrity to protection against false attribution of commercial endorsement. As it is put in the article by Mr Denicola (at 63): The result has been widespread recognition of the right of well-known personalities to prevent the unauthorised commercial exploitation of their identity. eee PU ete vas 2 - fe i! 24. See also Professor Treece's article (op. cit. pp. 642-647) and Hoffman "Limitations on the Right of Publicity" (1980) 28 Bulletin of the Copyright Society of the U.S.A." 111 at 119, where Mr Hoffman says: Deceptive trade practices are present in many right of publicity cases. Particularly when the celebrity's name or likeness is used without permission in connection with advertising, the public is easily misled into believing the celebrity has endorsed the advertised product. The findings of fact in the present case support a like conclusion as regards Sue Smith. In 1983, it could accurately be said of Sue Smith, to adapt the language of Cardozo J, that her favour would help a sale of the Blaupunkt television equipment: cf. Wood v Lucy, Lady Duff-Gordon 222 NY 88 at 90 (1917). To depict her as endorsing such products, without her consent, was a passing-off. Fraud The question then arises as to whether in the circumstances of this case the presence or absence of "fraud" on the part of the respondents had any, and if so what, effect upon what would otherwise be their liability in damages for passing-off. His Honour considered the law on the subject and supported the award of damages both for passing-off and for ture a4 epee eo 4, ' les eee tery eo en cee ene + ok * po te ee a et eee 25. contravention of ss. 52 and 53 of the TP Act. No 1sSSue as to fraud arises with respect to the TP Act claims. May damages be awarded for passing-off, where no repetition is threatened and there is no case for injunctive relief? May damages be awarded in such a case where the plaintiff has not established fraud on the part of the defendant? Further, what is meant by "fraud"? The answers are provided by an understanding of the development of the tort of passing-off. The tort developed in the last century in decisions at law and in equity and was placed upon distinct foundations in each jurisdiction. At common law passing-off was first considered as an action for deceit. However, the deceit was practised not upon the plaintiff but upon those who were his customers or potential customers. The early authorities upon passing-off are discussed by Professor Morison in his article "Unfair Competition and Passing Off" (1956) 2 Syd. Law Rev. 50 at 53-55. It is against this background that one must read the statement of Vaughan Williams L.J. in Jamieson and Co. v Jamieson (1898) 15 RPC 169 at 191: This is an action for a wrong. It is an action for deceit; for fraudulently pretending that the Defendant's goods were the Plaintiff's goods, and so trying to pass them off. That is not a breach of any right of property in the Plaintiffs. It is merely the exercise by the Plaintiff of a right that he has that he should not be injured by the fraud of the Defendant in pretending that 26. the goods manufactured by him, the Defendant, are of the Plaintiff£'s manufacture. See also Angelides v James Stedman Hendersons Sweets Ltd. (1927) 40 CLR 43 at 61. Where fraud of this description was shown, the plaintiff was entitled to at least nominal damages without proof of special damage: Blofeld v Payne (1833) 4B & Ad 410, 110 ER 509; Reddaway and Co. v Bentham Hemp-Spinning Co. [1892] 2 QB 639 at 646. In equity, injunctive relief was available to prevent apprehended commission (or further commission) of the legal wrong, in accordance with traditional principle, (a) where damages would be an inadequate remedy for invasion of the plaintiff's rights, or (b) to avoid a multiplicity of actions at law for recurrent torts. Further, after the passage of Lord Cairns' Act (1858) (21 & 22 Vict. c. 27), a court of equity might award damages in addition to or in substitution for injunctive relief. The statutory jurisdiction to award damages was an alternative to the pecuniary remedy courts of equity already had, in their inherent jurisdiction, to order an account of profits. A successful plaintiff would be obliged to elect between these remedies. The account would be limited to the profits made by the defendant during the period when he knew of the plaintiff's rights: Colbeam Palmer Ltd v Stock Affiliates Pty. Ltd. (1968) 122 CLR 25 at 31-35. There was no account for "innocent" passing-off. This position with the remedy of account may be compared with that at law for damages; I will return to this shortly. Mek 27. Equity took the view that damages at law would be an inadequate remedy in respect of passing-off and that injunctive relief was appropriate because of the difficulty of assessing monetary compensation for injury to the plaintiff's trade, or, as it came to he said, his goodwill: Cadbury-Schweppes Pty. Ltd. v The Pub Squash Co. Ltd. [1981] RPC 429 at 489. It held to this view even where the plaintiff could not show the defendant was acting fraudulently. Thus, as Windeyer J. put it in Colbeam Palmer Ltd. v Stock Affiliates (supra at 33), equity intervened by injunction to protect property rather than from abhorrence of fraud. This led judges and authors such as Lopes L.J. (in Reddaway v Bentham Hemp-Spinning Companies [1892] 2 QB 639 at 646), Way C.J. (in Weingarten Bros. v G. & R. Wills & Co. [1906] SALR 34 at 54-55) and Ashburner ("Equity" 2nd Ed. pp. 375-381) to speak of passing-off as having distinct bases at law and in equity. All spoke, it may be added, after the introduction of the Judicature system, which to them apparently had not affected the position. But it should be remembered that as regards pecuniary remedies, neither law nor equity allowed an account or damages for "innocent" passing-off. There has been debate whether damages nevertheless were available for innocent passing-off, because an injunction lay for such conduct; something of a non sequitur. In Henderson v Radio Corporation Pty. Ltd. (1960) 60 SR (NSW) 576, a case decided before the Judicature system was eres WLP ot tre 28. introduced into New South Wales, Manning J. (at 596) stated that if any doubts existed as to the need to prove fraud to recover damages, they were "certainly laid to rest in 1877" by some remarks of Lord Cairns L.C. in The 'Singer' Machine Manufacturers v Wilson (1877) 3 App Cas 376 at 391. The Lord Chancellor there said "in the most distinct manner that, in my opinion, fraud is not necessary to he averred or proved in order to obtain protection for a trade mark..." However, those remarks must be read in context. The appeal arose out of the dismissal by Sir George Jessel M.R. of the plaintiff's suit to restrain alleged passing-off. The House of Lords allowed the appeal on the footing that the plaintiff might have succeeded in obtaining injunctive relief without showing fraud. It is plain from what was said by Lord Cairns L.C. (at 392), Lord O'Hagan (at 345-396) and Lord Blackburn (at 400) that they well recognised that different principles applied to actions to recover damages at law. In 'my view, the distinction between the legal and equitable wrongs together described as "passing-off" has not evaporated by some unexplained operation of the Judicature system. It would have been an odd result if the equitable remedy (account) required persistence after notice, whilst the legal remedy (damages) was, by force of the Judicature legislation, (which provides for equitable supremacy in cases of conflict) made more draconian than the equitable remedies. Whilst fraud was the gist of the action for damages, the plaintiff seeking injunctive relief had a different task, Breen ei ete ean eens : 2 tas a 74 ' Lo. 7 co ne ee eee eee emer s 29. as explained by Evatt Cu and Myers J in Henderson's Case (supra at 594). The passage in question 'is as follows: Passing-off is a wrong and is actionable at law. In such an action damage is presumed on proof of passing off and therefore a nominal sum by way of damages follows as a matter of course. General damages may, however, only be awarded if there is evidence of damage. Instead of proceeding at law a plaintiff may sue in equity for an injunction, as may be done in respect of other wrongful acts of a different nature. If he sues in equity, he takes advantage of the equitable principle that the court will interfere by injunction to restrain irreparable injury to property . . . and therefore he must go further than he need at law. He must show irreparable injury, that is that he has suffered injury which cannot be properly compensated by damages, or that he will probably suffer such injury. If a plaintiff in equity succeeds in having the defendant enjoined, he may also have an account of profits or an inquiry as to damages. Formerly, he could only have had an account, because that was equity's only remedy, but since Lord Cairns' Act, he may have damages. If he elects to take an inquiry as to damages, he takes a common law remedy and his damages will be ascertained in the same way as they would have been ascertained at law. It may be noted that in England judicial opinion on the question of Liability in damages for "innocent" passing-off has fluctuated, notably in Draper v Trist (1939) 56 RPC 429 at 434, 441, 443~444, where differing views were expressed, and in Marengo v Daily Sketch and Sunday Graphic Ltd. (1948) 65 RPC 242 at 247, 251, 252 and Wilts United Dairies Ltd. v Thomas Robinson Sons and Co. Ltd. [1957] RPC 220 at 229, where the point was left open. It would be an error to conclude that the consequence of treating fraud still as the basis for relief in passing-off is always to impose an additional burden to plaintiffs. 30. Rather, 1t may provide a remedy where none is available to protect goodwill. One example of relief on the basis of fraud but not goodwill is as follows. Various decisions have proceeded on the footing that where the court intervenes to protect the goodwill of the plaintiff, it does so to protect property rights situated in the forum, with the result that if the plaintiff's goodwill is "international" but not "local" because the plaintiff has no place of business in the forum, no case is made out; this has been held to be so even though local customers of the defendant believe they are dealing with the Plaintiff or purchasing the plaintiff's goods or services: The Athletes Foot Marketing Associates Inc. v Cobra Sports Ltd. {[1980] RPC 343. The apparent stringency of such a rule has been alleviated in some decisions by treating as sufficient to establish local goodwill, both sales by local distributors of products made abroad by the plaintiff (Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 100 - 101, 144 - 145), and other business activities falling short of actual establishment of a local place of business (Fletcher Challenge Ltd. v Fletcher Challenge Pty. Ltd. [1981] 1 NSWLR 196, Taco Bell Pty Ltd. v Taco Company of Australia Inc. (1981) 40 ALR 153 at 167 (affd. (1982) 42 ALR 177)). The decision of Way C.J. in Weingarten Bros. v G. & R. Wills & Co. {1906] SALR 34 at 53-55, shows that where fraud has been established against the defendant, the plaintiff may succeed without showing a local goodwill arising from the ac ieniealcans ere nee ee = : ata 31. conduct of a local business. In this way the "pirate", who sets out to attract to his business local persons who know of the fame of the "international" business of the plaintiff, may be brought to account. Where there are several persons joined as defendants in respect of a joint piratical enterprise, the tort of conspiracy may provide an additional ground for relief: Fletcher Challenge Ltd. v Fletcher Challenge Pty. Ltd. [1981] 1 NSWLR 196 at 206-207. In either case there is a liability for damages, and injunctive relief also is available, not in aid of the "local" goodwill of the plaintiff, but to restrain commission or repetition of tortious acts and to avoid the multiplicity of actions for damages: Angelides v James Stedman Hendersons Sweets Ltd. (1927) 40 CLR 43 at 65-66. That case also provides another example of a remedy against a fraudulent defendant being available in equity where a different result would obtain in equity against an "innocent" defendant: see 40 CLR AT 65-66. What then is meant by "fraud" in relation to alleged passing-of£? As Lord Blackburn indicated in The "Singer" Machine Manufacturers v Wilson (1877) 3 App. Cas. 376 at 399-400, the question really is one of what evidence must be adduced by the plaintiff such that in an action at law the judge would be bound to leave it to the jury to say whether the defendant did try to sell his own goods as and for those of the plaintiff. The authorities establish that there is evidence from which a finding of fraud might be made where, after notice of the rights asserted by the plaintiff, the defendant persisted in the conduct complained of: Hendriks v Montagu sats. nyo co 32. (1881) 17 Ch.D 638 at 645-646, The Bodega Company (Ltd.) v Owens (1889) 7 RPC 31 at 36, Reddaway v Banham (1896) 13 RPC 218 at 223 arguendo. Thus even if he commenced his activities in ignorance of the plaintiff£'s claims, a defendant may be held to be fraudulent if he continues after the plaintiff's claim is brought to his attention; and he cannot complain if the court holds the claims asserted against him were well based and that he had infringed the plaintiff's cights; cf. United States Surgical Corp. v Hospital Products International Pty. Ltd. {1983] 2 NSWLR 157 at 251-259 (reversed on other grounds, (1984) 156 CLR 41). In such a case a jury might properly infer that that defendant had wilfully shut his eyes to the misleading nature of his trade: The English and Scottish Mercantile Investment Co. v Brunton [1892] 2 QB 700 at 707-708. The result would be that the successful plaintiff would have an election between damages and an account of profits, in respect of the same period. In Turner v General Motors (Australia) Pty. Ltd. (1929) 42 CLR 352 at 362, Isaacs J. put the view that fraud constituted by persistence after notice would "not necessarily" be such as would support an agtion in deceit. However, as I have indicated, it is not easy to see the reason for the qualification; see also B.M. Auto Sales Pty. Ltd. v Budget Rent A Car System Pty. Ltd. (1976) 51 ALJR 254 at 258. My conclusion is that a successful plaintiff in a passing-off suit has an election for his pecuniary remedy between an account of profits and an inquiry as to damages, . can - ri aT ra oT ean an oe tr ae nn as 4 Te ee ee ee oe, my eee eee 33. each remedy being limited to the period of the defendant's persistence after notice in the manner I have described, If the conduct of the defendant from an earlier period is the subject of a finding of fraud then these remedies run from the commencement of that period. In this way the distinct origins of these two remedies nevertheless lead to an harmonious result. Such a result is also consistent with the evident purpose of s.68 of the Trade Marks Act 1955. This operates in situations where the proprietor of a registered trade mark by use of the mark passes his goods off as those of the plaintiff; the goodwill is in the common law mark, not the registered mark, and the statutory rights do not defeat the claim for passing~off: Shanahan "Australian Trade Mark Law and Practice" p 322. However, in such cases, s.68 of the Trade Marks Act provides that damages will not be awarded against the defendant registered proprietor for passing-off if he satisfies the Court that (a) at the time he commenced to use the trade mark he was 'unaware and had no reasonable means of ascertaining that the trade mark of the plaintiff was in use; and (b) when he became aware of the existence and nature of the plaintiff's trade mark he forthwith ceased to use the trade mark in relation to the goods or services in relation to which it was used by the plaintiff€. Of course, the result of the foregoing is that an "innocent" passing-off attracts injunctive relief but no pecuniary remedies. But this is by no means an unattractive a 34, position for the law of torts to adopt, given the absence of a duty of care between trade rivals (Erven Warnink BV v J. Townend and Sons (Hull) Ltd. [1979] AC 731 at 740-3, Moorgate Tobacco Co. Ltd. v Philip Morris Ltd. (No. 2] (1984) 156 CER 414 at 443-6) and the absence of fraud (cf. Parkdale Custom Built Furniture Pty. Ltd. v Puxu Pty. Ltd. (1982) 149 CLR 191 at 196-7). I have already set out the facts dealing with the appearance of the seven advertisements between 5 May 1983 and 30 June 1983 and with the appearance of advertisements in this sequence after the initial complaint by Sue Smith in her letter of 30 May 1983. In my view, there is ample ground to support his Honour's conclusion, which in any event was not challenged, that the present case is one of persistence in passing-off after receipt of notice of the plaintiff's rights. Accordingly, in my view, the appeal fails insofar as it contests the liability of the appellants for passing-off. There was no appeal against the measure of damages awarded. There was a cross-appeal in which it was asserted that the damages were inadequate. I will deal with the cross-appeal later in these Reasons. Contravention of the Trade Practices Act I turn now to the appeal against the finding of contraventions of ss.52 and 53 of the TP Act. 35. His Honour found that the publication of the advertisements contravened s.52 of the TP Act and also that there had been contraventions of s.53 (c) and s.53 (d) of the TP Act because the advertisement represented that the Blaupunkt video had the sponsorship and approval of Sue Smith which it did not have, and that the first appellant had her sponsorship and approval which it did not have. I have already dealt with those arguments concerning the impact of the advertisement that were common to all the claims made in the case. The appellants also developed an argument specifically directed to s.52. It was that those persons who were deceived or who were likely to be deceived by the advertisement as a sponsorship by Sue Smith, the television personality, would be led into error by an erroneous preconception on their part. The erroneous preconception was said to lie in the assumption that the mere use of the name Sue Smith carried with it only two possibilities. These were either that she had endorsed the product or that someone else had misappropriated her name for such endorsement and without her consent. The appellants submitted that what was ignored, and what was the source of the erroneous preconception, was the other possibility, viz. that the advertiser was merely using a common name, not the name of the well known television personality, but the name of "Everywoman". In MeWilliam's Wines Pty Ltd. v McDonald's System of Australia Pty. Ltd. (1980) 49 FLR 455, the respondent failed on appeal in its attempt to restrain the appellant wine producer oe ore yrtes 36. from marketing its wine as "Big Mac"; it failed on the footing that if the public believed that the "Big Mac" wine was a product of the respondent "fast-food" retailer, the cause of error was an erroneous preconception. The erroneous preconception was held {at 466-467, 478-479) to lie in the belief that the "fast food" retailer had extended the range of its activities into wine production. Likewise, in Lego Australia Pty Ltd v Paul's (Merchants) Pty. Ltd. (1982) 60 FLR 465, the applicant producer of plastic toy building blocks under the name "Lego" failed in an attempt to restrain the marketing of "Lego" plastic hoses. Again, it was held (at 474) that persons deceived by the conduct of the respondent would be giving effect to an erroneous misconception as to the extent of the business operations of the applicant. In both these cases, it is significant that there was no claim for passing-off and they were fought as alleged contraventions of ss.52 and 53 of the TP Act. It may be noted that in litigation involving similar products in the United Kingdom, the Lego company succeeded in passing-off: Lego System AS v Lego M Lemelstrich Ltd. [1983] FSR 155. No doubt the evidence in the English litigation was different from that in the Australian litigation. Nevertheless, these cases do serve to illustrate a significant difference between the operation of s.52 and passing-off. It is, as I have indicated, not necessarily a defence to a claim for passing-off that the defendant does not occupy a "common field of activity" with the plaintiff. The question is whether the reputation and goodwill of the plaintiff extends beyond fields of immediate TTR ny eres pee : ne pvp ay TOT tee we ee . 37. endeavour and entitles it to protection against misappropriation by defendants who seek to dig a pit in advance of any future entry of the plaintiff into the field in question. The decisions turning upon "erroneous preconception" may involve the proposition that the cause of the error claimed to give rise to contravention of s.52 was a helief on the part of consumers for which the defendant was not responsible. It would, in my view, be unwise to erect these decisions into some principle or dogma of general application in construing s.52. In particular, even where a consumer nourishes an erroneous preconception as to the range of the business activities of the applicant, the consumer will act to his or her detriment only because the conduct of the respondent bears upon or exploits that preconception. It has never been the law that in order for conduct to contravene s.52, it must be the sole cause of the consumer being mislead or deceived: Milner v Delita Pty. Ltd. (1984) 61 ALR 557 at 572. In any event, in the present case, his Honour held that the deception of consumers was struck by the advertisement upon a correct public understanding that television personalities use the image conveyed by their well known and admired personalities for commercial gain and that they do so by endorsement of products. Accordingly, whatever be the true scope of any doctrine of "erroneous preconception", his Honour held, in my view correctly, that it had no application to this case. If there was a preconception, it was a correct one. yore se 38, I turn now to s.53 (c) and s.53 (d) of the TP Act. His Honour held that the advertisement represented that the Blaupunkt video had the sponsorship and approval of Sue Smith, which it did not have (s.53 (c)) and that the first appellant had her sponsorship and approval which it did not have (s.53 (d)). In Weitmann v Katies Ltd. (1977) 29 FLR 336 at 344, Franki J treated the term "sponsorship" in 5.53 as envisaging, in connection with trade names, "something more along the lines of a certification mark" (Trade Marks Act 1955, Part XI), that is to say a use of the name to certify quality, accuracy or other characteristic of goods or services. In McDonald's System of Australia Pty. Ltd. v McWilliams Wines Pty. Ltd. (1979) 28 ALR at 248, Franki J gave a similar interpretation of "approval" in s.53. This may be placing too narrow a meaning upon these terms, attached as they are to the verb "represent". Nevertheless, claims made pursuant to s.53 and s.82 involve establishing, albeit in civil proceedings, the commission of a series of misdemeanours. I heed the caution by Sheppard J in Apple Computer Inc. v Computer Edge Pty. Ltd. (1984) 53 ALR 225 at 279. In my view, in the circumstances of this case, his Honour was in error in holding that the respondents had made out their claims based on s.53. However, that does not affect the award of damages under s.82, based, as it was primarily and independently on contraventions of 5.52. Cross Appeal It is settled, as his Honour illustrated with reference to a number of decided cases, that loss or damage in tee rae ala tae bee eae ard ee 39. respect of a contravention of s.52 may be recovered under s.82 without proof of fraud. It follows that damages were recoverable in respect of the publication of all seven of the advertisements. On the appeal, there was no dispute between the parties that his Honour approached the question correctly by asking what would have been the appropriate fee or royalty for an endorsement of these advertisements with the consent of the second respondent. By the time these advertisements appeared, the second respondent had been contractually free to conclude sponsorship agreements. She was to do so in 1985. By the agreement, she undertook to appear in certain productions for the promotion and advertising of various hair related products bearing the brand name "Pears". The consideration for this was $50,000 and the contract was extended for a further twelve month period for consideration of another $50,000. There was evidence from Mr Bedford, whose agency represents Miss Smith in these matters, that in 1983 his firm would probably have been asking for somewhere around $5,000 for an advertisement in a magazine but that the amount would have depended upon the national or local range of publication of the magazine. Mr Bedford also gave evidence that if the seven advertisements in question here had, in 1983, been put to him as an advertising campaign he would have tried to negotiate probably somewhere between $20,000 to $25,000 as a particular short campaign. -4 ee sorapm se 40. In reaching his conclusion on the question of damages, his Honour said that he was careful not to overlook that an authorised use of the name Sue Smith would have had at least as serious an effect upon her ability to endorse other products as the unauthorised use proved in this case. His Honour continued: I also bear in mind the nature of the unauthorised use of the name Sue Smith, the extent of it, and the probability on the evidence that any commercial arrangement actually negotiated with anyone would have authorised use varying substantially from the unauthorised use which was in fact made. Taking these matters into account, and in the light of the evidence, I think damages should be assessed at the sum of $15,000... In my view, his Honour's decision was plainly correct as regards the quantum of damages under s.82 of the TP Act. The position is not as simple with damages for passing-off, bearing in mind that the liability there is based upon persistence after notice and that notice was first given only by medium of the letter of 30 May 1983, that is to say after some of the seven advertisements in question had already been published. Nevertheless, the damages for passing-off in a case such as this essentially are concerned with the misappropriation of the capacity of the second respondent to earn money by sponsoring products of the description of those advertised. That capacity is misappropriated and damage is inflicted upon the second respondent by the conduct of the appellants, as much by the publication of advertisements in mw ost ae - ae eee se neat aie 41. June after knowledge of her rights, as by the earlier publications. In other words, so far as passing-off is concerned, I would not diminish the quantum of damages awarded by some sum representing a proportion of the advertisements published before 30 May. In the circumstances, in my view, the cross-appeal should be dismissed. It follows that, in my view, both the appeal and the cross-appeal fail. I certify that this and the preceding forty (40) pages are a true copy of the Reasons for Judgment of his Honour Mr. Justice Gummow. Associate: Mah fame Date: 25 November 1987 <7 wee oe or. moe epee eR . .