JUDGMENT No. 42T/ 88. CATCHWORDS PASSING OFF - packaging of similar products labelled with same descriptive words - necessity to prove distinctiveness - no secondary meaning acquired - "secondary meaning" may be used in differing senses. PASSING OFF - requirement of misrepresentation - whether proof of fraudulent intent sufficient to ground action - proof of such intent only of evidential weight. TRADE PRACTICES - misleading and deceptive conduct - assistance to be derived from authorities on passing-off - relevance of intention. FEDERAL COURT - account of profits - power to order accounts - actions in accrued jurisdiction - remedies under Part V of Trade Practices Act. Designs Act 1906 Trade Practices Act 1974 Office Cleaning Services Ltd. v Westminster Window & General Cleaners Ltd. tr5a6} 63 RPC 39 Hornsb Buildin Information Centre Pty. Ltd. v Sydney Building Information Centre Ltd. (1978) 15 CLR 216 Park Court Hotel Ltd. v Trans-World Hotels Ltd. [1970] FSR 89 Ca re weppes Pty. Ltd. v The Pub Squash Co. Ltd. [1981] RP 10th Cantanae Pty. Ltd. v Shoshana Pty. Ltd. (1988) ATPR 40-833 My Kinda Town ae v Soll TI982] FSR tir T1983] RPC 407 James Watt Constructions Pty. Ltd. v Circle-E Pty. Ltd. [1970] 3 NSWR 461 T. Oertli A.G. v E.J. Bowman (London) Ltd. [1959] RPC l Erven Warnink B.V. v J. Townend & Sons (Hull) Ltd. [1979] Ac 731 Moorgate Tobacco Co. Ltd. v Philip 156 CLR 414 Morris Ltd. Lord Byron v Johnson (1816) 2 Mer. 29; 35 ER 851 H.D. Bulmer Ltd. and Showerings Ltd. v J. Bollinger S.A. [1978] RPC 79 B.M. Auto Sales Pty. Ltd. v Budget Rent A Car System Pty. Ltd. (1976) 51 ALIR John Engelander & Co, Pty. Ltd. v Ideal Toy Corporation (1981) 54 FLR 357 R. & C. Products Pty. Ltd. v Hunters Products Pty. Ltd. (1988) ATPR - Australian Guarantee Corporation Ltd. v Sydney Guarantee Corporation utd. (1951) SR (Nsw) l6é Wilson v Samuels (1913) 13 SR (NSW) 394 Australian Woollen Mills Ltd. v F.S. Walton & Co. Ltd. (1937) 56 CLR 641 Con-Stan Industries Pty. Ltd. v Satinique Corporation Pty. Ltd. (1969) 91 WN tHSH) S630 Ronson Products Ltd. v James Ronson Pty. Ltd. (No. 2) [1957] VR 7Z1:°:~"CtCS:;C ;«7T;73TPSStséi'i'iS Plomien Fuel Economiser Coy. Ltd. v National School of Salesmanship Ltd. (1943) 60 RPC 209 John Walker & Sons Ltd. v Henry Ost & Co. Ltd. {1970] RPC 489 Shotover Gorge Jet Boats Ltd. v Marine Enterprises Ltd. (1984) 2 NZLR 154 Weitmann v Katies Ltd. (1977) 29 FLR 336 Brock v Terrace Times Pty. Ltd. (1982) 56 FLR 464 Elders Trustee & Executor Co. Ltd. v E.G. Reeves Pty. Ltd. (1987) 78 ALR 193 Rhone-Poulenc Agrochimie S.A. v UIM Chemical Services Pty. Ltd. (1986) IZ FCR Bridge Stockbrokers Ltd. v Bridges (1984) 4 FCR 460 Turner v General Motors (Aust.) Pty. Ltd. (1929) 42 CLR 352 Totalisator Agency Board v Turf News Pty. Ltd. [1967] VR 605 Parker-Knoll Limited v Knoll International Ltd. [1962] RPC 265 Musca v Astle Corporation Pty. Ltd. (1988) ATPR 40-855 Colbeam Palmer Ltd. v Stock AtEilistes Pty. Ltd. (1968) 122 CLR TELMAK TELEPRODUCTS (AUSTRALIA) PTY. LTD. v COLES MYER LTD. No. Gi002Z of 1988 CORAM: GUMMOW J. PLACE: SYDNEY DATE: 5 AUGUST 1988 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G1002 of 1988 GENERAL DIVISION BETWEEN: TELMAK TELEPRODUCTS (AUSTRALIA) PTY. LTD. Applicant AND: COLES MYER LTD. Respondent CORAM: GUMMOW J. PLACE: SYDNEY DATE: 5 AUGUST 1988 MINUTE OF ORDER THE COURT ORDERS AS FOLLOWS: 1. That in respect of the principal proceedings: (a) the application be dismissed. (b) the applicant pay the costs of the respondent. 2. "Phat in respect of the cross-claim: (a) the cross-claim be dismissed. (b) the cross-respondent pay the cross-claimant's costs of the cross-claim. Note: Settlement and entry of orders 1s dealt with by Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G1002 of 1988 ) ) GENERAL DIVISION BETWEEN: TELMAK TELEPRODUCTS (AUSTRALIA) PTY. LTpD. Applicant AND: COLES MYER LTD. Respondent CORAM: GUMMOW J. PLACE: SYDNEY DATE: 5 AUGUST 1988 MINUTE OF ORDER THE COURT ORDERS AS FOLLOWS: 1. That in respect of the principal proceedings: (a) the application be dismissed. (b) the applicant pay the costs of the respondent. 2. "that in respect of the cross-claim: (a) the cross-claim be dismissed. (b) the cross-respondent pay the cross-claimant's costs of the cross-claim. Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules. 2. In 1986, Telmak commenced the promotion of a new product ("the Telmak product") by a television advertisement which has since appeared in various areas throughout the country 1n what was described before me as "concentrated bursts" of periods ranging from one week to one month. The advertisement was recorded on 24 March 1986 and runs for approximately 2 minutes, including time for the taq. The script for the advertisement 1s in the following terms: Now enjoy delicious oven pan fried foods without the fried food calories. Introducing the revolutionary dry fry convection oven pan, a simple & powerful design gives crisp deep fried goodness with just a drop of oil, there's no water or extra fat. The secret 1s the unique air throw rim. Super heated air rushes up, circulating around the food, cooking it quickly and evenly, automatically basting food not in fattening grease but in its own rich flavours and aromas more flavour than you've ever tasted before, less oll, fewer calories, less cholesterol. Look this fried chicken is cooking because of the boiling o1l, its actually soaked up this much oil. This whole chicken is surrounded only by naturally flavoured super heated air. . Turn out crispy french fries or this fat free fisherman's basket. The pan is so dry you can even bake the fluffiest sponge right on your stove top, gas or electric. The super heated convection currents bake evenly - top and bottom. Dry cook snags just like a barbie or even dry roast nuts, potatoes or popcorn. Dry fry your vegies without boiling or steaming. This broccoli was boiled, ours cooked in the oven pan, 1s bursting with colour and vitamins. 3. There's even room for a roast. Best of all the surface is Rockcote, a new space age surface so tough that we've guaranteed it for 10 years. Even burnt milk peels off. The stove top oven pan will cook food twice as fast with more flavour and no fat or water and almost no oil or we'll give you back your money. Save time, money, calories and cholesterol. Get the new dry fry oven convection pan together with this 20 page European cookbook for just $39.95. There follows space for the "tag" directing purchasers to particular retailers. The accompanying visual displays are of material appropriate to the sound descriptions. Both visually and orally the product is identified by the words "dry fry oven convection pan", in that sequence, although the package in which the product is sold is also shown. This bears the words "dry fry convection oven pan with lid" prominently displayed, and in that sequence, together with the word "Telmak". The emphasis in the advertisement is on the virtues of the product and whilst the expression I have mentioned does appear, 1t 15s not a particularly striking feature of the advertisement aurally or visually. The Telmak product has been extensively sold throughout Australia. By 10 June 1988, 115,378 units had been sold to the public. Supplies are manufactured both in Australia and Korea. The respondent ("Coles Myer") conducts a business throughout Australia from a number of shops under one or both of the names "K-Mart", or "Super K-Mart - The Hypermart". On or about 30 May 1988, Coles Myer commenced distribution of a 16 page brochure which advertised a wide range of goods as available at its stores. On page 3 there is described as being available for purchase for $14.96 a "non stick dry fry pan for easier cooking". The product 1s said to come in the choice of blue or red and an accompanying photograph shows a pan and a blue coloured lid. The product was sold in packaging which prominently featured the words "Dry Fry Convection Oven Pain [sic] with Lid". By these proceedings, Telmak seeks an account of profits and an injunction restraining Coles Myer from advertising, promoting, selling, offering or exposing for sale or by way of trade distributing the Coles Myer product I have described, in conjunction with any use of the name "dry fry convection oven pan with lid". The application as framed seeks much wider relief, namely restraint from selling the product at all. But in address counsel for Telmak put their claim on the narrower footing. The applicant, as will be apparent from the foregoing, makes no claim to the exclusive identification with its product of the phrase "dry fry pan". It 1S important in understanding what follows to appreciate the rather limited basis for the relief sought. Telmak propounds its claim in passing-off, and also on the basis that there is contravention and apprehended further contravention of s. 52 of the Trade Practices Act 1974 ("the TP Act"). The respondent brings a cross-claim. I defer consideration of this to a later portion of these reasons. The evidence shows that there is not the identification with the Telmak product of the expression "dry fry convection oven pan with lid" which Telmak must establish if it is to make out its case for the relief it seeks, both on the ground of passing-off and contravention of s. 52 of the TP Act. I turn to consider the evidence. One of the trade witnesses, Mr. Campbell, who was called by Coles Myer, said the following in the course of his cross-examination by counsel for Telmak: The word "convection" does not come unto it. If we were to show it, for example, and somebody comes up they say "Is that the dry fry-pan that was on television?". They do not say "dry-fry convection oven pan". Later he said: The word "convection" is a disassociated word actually in my opinion; 1t does not register with me and I do not believe it registers with the consumer from the feed back I get. Mr. Phillips is the Merchandise Controller for the Homeware and Electrical Division of James McEwan Pty. Ltd., a company with 47 stores in Victoria, 10 1n South Australia and 10 in Queensland. This company has been selling the Telmak product at least since the time when he commenced with the company in September 1986. He deposes that with telephone enquiries from members of the public the usual question is: "I am ringing to enquire about the dry-fry oven pan I have seen on Tv". On other occasions the question is along the lines: "I am ringing about those dry fry pans. It's one of those Telmak products advertised on TV". Mr. Phillips also states in his affidavit that the product is widely known throughout the industry as "the Telmak dry fry pan" and that when he holds discussions with buyers or other persons in retailing or merchandising concerning homeware products, he always refers to the product as "the Telmak dry fry pan". Mr. Phillips' affidavit was filed by Telmak. Mr. Fitzgerald, whose affidavit also was filed by Telmak, is the proprietor of a shop at Lithgow in New South Wales. He commenced to sell the Telmak product in August 1987 and has found the product a very popular one. There was a television marketing campaign sponsored by Telmak in the Lithgow area in August 1987 and Telmak has periodically re-advertised the product on local television. Mr. Fitzgerald is notified in advance of a proposed campaign and usually acquires additional stocks in anticipation of a significant increase in demand when the advertising commences. There are very significant increases in demand on commencement of a television campaign. Most people who come into Mr. Pitzgerald's store to purchase the product make the request in the following terms: "Do you have one of those fry pans which I've seen advertised on TV?". In addition to the extensive television advertising, Telmak has also given financial assistance to major retailers to place advertisements for the product in daily newspapers and retail catalogues. Examples in evidence identify, in some instances, the product as "dry fry convection oven pan with lid" and in others merely as "dry fry oven pan with fat free cooking - non stick interior". In all the advertising, the phrase "as seen on TV" is heavily emphasised. In February or March 1988, Mrs. Tickner had seen the Telmak product advertised on television and in April she purchased one from a store at Goulburn. She paid $39.95. She used the product on a number of occasions and was happy with it. On 30 May 1988, that 1s to say at about the date the catalogue was launched by the respondent, she went to the K-Mart store at Goulburn. As she entered the store she picked up a catalogue, being that I have already described. She saw in it the advertisement for a dry fry pan at a price of $14.96. 8. It had a picture of the pan basically the same as that she had bought ain April. The advertisement does not use the expression "dry fry convection oven pan with Lid". Mrs. Tickner saw the product on the shelves, examined it closely and apart from the colour thought it looked exactly the same as the one she had bought earlier. She was annoyed because she thought she had paid a high price at $39.95 when the same product was apparently selling at K-Mart for a much cheaper price. Her evidence does not help the applicant to establish distinctiveness of the phrase for which it seeks injunctive protection. The effect of this body of evidence (an effect supplemented and reinforced by other evidence I consider later un these reasons which deals with the history of dry fry product promotions in recent years) 1s that Telmak has not established the necessary distinctiveness in respect of the phrase use of which, by Coles Myer on its product, Telmak seeks to prevent. I appreciate that a large number of units have been sold in a package which does display the phrase in question. However, the evidence spells out what one otherwise would have suspected, namely that the public and the trade use more succinct expressions as a means of identifying the Telmak product, and that the television advertisement 1s used as a primary reference point for identification. In this regard I should point out that the applicant does not seek to enjoin use of the phrase "as advertised on television" by Coles Myer in relation to its product. There was, however, some additional evidence on the topic. on 1 June 1988, an executive of Telmak telephoned nine K-Mart stores in the Sydney metropolitan area. In each case she told the telephonist she wished to make an enquiry about a kitchenware product. She was then put through to another person. In each case she asked in words to the effect: "Do you have any of those dry fry pans which I have seen advertised on TV?" (I pause to observe that even an executive of the applicant chose to identify the product by the words "dry fry pans" and by television advertising, not by the cumbersome title appearing on the packaging of the Telmak product). In each case the response to the question was in terms apparently connecting the Coles Myer product with that sought to be identified by the questioner. There may be innocent explanations of what transpired on these occasions. The matter was not pursued in any detail before me. Nevertheless, one would expect that steps be taken, if they had not already been taken, by Coles Myer to ensure that its sales staff not respond to questions of this character so as to mislead the questioners into the belief that if they purchased the K-Mart product, they would be purchasing the product they had seen advertised on television. I return to the issues in dispute. For the reasons I have given, the applicant cannot on orthodox principles succeed in the claims to the relief it propounds. Perhaps sensing wes 10. that this 1s so, counsel for Telmak sought to make good propositions of law which would make good its claim on either or both passing-off and contravention of s. 52 without it necessarily having made out on the evidence its case for distinctiveness. Counsel for Telmak submitted that, on the assumption that "Dry-Fry Convection Oven Pan With Lid" is a descriptive phrase, a passing-off suit will lie if either (a) that phrase has become distinctively associated with the applicant's product or business, or (b) the phrase has been used by the respondent with an intention to mislead or deceive. I draw attention to the disjunction between propositions (a) and (b). It followed, 1t was submitted, from this formulation of the law that the respondent infringed the rights of the applicant if it used the phrase in question to identify 1ts goods, even 1f the phrase had not become distinctively associated with the applicant's product or business, provided the respondent acted with an intention to mislead or deceive. . . . For authority, counsel for Telmak relied upon the decision of the House of Lords in Office Cleaning Services Ltd. v Westminster Window & General Cleaners Ltd. (1946) 63 RPC 39. That decision 1s cited frequently in this country for the proposition that quite small differences will suffice sufficiently to distinguish one trade name from another, where the plaintiff uses descriptive words for its trade name (e.g. ll. Hornsby Building Information Centre Pty. Ltd. v Sydney Burlding Information Centre Ltd. (1978) 140 CLR 216 at 229). However, counsel for the applicant could point to no authority in any jurisdiction (save perhaps that to which I later refer) as relying upon the House of Lords for the proposition he sought to make good in the present case. Nor, 1n my view, does the English decision stand for any such proposition. In the Office Cleaning Services Case, it had been held in the Court of Appeal, reversing the decision of Morton J., that the difference between the styles "Office Cleaning Services" and "Office Cleaning Association" was sufficient to distinguish the respective businesses of the parties (see (1944) 61 RPC 133). The House of Lords dismissed an appeal against the decision of the Court of Appeal. The leading judgment in the House of Lords was delivered by Lord Simonds; in two passages in his speech, his Lordship referred to the acquisition of a secondary meaning for descriptive words or phrases. Counsel for the applicant in the present case relies upon these passages as a first step in his argument. The first passage, 63 RPC at 41, lines 45-50, is as follows: The question is not whether a trader who has chosen to incorporate in his trading style words which are descriptive of the services he performs cannot as a matter of law succeed in a passing-off action based on the use by another trader of a trading style which, by reason of the incorporation of those words, 18S calculated to deceive, unless he establishes by evidence that such words have acquired a secondary meaning or 12. have ceased to be descriptive of the services rendered. The second passage (at 42-43) 1s in the following terms: Thirdly, your Lordships will note that the Appellants do not claim that the words "Office Cleaning" have acquired a secondary meaning, by which I understand them to mean that they do not claim that these words mean a service of cleaning offices as rendered by them and them alone. Such a claim would indeed be impossible to maintain. But, while making this disclaimer, they nevertheless contend that as a trade name "office cleaning" is so much identified with their business that any trader who ventures to use these words as part of his trade name must clearly differentiate. This seems to me to be no more than a restatement of the familiar problem. The Court will undoubtedly take into consideration long user of a descriptive name but will not forget that, since it is descriptive, small differences may suffice. Counsel for the applicant relied upon these passages as indicating that in some circumstances an applicant may succeed in a passing-off case without establishing a "secondary Meaning", in respect of the word or words which he uses to identify his business or his goods and from the use of which he seeks to enjoin the respondent. However, the phrase "secondary meaning" may be used in varied senses and the treatment of it by Lord Simonds has to be understood in the context of the case. At first instance, Morton J. had found that by 1942 (the year in which the 13. defendant commenced the conduct complained of) the phrase "Office Cleaning Services" had come to mean the plaintiff company to a large number of persons inside and outside the trade (see (1943) 61 RPC 21 at 25). That finding was not attacked before the Court of Appeal or the House of Lords. Therefore, on ordinary principles, "Office Cleaning Services" would be considered distinctive and the attendant goodwill would be protected by a passing-off suit even though it was not the case that to all members of the relevant trade or section of the public the phrase had ceased to convey any other meaning: Park Court Hotel Ltd. v Trans-World Hotels Ltd. {1970] FSR 89 at 92; Cadbury-Schweppes Pty. Ltd. v The Pub Squash Co. Ltd. [1981] RPC 429 at 456-457; l0th Cantanae Pty. Ltd. v Shoshana Pty. Ltd. [1988] ATPR 40-833 at 48,995. The question was whether the conduct complained of would be likely "to lead a substantial number of reasonable persons", into error: My Kinda Town Ltd. v Soll [1983] RPC 407 at 415-416. If the answer were in the affirmative, then the phrase would have acquired a "secondary meaning", even though this did not exclude or supplant the primary meaning of the collocation of the words as a matter of ordinary English usage: James Watt Constructions Pty. Ltd. v Circle-E Pty. Ltd. [1970] 3 NSWR 481 at 489-490, where the phrase in question was "Barrier Beam" used in relation to an electronic security apparatus. Accordingly, 1t was true to say of the plaintiff ain the Office Cleaning Case that it was not necessary in order for 14. it to succeed to show that the phrase in question had acquired a "secondary meaning" in the sense that it had ceased to describe the services rendered or goods supplied. But, as I have endeavoured to explain, that is not to say that the decision is authority for the proposition that a passing-off action is available to protect a trade name that has not become distinctively associated with the products or business of the plaintiff. After all, it was Lord Simonds who, speaking on a later occasion, said that it was necessary for a plaintiff, as a condition precedent to the success of a passing-off action, to establish the distinctiveness of the name used by the plaintiff: T. Oertli A.G. v E.J. Bowman (London) Ltd. [1959] RPC 1 at 4. The reason for this in terms of principle 1s not hard to find. An essential element of the tort of passing-off is the making of a misrepresentation: Erven Warnink B.V. v J. Townend & Sons (Hull) Ltd. [1979] Ac 731 at 742, 755-756; Moorgate Tobacco Co. Ltd. v Philip Morris Ltd. (No. 2) (1984) 156 CLR +414 at 445. This may be effected by a direct statement by a defendant that certain goods or services (in fact those of the defendant) are the goods or services of the plaintiff. Such direct statements will be unusual. Perhaps the most celebrated would be the advertisement by a publisher of poetry as that of Lord Byron (Lord Byron v Johnson (1816) 2 Mer. 29; 35 ER 851). More frequently, the defendant effects the alleged misrepresentation by using, to identify his goods 15. or services, some word, device or other indicium or "badge" which is distinctive in the necessary sense of the goods or services of the plaintiff. In the hands of the plaintiff, this "badge" or common law trade mark or name is a vehicle for communication of the information that the goods or services put out by him are indeed his goods or services (H.D. Bulmer Ltd. and Showerings Ltd. v J. Bollinger S.A. [1978] RPC 79 at 94-95). -* In the hands of the defendant, this badge is the vehicle for effecting the misrepresentation which is the gist of passing-off. If the badge is not distinctive in the necessary sense, then the use of it by the defendant will not effect the misrepresentation of which the plaintiff complains. Of course, in what perhaps is the vast majority of cases, the defendant does not precisely reproduce the badge of the plaintiff. Rather, something of debatable similarity 15 used, and the issue becomes one of whether the trade mark or trade name used by the defendant 1s sufficiently close to that of the plaintiff to enable one still to say that the misrepresentation of which the plaintiff complains is or will be effected. Where the common law trade mark or name relied upon by the plaintiff comprises a descriptive word or phrase, then, as many authorities indicate, it will be difficult, albeit not impossible (B.M. Auto Sales Pty. Ltd. v Budget Rent A Car System Pty. Ltd. (1976) 51 ALJR 254 at 257-258), for the 16. plaintiff to show the necessary distinctiveness in the manner I have described. However, where the defendant has not himself used the phrase in question but something similar to it, then the effect of the authorities, exemplified by the Office Cleaning Case itself, 1s that small differences may suffice to negative the likelihood of deception. (One result of this special treatment of descriptive words has been a number of decisions classifying names as either "descriptive" or "fancy"; see e.g. John Engelander & Co. Pty. Ltd. v Ideal Toy Corporation (1981) 54 FLR 227 at 232; R. & C. Products Pty. Ltd. v Hunters Products Pty. Ltd. (1988) ATPR 40-839.) As a qualification to these principles, it is then said in the authorities that the Court nevertheless will incline in favour of finding that, whilst not identical to that of the plaintiff, the defendant's name or mark is sufficiently close so to trespass upon the rights of the plaintiff, if the defendant has acted to take advantage for itself of the plaintiff's goodwill. Such a case was Australian Guarantee Corporation Ltd. v Sydney Guarantee Corporation Ltd. (1951) 51 SR (NSW) 166 at 170-171, where Roper C.J. in Eq. said: The question whether the promoters [sic] of the defendant company, in adopting the particular name, acted fraudulently, in the sense that they chose it in the hope or expectation of deriving a benefit from its resemblance to the plaintiff's name, in that the defendant would or might be confused with the plaintiff and would or might acquire something of the plaintiff's business reputation, 1s a relevant one, 17. because, although such fraud does not of atself establish a cause of action, the court, 1f£ such fraud existed, would readily infer that the promotors, who know the field of business well, were justified in entertaining the hope or expectation and it was therefore probable that the plaintiff would suffer damage. See also Wilson v Samuels (1913) 13 SR (NSW) 394 at 398-399; Australian Woollen Mills Ltd. v F.S. Walton & Co. Ltd. (1937) 58 CLR 641 at 657-658; Con-Stan Industries Pty. Ltd. v Satinique Corporation Pty. Ltd. (1969) 91 WN (NSW) 563 at 574-575. However, as is apparent from the terms in which Roper C.J. in Eq. expressed the principle, it 1s no substitute for the primary requirement that the plaintiff show the necessary distinctiveness or reputation in respect of the trade mark or name of the plaintiff. Mere proof of fraudulent intent cannot of itself be enough. It must be possible on the whole of the evidence, including the evidence of fraud, to infer the likelihood of success of the fraud: Ronson Products Ltd. v James Ronson Pty. Ltd. (No. 2) [1957] VR 731 at 739-740. This is because, as Lord Greene MR made plain in Plomien Fuel Economiser Coy. Ltd. v National School of Salesmanship Ltd. (1943) 60 RPC 209 at 215-216, when considering the significance of fraud in this particular field one 1s dealing not with a rule of substantive law, but with inferences open on the evidence in particular cases. Further, the Court must be on 18. its guard against finding fraud merely because there has been an imitation of the goods of the plaintiff or of the get-up or of the trading methods or style of the plaintiff: Cadbury~-Schweppes Pty. Ltd. v The Pub Squash Co. Ltd. [1981] RPC 429 at 493-494. Counsel for Coles Myer placed much reliance upon this authority. It is against this setting that I come to a further passage in the speech of Lord Simonds in the Office Cleaning Case upon which reliance 1s placed by counsel for Telmak. His Lordship said (63 RPC at 42): Secondly I observe that here there 1s in the Respondents' choice of name no improper or sinister motive. The learned judge found that they did not intend to cause confusion between their business and that of the Appellants by dropping the word "West-— minster". This is not a matter of conclusive importance. Confusion innocently caused will yet be restrained. But 1f the intention to deceive is found, it will be readily inferred that deception will result. Who knows better than the trader the mysteries of his trade? For myself, I find the Respondents explanation of their action e. satisfactory. The issue in that case, resolved favourably to the defendant both in the Court of Appeal and in the House of Lords, was whether "Office Cleaning Association" used by the defendant since 1942 1n lieu of the previous style of "Westminster Office Cleaning" was sufficiently different from "Office Cleaning Services" (used for many years by the plaintiff) as to avoid 19. passing-off. The case for the plaintiff would have been strengthened if it had satisfied the Court that the defendant had discarded the word "Westminster" with a sinister purpose. But, as the passage I have cited indicates, the plaintiffs did not succeed on that issue. Nothing said by Lord Simonds departed from well recognised doctrine concerning the role of fraud in this type of case. In particular, his Lordship was not saying that proof of fraud per se would have sufficed. Accordingly, in my view, there is nothing in the Office Cleaning Case to support the proposition advanced by counsel for Telmak that a phrase used by a defendant to identify its goods or services and with an intention to mislead or deceive will be enjoined, even if the phrase has not become distinctively associated with the product or business of the plaintiff. However, I should emphasise that what I have said as to the role of fraud in a case such as the present has to be understogd in a wider context. Fraud is a concept of continued significance in the substantive law of passing-off, given the origins of the tort as an action at law in deceit before equity intervened to protect goodwill by injunction even without proof of fraud; see generally, Shanahan, "Australian Trade Mark Law And Practice", pp. 316-318. It is of course an added burden to a plaintiff to prove fraud but if this is done, the result may be to widen the scope of relief. That is to say, in some 20. cases conduct by a defendant may be enjoined only if fraud is proved. What are these cases? They fall into perhaps two classes. First, where the plaintiff has a local reputation based on international rather than local business activities, an intent to take advantage of that reputation may render a defendant liable despite the lack of local business goodwill; see 10th Cantanae Pty. Ltd. v Shoshana Pty. Ltd. (1988) ATPR 40-833 at 48,998-49,002. Secondly, by what appears to be a distinct cause of action, 1t was held in John Walker & Sons Ltd. v Henry Ost & Co. Ltd. [1970] RPC 489, that a tort was committed in England by the sale there of bottles and packaging to be used, to the knowledge of the defendant, in Ecuador for the sale of spurious Scotch Whisky, there being a significant reputation for the genuine liquid both in England and Ecuador; if the defendant had had no knowledge of the improper use in Ecuador, there may have been no liability (see {1970] RPC at 508-509). But in each of these categories, the fraud does not substitute for the existenge of a reputation giving rise to misrepresentation. When the issue is one of reputation, then the existence of a fraudulent intention is of evidentiary rather than substantive significance, as is indicated by the authorities I have already discussed. Counsel for Telmak relied upon the decision of Hardie Boys J. in Shotover Gorge Jet Boats Ltd. v Marine Enterprises 20. cases conduct by a defendant may be enjoined only 1f fraud 1s proved. What are these cases? They fall into perhaps two classes. First, where the plaintiff has a local reputation based on international rather than local business activities, an intent to take advantage of that reputation may render a defendant liable despite the lack of local business goodwill; see 10th Cantanae Pty. Ltd. v Shoshana Pty. Ltd. (1988) ATPR 40-833 at 48,998-49,002. Secondly, by what appears to be a distinct cause of action, 1t was held in John Walker & Sons Ltd. v Henry Ost & Co. Ltd. [1970] RPC 489, that a tort was committed in England by the sale there of bottles and packaging to be used, to the knowledge of the defendant, in Ecuador for the sale of spurious Scotch Whisky, there being a significant reputation for the genuine liquid both in England and Ecuador; if the defendant had had no knowledge of the improper use in Ecuador, there may have been no liability (see [1970] RPC at 508-509). But in each of these categories, the fraud does not substitute for the existenge of a reputation giving rise to misrepresentation. When the issue is one of reputation, then the existence of a fraudulent intention is of evidentiary rather than substantive significance, as is indicated by the authorities I have already discussed. Counsel for Telmak relied upon the decision of Hardie Boys J. 1n Shotover Gorge Jet Boats Ltd. v Marine Enterprises 21. Ltd. [1984] 2 NZLR 154 as involving some acceptance of his propositions as to what flowed from the Office Cleaning Case. Hardie Boys J. held that there was a serious question of passing-off to be tried and awarded interlocutory relief to the plaintiff which since 1970 had operated a tourist jet boat service on a particular stretch of river under the name "Shotover Jet". The defendant was operating a similar service on the same stretch of river using the style "Lower Shotover Jet". His Honour (at 158-160) considered the Office Cleaning Case and appears to have taken it as meaning that a plaintiff might succeed in respect of a common law trade mark containing descriptive words, even though the plaintiff could not show that the words identified exclusively business operations conducted by the plaintiff. However, it also appears (from p. 158) that his Honour was of the view that there was at least a serious question to be tried as to whether or not the plaintiff had built up a goodwill over thirteen years by use of the name "Shotover Jet" to describe its operations. His Honour therefore is to be understood as saying that it was no bar to interlocutory relief for the defendant to contend that despite this goodwill the plaintiff had not succeeded in displacing absolutely the otherwise descriptive nature of the words. To none of this, with respect, might exception be taken. fThis is not a case in which the Court proceeded on the basis that a plaintiff might succeed in the absence of the establishment of distinctiveness or reputation founding goodwill. 22. The applicant also submitted that the same result as to the significance of intention obtained if the present case were viewed from the vantage point of s. 52 of the TP Act. He submitted that there would have been contraventions of that provision if the respondent had used the expression "dry-fry convection oven pan with lid" either (a) with an intention to mislead or deceive or (b) in circumstances where the expression had become distinctively associated with the applicant's product or business. Again, I draw attention to the disjunction between propositions (a) and (b). As with passing-off, misrepresentation or _ the likelihood thereof is deeply involved in the statutory action; the terms of s. 52 speak of conduct misleading or deceptive or likely to mislead or deceive. How would this occur in a case such as the present? The answer given in numerous decisions, commencing with Weitmann v Katies Ltd. (1977) 29 FLR 336 at 339-340 (which was approved by Bowen C.J. and Franki J. in Brock v Terrace Times Pty. Ltd. (1982) 56 FLR 464 at 466-467) is that *the principles as to distinctiveness and secondary meaning as developed in the passing-off cases are of assistance in determining whether the conduct in question is likely to have the misleading or deceptive effect of which complaint is made. Without establishing distinctiveness in the sense I have described, the applicant will fare no better with its case under s. 52 than with that for passing-off. 23. Nor would the presence of a malign intention of the nature I have described fill the gap in the s. 52 case. Such an intention generally is not a necessary element in s. 52 cases, with the significant qualifications (not here relevant) discussed in the authorities collected in Elders Trustee & Executor Co. Ltd. v E.G. Reeves Pty. Ltd. (1987) 78 ALR 193 at 242, paras. (4) and (5). However, in those s. 52 cases which are analogous to passing-off cases, the existence of an intention of the nature alleged here against Coles Myer may be of similar significance: cf£. Rhone-Poulenc Agrochimie S.A. v UIM Chemical Services Pty. Ltd. (1986) 12 FCR 477 at 488 per Bowen C.J., at 503-504 per Lockhart J; Bridge Stockbrokers Ltd. v Bridges (1984) 4 FCR 460 at 475 per Lockhart J. But in the end, the existence of the intention alleged against the respondent will not by itself carry the day under s. 52. I say this in full awareness that whilst passing-off has 1ts objective the protection of private rights in goodwill, s. 52 has a different focus. I also appreciate that whilst passing-off is concerned with the probability of deception rather than some lesser state described as "confusion" (Turner v General Motors (Aust.) Pty. Ltd. (1929) 42 CLR 352 at 362; Totalisator Agency Board v Turf News Pty. Ltd. [1967] VR 605 at 606; cf. Parker-Knoll Limited v Knoll International Ltd. [1962] RPC 265 at 276, 285, 289), s. 52 may (and to my mind does) introduce some refinement as described by Lockhart J. in Bridge Stockbrokers Ltd. v Bridges (1984) 4 FCR 460 at 474-475. 24. (Moreover, with respect to both causes of action, 1t should not be overlooked that, particularly on an interlocutory motion, evidence of confusion may be relevant as evidence from which deception or likely deception may be inferred: Park Court Hotel Ltd. v Trans-World Hotels Ltd. [1970] FSR 89 at 90; My Kinda Town Ltd. v Soll [(1983] RPC 407 at 415-416, 421-422, 433-434). However, the immediate point is that in the particular aspects I have been discussing, there is a fairly close affinity between the two actions, with the result that the applicant's proposition does not succeed on either footing from which it was propounded. Accordingly, I have approached the present case in both its aspects by asking whether Telmak has shown distinctiveness or reputation in the expression concerned, bearing in mind that in doing so Telmak may succeed even though it has not excluded or supplanted the primary meaning of the collocation of words. As I have indicated, I conclude that Telmak has failed to make out its case, either for passing-off or for contravention of s. 52 of the TP Act. However, notwithstanding the conclusion I have reached as to the law, I should consider whether the evidence bears out the case which the applicant seeks to make on intent. In order to do so, it 1S necessary to consider some general matters of background. From that consideration, the conclusion which I have reached on the issue of distinctiveness 2s. also may be reinforced. In 1977, one Albert Schawalder applied in Switzerland for a patent in respect of a cooking pan in the base of which an internal depression (described by counsel in this case as a tower or funnel) was provided for the admission of heat into the pan. The advantage of the pan was said to lie in the fact that less fat would be needed for cooking, the contents being cooked by the admission of heat through the tower or funnel by holes or other air permeable means. United Kingdom patent application No. 2,005,531, based on this application, was filed on 3 October 1978 and a copy of the British specification became open to public inspection in the Patent Office Library un Canberra on 9 October 1979. On 3 July 1981, Telmak Teleproducts Pty. Ltd. made an application under the Designs Act 1906 for a registered design in respect of a cooking vessel, which appears to be a dry fry pan. Registration was granted on 9 March 1982 and is still in force. No claim was made for unfringement of the registered design in these proceedings. From 1980 to 1983, Telmak sold as a "Dry-Fry Convection Pan" a product having as a feature what in the evidence was called a funnel, tower or dome, in the centre of the base of the pan, with holes on the flat top of the depression or tower, for admission of air. The packaging of the example in evidence bears the words "As Seen On TV" and 26. "Telmak". The supplies of the product were obtained by Telmak from manufacturers both in Australia and overseas. The packaging was designed in the United Kingdom by Mr. Colin Rose, the principal of a company Topaz TeleProducts Ltd., which had its registered office in Great Missenden in Buckinghamshire. During the course of 1981, Mr. Hammer, presently the Chief Executive of Telmak, redesigned the packaging of the product which was then described as "Dry-Fry Convection Pan with Lid". The product in this packaging was sold between 1981 and 1983. In April 1982, Mr. Hammer received a letter with enclosures from Mr. Rose of Topaz TeleProducts Ltd. concerning anew product. This gave what was said to be a better cooking effect than with the dry pan, and was constructed so as to increase the air for cooking. The central tower, dome or funnel was removed, giving the base of the pan essentially a flat surface. The entrance and circulation of air was achieved by other means. Mr. Rose described the product as the "air pan" and enclosed a brochure which contained the following, descriptive material: USE as a DRY FRY PAN USE as an OVEN for baking - cakes - and even bread! I draw attention to the use of the word "oven". Mr. Hammer, in his evidence, said that the air pan had 27. very much influenced the design of the current Telmak product. The air pan operated in a manner very similar to the current product but had special features of a considerable number of holes in the lid as well as a removable ring that could be anterchanged with a number of fry pans normally held in the household. In April 1983, a company in the Grace Bros. group sent out to account customers a brochure offering for sale by mail order a product described as "the dry fry convection pan". As a result of the distribution of the brochure, Grace Bros. sold approximately 9,000 units of the product at a price of $29.95 plus $3.00 to cover postage. The brochure shows the product containing the central tower or dome. Later, in 1985, Grace Bros. sold 1,200 units (at a price of $39.95) of the "Elite Dry Fry Pan with all the features". Again, this product utilised the central dome or tower. All these dry fry pans sold by Grace Bros. were purchased by it from a New South Wales company which imported its supplies. In 1984, advertisements also appeared in the national magazine "Womans Day" offering for purchase by mail (for $19.95 plus $2.75 postage) a "Lo-Cal Fryer". This also featured the special "convection tower" and the advertisement stressed the advantages of "convection cooking" as avoiding the use of "boiling in oil". The supplier was stated in _ the advertisement to be Bond International Pty. Ltd. of Sydney. 28. Further advertisements for the "Lo-Cal Fryer" appeared in Magazines in 1984. In the period August - October 1984, advertisements also appeared in newspapers and magazines for what was described as an "amazing new slimmers fry pan". The product depicted in the advertisement appears closely to resemble the "Lo-Cal Fryer". Some of these advertisements solicited purchase by mail order and stated "Similar pans advertised elsewhere at $29.95 yours for only $10 plus free gift". Others stated "Advertised on TV for $29.95". The supplier was identified as "Mailex International" of Manly, New South Wales. The free gift was recipe cards from "Weight Watchers". The pan was described as being a "convection fry-pan". Mr. Campbell, to some of whose evidence I have already referred, is a director of a company which, under the businessname "Harbenware Australia", has been distributing a variety of products manufactured in England by Harbenware Ltd. In 1984,, his company acquired the exclusive distribution in Australia of all products manufactured and sold by Harbenware Ltd. The products involved included a dry funnel pan with a perforated funnel in the middle of the kind previously described. In December 1983, Mr. Campbell had become aware that Harbenware Ltd. manufactured a second model of dry fry pan, but with a flat base without a perforated funnel in the middle of the pan. Air was admitted through holes in the lid 29. and through eight spaces, each of about 7 cms. in length placed around the upper rim of the pan. The first container load of the second Harbenware pan arrived in Australia in about August 1984. Since that date Mr. Campbell's company has sold approximately 35,000 units throughout Australia. Those sales have been attracted by direct marketing from stands and similar venues such as shopping centres, shows and exhibitions. The product was advertised in a number of national publications from about August 1984. The last advertisement appears to have been some 6 months ago and Mr. Campbell presently has only about 300 left in stock. The last shipment he received was in late 1986; there were something under 3,000 units in it. In some of the Harbenware advertisements placed by Mr. Campbell expressions are used such as "1t cooks like an oven but with no fats or oil". The expression "the amazing new Dry Oven Pan" was also used in advertisements and the expression "Dry Oven Pan" was prominently featured on some of the packaging. Further, reference is made in promotional material to Swiss patents and to the introduction by Harbenware of dry pan cooking. When he was attending the Royal Easter Show in Sydney in 1986, Mr. Campbell became aware that Telmak was advertising a dry fry pan which appeared to him to closely resemble the second Harbenware pan. The differences were that the knob on the lid was in a different position and the Telmak product also had holes in different situations. Further, the handle on the 30. pan was of a different appearance. It is necessary to return now to Easter 1984. At the Royal Easter Show in 1984, Mr. Hammer saw the second Harbenware pan. Later in that year, he visited Wing Root Ltd. in Hong Kong. Mr. Hammer denied that what occurred was the giving of instructions to the Hong Kong company which were transmitted by it to the manufacturer Davidcraft Korea 1n Seoul, to copy the Harbenware product. However, on any footing, the Harbenware product played a part in the manufacturing process of what became the Telmak product for which it seeks protection in the present proceedings. In the course of his cross-examination, Mr. Hammer said: The actual procedure that occurred was that we made a hand made sample and sent it to Hong Kong. We also sent photographs of the Harbenware one to Hong Kong and our initial product was modified to use what we considered would be the most efficient method with which to produce the heat transference. On 2 May 1985, Telmak placed an order with Wing Root Ltd. for the manufacture of an initial quantity of 5,000 units, with the objective of television advertising later in 1985 and early in 1986. Shortly before this, in March 1985, Coles Myer had ordered from Taiwan supplies of a dry fry pan. Sales were not 31. up to expectations and Coles Myer lost further interest for the time being in such a product. Early in 1986, Telmak commenced to advertise the Telmak product the subject of these proceedings. The television advertisement I have described has since been shown throughout Australia on at least 2,000 occasions. Mr. Hammer gave evidence that he coined the expression "Dry Fry Convection Oven Pan With Lid" and said that when he did so, he had been aware of use of "dry-fry", but not "oven pan" or "convection oven pan". However, Mr. Rose, in 1982, had described his air pan to Mr. Hammer as suitable for use as an oven, and the Harbenware product seen by him at Easter 1984 had been promoted as a "Dry Oven Pan". The effect of convection had been described in much publicity over the years. The result of these particular circumstances, as well as of the history of the promotion and sale of other products in the field, emphasises the essentially descriptive nature of the style selected by Mr. Hammer for the Telmak product. Given all : this, it, is not surprising that the Telmak case on distinctiveness does not succeed. In September 1987, Mr. Stapleton, the Controller of Kitchenware and Plasticware for all K-Mart, Super K-Mart and Coles stores operated by the respondent, visited Taiwan on a buying trip. He had an open brief with limits only of the total amount of money that was at liberty to commit. On these 32. trips, he buys, on the average, 200 new products. He gave evidence that at this time he was unaware of the Telmak product. He was aware of dry fry pans 1n a general sense in view of the unsatisfactory experience his company had had in 1985 at which time he had been a buyer of kitchenware and plasticware products responsible to his predecessor as Controller of Kitchenware and Plasticware. At any one time, there are about 2,000 products stocked by that department. In Taiwan, Mr. Stapleton met representatives of the respondent's buying agent in Taiwan, Union Group Corporation. They showed him a sample of a new design for a dry fry pan. Mr. Stapleton expressed some reluctance in view of the previous experience but agreed to try a small quantity because he thought this item would "fit in well" with a promotion for winter cooking which was then scheduled to start on 30 May 1988. He agreed in cross-examination that the functional parts of the product which he ordered are basically identical with the Telmak product, there being cosmetic differences only. On this 'rip, he placed in Asia orders for about 150 lines, his trip being not only to Taiwan. In his presence, and on the form of G.J. Coles & Company Ltd., a buying order was completed and placed upon Tierra Co. Ltd. of Taipei, Taiwan. The date shown thereon 1s 5 September 1987. The number of items ordered was 3,600, the shipping date 2 March 1988, and the shipping schedule indicated 33. that 1,368 were to go to Melbourne, 1080 to Sydney, 756 to Brisbane, and 396 to Fremantle. The article was described as "non stick dry fry pan". Written on the form are the words "Promote June CAT". I accept Mr. Stapleton's evidence that his buying schedule was such that the objective was that this product be promoted by the catalogue that was scheduled to appear in the ordinary course at the beginning of June 1988. The form also indicates that the art work and a sample product complete with packing were required for approval by Mr. Stapleton's company before shipment took place from Taiwan. I accept Mr. Stapleton's evidence that he did not go to Taipei with any proposal involving the copying of the Telmak product. In October 1987, Mr. Boucher, a kitchenware buyer of K-Mart Stores, was approached by Mr. Recsei, the General Manager of Telmak, with the responsibility for marketing and selling of the Telmak product range. On 20 October 1987 he met Mr. Boucher in Melbourne and discussed the possible purchase by Coles Myer of the Telmak product. Coles Myer had sold other Telmak products and its officers knew of the use of television to advertise Telmak products. Mr. Recse1 left with Mr. Boucher a written proposal to include details of television advertising and specified a store cost of $29.96 and a consumer price of $39.95. On 26 October, Mr. Recse1 wrote to Mr. Boucher stressing: A) Our high-impact saturation T.V. advertising generates you incremental 34. sales. B) Our advertising strategy and subsequent TV campaigns convert previous non-users to new user sales, hence we grow [sic] the market. Research has proven we complement your sales volumes. Cc) You achieve the sales, profit and TV exposure (with tagging) at no risk. D) You only pay for the goods sold after you have literally banked the takings. We also have media booked in Perth for the week commencing 13th December, 1987 to 3rd January, 1988 which will further enhance the national T.V. coverage. Mr. Recsei had given to Mr. Boucher a sample of the packaging of the Telmak product. On the back of the letter of 26 October 1987, which is in evidence, there 2S written in unidentified handwriting the words "No interest as conflicts with our current commitments in this merchandise category". On the page of the facsimile transmission form from Telmak to Coles Myer to which preceded the letter of 26 October, there is also written in handwriting "order placed o'seas 5/9/87". 'ar. Boucher had a conversation with Mr. Stapleton and then in response to a telephone call from Mr. Recsei told him that the Telmak dry fry pan was too expensive, and that the merchandising budget of Coles Myer was already committed in relation to other products. Mr. Boucher had shown Mr. Stapleton the packaging for 35. the Telmak product that had been left with him by Mr. Recsel. In para. 9 of an affidavit sworn by Mr. Stapleton in these proceedings on 7 June 1988, he deposed: It did not occur to me at the time Mr. Boucher showed me the packaging for the Telmak dry fry-pan that Telmak could claim any exclusive rights to the words "dry fry convection oven pan with lid" ... The words "dry fry" are commonly understood as teferring to a pan which requires little or no oil. The words "convection oven" also indicates [sic] that the pan functions like an oven with the heat circulating around the food within the pan. In the course of cross-examination, Mr. Stapleton said that when he examined the packaging he looked only at the photographs of the product, and did not pay any regard at all to the wording. He denied that he turned his mind at that time to any entitlement of Telmak in relation to the words "dry fry convection oven pan with lid". However, I have reached the conclusion that Mr. Stapleton did examine the packaging for the purpose of making a comparison between the product and description found on the packaging and the product he had ordered the previous month in Taiwan, all with a view to reaching the decision which he communicated to Mr. Boucher for transmission to Mr. Recse1 that Coles Myer was not interested in purchasing the Telmak dry fry pan. Although, in general, I accept Mr. Stapleton's evidence, there were occasions where his memory appeared to 36. contract, expand or otherwise respond to what he perceived to be in the witness box an attack upon him or the interests of his company. This was one such occasion. The conclusion I have so expressed was influenced by his demeanour as well as his answers. It 1s also consistent with the terms of his affidavit. I should add that whilst there does appear in the discussions and correspondence between Messrs Boucher and Recse1 to have been general concern as to the marketing of the Telmak product, the primary object of Mr. Recsei's proposal appears to have been sales in Perth and he was at pains to emphasise that a television promotion had been booked in Perth for the period 13 December 1987 to 3 January 1988. Mr. Boucher had the task of approving the sample art work provided from Taiwan. This arrived after the events of October, either in December 1987 or January 1988. The sample art work was not in evidence. The packaging showed the word "pain" tafher "pan" and Mr. Boucher instructed the Taiwanese buying agent to make sure that this was corrected. The agent undertook to do so but when the supplies later arrived in Australia, it became apparent that the matter had not been rectified. In the course of Mr. Boucher's cross-examination, the following transpired: 37. Of course, you know, do you not, that the exact words - the name of your product 1s exactly the same on the box as the Telmak product? --~- That transpires now. It did not register at the time, of course. Why "of course", Mr. Boucher? --- No reason. What I am saying is it did not register at the time. I was adversely impressed by Mr. Boucher's demeanour during cross-examination on this topic. Mr. Boucher gave evidence which in general I accept, but on this issue I believe his recollection was distorted by a desire to assist the interests of his company's case. I find that he did still have in mind the draft packaging given him by Mr. Recsei in October and the language on that packaging. On 17 February 1988, Mr. Stapleton notified the Advertising Department of Coles Myer that the K-Mart dry fry pan was to be advertised in the catalogue for the week commencing 30 May 1988. The written notification described the product as "Non stick dry fry pan slate blue or red" and, as I have indicated, in the brochure as it eventually appeared, the description was "Non stick dry fry pan for easier cooking. Choice of blue or red". The estimated sales were shown as 2,500 units. The wording on the draft packaging was not used. Mr. Stapleton gave evidence, which I accept, that his first recollection of seeing television advertising for the Telmak product is 1n Melbourne on two occasions in June 1988, 38. that is to say after the commencement of the present proceedings. He may have seen it before, but could not recollect doing so. In my view, Mr. Stapleton did not act in any way over this period which indicates that the labelling of the Coles Myer product was either devised by him or adopted by him after it was devised in Taiwan, with a view to his company deriving or possibly deriving a benefit from the circumstance that the words "Dry-Fry Convection Oven Pan With Lid" appeared on the Telmak product. I have found that he did examine the Telmak packaging, but accept that he regarded the expression in question as containing descriptive elements commonly understood as such. That is not to say Mr. Stapleton was unconscious of the advantage of marketing a product that closely resembled the Telmak product in appearance and function. But when in February 1988 he notified the advertising department of the description of the product, it was not with the cumbersome phrase on the Telmak box, but with the words "non stick dry fry pan". "1 might add that the "non-stick" element in this description is not given any such specific force in the Telmak expression. In these circumstances, Mr. Stapleton lacks the necessary intention for attribution to Coles Myer so as to satisfy Telmak's proposition of law concerning intent, namely that because Coles Myer used exactly the same words to describe its product, the correct inference 1s that 1t intended by this means to mislead or deceive the public into believing its 39. product was that of Telmak. In March 1988, whilst the Coles Myer product was on the water, Mr. Recsei again visited the offices of K-Mart in Melbourne. He tried to see Mr. Boucher but he was unavailable. He spoke to Mr. Edwards, Mr. Boucher''s assistant. He said that Telmak was prepared to offer K-Mart an exclusive TV promotion in Perth provided K-Mart was prepared to give a committed order. Mr. Edwards said he would have to speak to Mr. Boucher. On 12 April 1988, Mr. Recsei had a telephone conversation with Mr. Boucher who said that K-Mart had decided to commit a firm order for the fry pan as long as K-Mart got "the exclusive tag for Perth". On 22 April 1988, Mr. Recsei received from the respondent an order for 750 of the Telmak product on a sale or return basis. Telmak shipped approximately 750 units to the designated K-Mart stores in Perth metropolitan area. Mr. Boucher says that he accepted the Telmak proposal because "it could not result in any loss to Coles Myer". Television advertising in Perth occurred on 15 occasions between 29 May and 3 June 1988. There is some dispute as to when the 750 units were in fact received, and as to the necessity for the exclusive tagging of the television advertisement shown 1n Perth. It is not necessary to resolve these issues of fact. The point is that 1n March 1988, Coles Myer knew that 1t would be selling an almost identical competing product at a much lower price which 40. was heavily promoted by Telmak on television. The K-Mart fry pans arrived in the Perth warehouse on 20 April 1988, that is to say two days before the receipt of the order for Mr. Recsel. The K-Mart fry pans were delivered to the Western Australian stores in the first week of May and thereafter most of the remaining stock was despatched to other States. It was placed in approximately 140 stores operated by Coles Myer. Mr. Boucher gave evidence that he "did not connect" the two products, probably because the differences in price led him to classify them in his mind as different items. He denied that the real reason for placing the order with Telmak was to take advantage of the television campaign planned for Perth. These are further instances in which I regard Mr. Boucher's evidence as unreliable. I find he did have in mind, in placing the order for the Telmak product, the advantages of the television promotion in attracting potential purchasers of dry fry pans into Coles Myer stores where there was also to be available a dry fry pan at a much cheaper price than that for the Telmak product. But that is not to say that the applicant adopted or acquiesced in the adoption in Taiwan of the same expression on the packaging as that appearing on the Telmak product so as by this means to mislead or deceive the public into believing the Coles Myer product was that of Telmak. To Mr. Boucher, the attractive force that would bring in custom to Coles Myer stores was not the wording on the 41. Telmak packaging, but the appearance and function of the goods (they answering the admittedly generic description of dry fry pans) and the effect of advertising on television. Again, therefore, Telmak has failed to establish the necessary factual basis for its submissions that Coles Myer adopted for its product packaging the same wording as appeared on the packaging of the Telmak product (in the words of Roper C.J. in Eq. which I have cited earlier in these reasons) in the hope or expectation of deriving a benefit from that circumstance. The result is that even on the basis that the applicant's legal propositions should be accepted, the proceedings by the applicant should be dismissed. I should add that there was some suggestion on the evidence that the Coles Myer product was inferior to that of Telmak in quality and utility. This was not really tested by cross-examination. Were it necessary to do so, I would have found for Coles Myer on the issue. As regards the s. 52 proceedings, a serious question would then have arisen as to whether it would be proper te give injunctive relief under s. 80 of the TP Act. It 1s not 'to be thought as necessarily in the public interest to restrain one trader at the suit of a competitor from supplying to the public goods of like quality and utility but at a much reduced price to those of the competitor. I refer, by way of illustration, to the evidence of Mrs. Ticker, which f have earlier described. Different considerations obtain ina passSing-off suit to protect the private rights of the a8 42. applicant. What I have said also makes 1t unnecessary to deal with the difficult question as to remedy that would have been raised had the applicant succeeded under s. 52. In addition to injunctive relief, the applicant sought an account of profits made by the respondent. The account of profits, of course, would be a suitable remedy in passing-off and there would be no difficulty in awarding such a remedy in this Court in proceedings in the accrued jurisdiction, in the same way as an order of exemplary damages may be awarded in a suitable case under the general law which is dealt with in the accrued jurisdiction: Musca v Astle Corporation Pty. Ltd. (1988) ATPR 40-855 at 49,226~-49,227. But, as the same case illustrates, there 1s a difficulty in an award of a pecuniary remedy under either s. 82 or Ss. 87 of the TP Act which is not compensatory in character; an account of profits made by a defendant may differ in quantum and in legal character from the recovery of damages for loss suffered by an applicant: Colbeam Palmer Ltd. v Stock Affiliates Pty. Ltd. (1968) 122 CLR 25 at 32, My Kinda Town Ltd. v Soll [1982] FSR 147, reversed on other grounds {1983] RPC 407. There remains for consideration the cross-claim. The present proceedings were commenced by Application filed 3 June 1988. The Application was returnable before the 43. Court on 7 June 1988. The parties appeared before Lockhart J. on 7 and 8 June 1988. The Court accepted certain undertakings and gave directions for an early final hearing. The respondent undertook to the Court that by noon on 8 June, it would distribute by facsimile transmission, or other appropriate means, to each of its stores to which the K-Mart dry fry convection oven pans with lids had been distributed an unstruction that stocks be withdrawn immediately from sale until further instructions were given. On or about 22 June 1988, the applicant's public relations firm, Immedia Publications Pty. Ltd., after consultation with Mr. Hammer, 1Ssued a press release concerning the proceedings. Legal advice was not received before the press release was issued. The press release made a number of statements as to the nature and present standing of the proceedings which were plainly incorrect. The solicitors for the respondent, by facsimile, transmission, wrote to the solicitors for the applicant detailing nine specific complaints as to the terms of the press release. On the same day, the applicant instructed its public relations consultants to withdraw the release and to request the persons to whom the release had been circulated not further to publish any aspect of it. Some parts of the initial press release were repeated in an article in the "Canberra Times" newspaper which appeared on 24 June 1988. 44. The respondent on 8 July 1988 filed in the present proceedings a cross-claim against the applicant alleging that the publication of the initial press release was conduct which contravened s. 52 of the TP Act. This matter was not dealt with in any great detail at the trial. In my view, the cross—claimant 1s correct in that there was contravention of s. 52, but the submissions of the cross-respondent also are made out, namely that the evidence shows that there 1s no threat of any repetition of such conduct and that there 1s no evidence that any loss or damage has been suffered by _ the cross-respondent. The power to grant injunctive relief under s. 80 of the TP Act is, of course, not limited to cases where there is an apprehended threat of repetition. Nevertheless, that 1s a significant factor to be taken into account. In my view, in all the circumstances of the case, the appropriate order would be that the cross-claim should be dismissed, but that the cross-respondent should pay the cross-claimant's costs of the cross-claim. As I have indicated, the principal proceedings are dismissed. The applicant should pay the costs of the respondent. I certify that this and the forty three (43) preceding pages are a true copy of the Reasons for Judgment of his Honour Mr. Justice Gummow. Associate: Date: Counsel and Solicitors for Applicant: Counsel and Solicitors for Respondent: Dates of Hearing: Date of Judgment: 45. AOI Ka g 5 August 1988 A. Sullivan instructed by Moray & Agnew D. Catterns instructed by Freehill, Hollingdale & Page 25, 26 and 27 July 1988 5 August 1988