FEDERAL COURT OF AUSTRALIA Red Bull Australia Pty Limited v Sydneywide Distributors Pty Limited [2001] FCA 1228 N 197 OF 2001 SUMMARY In accordance with the practice of the Federal Court in certain cases of public interest, I have prepared this brief summary to accompany the Reasons for Judgment that are being delivered today. This summary is necessarily incomplete. The only authoritative pronouncement of my reasons is that contained in the full Reasons for Judgment. The proceedings brought by the abovenamed Applicant Corporations (Red Bull) against the abovenamed Respondents (Sydneywide and Mr Klimis respectively) are for injunctions (inter alia) to restrain Sydneywide from passing off the product LiveWire in its present packaging in 250ml cans and 330ml bottles as the product of Red Bull, and from misleading and deceiving consumers to such effect, and also to restrain Mr Klimis, the managing director of Sydneywide, from procuring inducing or being knowingly concerned in such conduct of Sydneywide. Red Bull presently imports into and supplies for sale in Australia a carbonated taurine energy drink under the registered trade mark Red Bull. It has undertaken since about 1997 a substantial marketing and advertising campaign in Australia of its Red Bull product, with placed emphasis upon the unique blue silver and red colour arrangement, and other features, of the packaging of its only container, namely a 250ml cylinder can. In late 1998, Red Bull obtained approval from AQIS for importation of Red Bull into Australia, and the first commercial sales occurred in Australia in March 1999. There are between 20 and 25 different energy drinks currently available for sale in Australia and sold in 250ml cylinder cans. Red Bull's entry into the Australian market was highly successful, due at least in large part to the extent of its advertising and promotional campaigns. Sydneywide became a substantial distributor of Red Bull in Australia from early 2000, pursuant to arrangements made in the latter part of 1999. It was also a substantial distributor of other energy drinks and soft drinks in Australia. During the period from late 1999 until early 2001, that is to say, essentially during the period of its business association with Red Bull, Sydneywide planned secretly for the manufacture in New Zealand and importation into Australia of its own intended energy drink. At least by the time of the launch of Sydneywide's product under the trade mark LiveWire, Red Bull and another product marked as "V" had became by far and away the two leading energy drink products in Australia. The decision of the Court was that notwithstanding the obvious difference in the trade marks of the two products Red Bull and LiveWire, the packaging get up of LiveWire was so deceptively similar as to have enabled Sydneywide to appropriate part of the goodwill and custom of Red Bull into the marketplace for energy drinks. In reaching this conclusion, the Court drew the inference that Sydneywide, under Mr Klimis' direction and decision-making, intentionally designed a packaging label which "sailed too close to the wind" in its endeavours to gain, at virtually no cost to Sydneywide, the benefit of Red Bull's massive advertising and marketing campaign conducted over the preceding two or three years. The consequential remedies of the Court were withheld however from Sydneywide's 330ml bottled product LiveWire, as distinct from its 250ml can product. That was because the Red Bull promotion and merchandising of its product has been confined to the shape and size of the containers for most energy drinks, namely the 250ml can. CONTI J 3 SEPTEMBER 2001 FEDERAL COURT OF AUSTRALIA Red Bull Australia Pty Limited v Sydneywide Distributors Pty Limited [2001] FCA 1228 TORT – passing off – imported energy drink product only in cans widely advertised and promoted in Australia by applicants prior to distribution – first respondent appointed non-exclusive distributor in Australia of applicants' product – second respondent the managing director of the first respondent – first respondent already a distributor of other brands of energy drinks and also of non-alcoholic drinks generally – preparations made by respondents for packaging and launch of competitive energy drink during time of appointment of first respondent as non-exclusive distributor for applicants without disclosure to applicants – whether first respondent passed-off its product for that of the applicants by reason of packaging of both can and bottle containers - dominance of blue, silver and red hue on both products – relevance of arrangement and extent of use of colour combinations - canned products of same shape and size - relevance of intentional adoption of a rival's get-up – where obvious difference in brand names – importance of looking at totality of the conduct in passing off suits - whether first respondent's package so designed as to "sail close to the wind" of applicants' packaging – finding of passing-off in favour of applicants in relation to cans but not bottles. TORT – joint tortfeasor – whether second respondent as managing director procured or directed the tort committed by the first respondent – second respondent not a one man company. TRADE PRACTICES – misleading and deceptive conduct arising out of same facts and circumstances – whether second respondent knowingly concerned in misleading or deceptive conduct. Trade Practices Act 1974 (Cth) ss 52, 53 and 75B Apand Pty Ltd v Kettle Ship Company Pty Ltd (1994) 52 FCR 474 followed Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641 followed Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460 followed BM Auto Sales Pty Ltd v Budget Rent a Car System Pty Ltd (1977) 51 ALJR 254 referred to Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1981] RPC 429 referred to CA Henschke & Co v Rosemount Estates Pty Ltd (2000) AIPC 91-640 referred to Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 referred to de Cordova v Vick Chemical Co (1951) 68 RPC 103 followed Dr Martens Australia Pty Ltd v Rivers (Australia) Pty Ltd (1999) 47 IPR 499 referred to Fencott v Miller (1983) 152 CLR 570 referred to Freeman Cosmetic Corporation v Jenola Trial Pty Ltd (t/a South Pacific Cosmetics) (Jenkinson J, 18 October 1993, unreported) followed Jones v Dunkel (1959) 101 CLR 298 followed Kettle Chip Co Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 followed Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 104 FCR 61 referred to Microsoft Corporation v Auschina Polaris Pty Ltd (1996) 71 FCR 231 followed Montgomery v Thompson (1891) 8 RPC 361 referred to New South Wales Dairy Corporation v Murray Goulburn Co-Operative Company Ltd (1989) 86 ALR 549 referred to Office Cleaning Services Ltd v Westminister Office Cleaning Association [1946] 1 All ER 320; 63 RPC 39 (HL) followed Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 referred to/distinguished Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491; [1990] RPC 340 (HL) followed Re Remy Martin Amerique (O'Loughlin J, 19 February 1992, unreported) followed Schweppes Ltd v Gibbens (1905) 22 RPC 601 referred to Sony Music Productions Pty Ltd v Tansing (t/a Apple House Music) (1993) 27 IPR 640 referred to Sterling Winthrop Pty Ltd v R & C Products Pty Ltd (1994) ATPR 41-308 followed Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1989) 89 ALR 48 referred to Thai World Import & Export Co Ltd v Shuey Shing Pty Ltd (1989) 17 IPR 289 referred to WD & HO Wills (Australia) Pty Ltd v Philip Morris Ltd (1997) ATPR 41-590 followed Windsor Smith Pty Ltd v Dr Martens Australia Pty Ltd (2001) 49 IPR 286 referred to Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 referred to Blanco-White and Jacob, Kerly's Law of Trade Marks and Trade Names (12th ed, 1986) at pp. 401-402 Wadlow, The Law of Passing Off (2nd ed, 1995) at pp. 429-430 Webster and Page, South African Law of Trade Marks (3rd ed, 1986) at pp. 450-1 RED BULL AUSTRALIA PTY LIMITED & ANOR v SYDNEYWIDE DISTRIBUTORS PTY LIMITED & ANOR N 197 OF 2001 JUDGE: CONTI J DATE: 3 SEPTEMBER 2001 PLACE: SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 197 OF 2001 BETWEEN: RED BULL AUSTRALIA PTY LIMITED FIRST APPLICANT RED BULL GmbH SECOND APPLICANT AND: SYDNEYWIDE DISTRIBUTORS PTY LIMITED T/as SYDNEYWIDE BOTTLERS AUSTRALIA FIRST RESPONDENT EMANUEL KLIMIS SECOND RESPONDENT JUDGE: CONTI J DATE OF ORDER: 3 SEPTEMBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pending the making of final orders in relation to the proceedings conducted up to and including the hearing which took place on 28-30 May 2001, the First Respondent by itself its servants and agents be restrained from selling and distributing in Australia any carbonated taurine energy drink in 250ml cylinder cans bearing or containing the present packaging get-up of the First Respondent product marketed under the trade mark LiveWire, and in particular any packaging comprising a combination of the colours red, blue and silver with a diagonal line or lines. 2. Pending the making of final orders in relation to the proceedings conducted up at the said times, the Second Respondent be restrained from being knowingly concerned in or party to, directly or indirectly, any conduct prohibited by Order 1 above. 3. The parties to have liberty to apply in relation to the finalisation of the terms of declarations (if any) and orders to be made by way of giving effect to the terms of the Reasons for Judgment, and to provide submissions in writing in advance of the hearing of any such applications. 4. The Respondents to pay the Applicants' costs of the proceedings up to the conclusion of hearing of the proceedings on 30 May 2001, other than any costs for which orders have already been made. 5. There be liberty to apply for directions as to the future conduct of the proceedings in relation to such assessment of damages and accounting for profits as may be sought by the Applicants. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 197 OF 2001 BETWEEN: RED BULL AUSTRALIA PTY LIMITED FIRST APPLICANT RED BULL GmbH SECOND APPLICANT AND: SYDNEYWIDE DISTRIBUTORS PTY LIMITED t/as SYDNEYWIDE BOTTLERS AUSTRALIA FIRST RESPONDENT EMANUEL KLIMIS SECOND RESPONDENT JUDGE: CONTI J DATE: 3 SEPTEMBER 2001 PLACE: SYDNEY REASONS FOR JUDGMENT The parties, the causes of action and the defences thereto in outline 1 The First and Second Applicants (referred to hereafter as "the Applicants" or individually as "Red Bull Australia" and "Red Bull GmbH") are respectively the importer and supplier for sale in Australia since about March 1999 of Red Bull energy drinks, and the manufacturer and wholesaler internationally since about 1987 of energy drinks sold under the trade mark "Red Bull". The Red Bull product has been advertised and otherwise promoted internationally since 1987, and in Australia since about 1997. The description "Red Bull" where hereafter used may be taken to refer generally to both Applicants, except where inconsistent with the context. 2 The get-up of the Red Bull product, the packaging whereof takes the form solely of a beverage can of cylinder shape having a capacity of 250ml, is asserted by the Applicants in their amended statement of claim to comprise the following main features: · blue and silver background with a central element in red; · a diagonal line slashed across the face of the can; · a large blue and silver rhomboid shape; and · a horizontal line across the centre of the can. 3 Such Red Bull packaging get-up is asserted in the amended statement of claim to have been visible and prominent in the advertising and promotion carried out by the Applicants in relation to the Red Bull product, wherever the same has been displayed for sale, both internationally and in Australia. The Applicants claim to have established substantial goodwill and reputation in relation to the Red Bull get-up, such that any energy drink products incorporating the get-up would signify, or would be likely to signify, to persons in Australia (as well as internationally) that such products are made by or with the license or approval of the Applicants. 4 The First Respondent ("Sydneywide") has at least since February 2001 imported into Australia from New Zealand, and has advertised, distributed and sold in Australia, an energy drink packaged in cans of the same shape and size of 250ml cans as those used by Red Bull, and also in bottles of 330ml capacity, under the trade mark "LiveWire". Relief in the subject proceedings is sought by the Applicants against Sydneywide in relation to both its can and bottle product, notwithstanding that Red Bull is sold only in the can. The Second Respondent ("Mr Klimis") is the managing director of Sydneywide and an equal shareholder therein with his brother. The Applicants allege that the packaging of LiveWire, both for its canned as well as bottled product, is substantially identical with and deceptively similar to the Red Bull packaging, the LiveWire packaging being said to include the four elements described in [2] above. The major focus of the Applicants' case has, however, been upon LiveWire's can rather than LiveWire's bottle. 5 The Applicants propound the following causes of action against Sydneywide by reason of its conduct so alleged, being first, contravention of ss 52 and/or 53 of the Trade Practices Act 1974 (Cth), secondly, carrying out of such conduct with the intention of appropriating and taking advantage of the reputation and goodwill of the Applicants in their product by passing off the same as the product of the Applicants, or as a product having the endorsement, approval or sponsorship of the Applicants, and thirdly, breach of certain agreements entered into about 1 February 2000 or 14 February 2000. The latter cause of action was not made the subject of the Applicants' submissions to the Court, and will not be further referred to. 6 The Applicants propound the following causes of action against Mr Klimis as Second Respondent, first, of being directly or indirectly knowingly concerned in or a party to the said conduct of Sydneywide constituting contravention of ss 52 and 53 of the Trade Practices Act, and secondly, of engaging in the said conduct of passing-off as a joint tortfeasor. 7 The Applicants seek consequential relief by way of injunctions, an account of profits and damages. At this present stage of the proceedings, the relief sought by the Applicants is confined to that of declarations and injunctions. 8 The Respondents respectively join issue upon the allegations the subject of such causes of action, and in that context, whilst admitting that the Red Bull product has been advertised and sold in Australia since about 1999 under the trade mark Red Bull, and further that the Red Bull packaging has a blue and silver background, the Respondents plead that such packaging also exhibits or comprises: (i) the trade mark Red Bull in large red upper and lower case lettering in a dominant position set in the middle of the can above a central device; (ii) the central device depicting two red coloured bulls charging towards each other against a gold circle; (iii) the words "Energy Drink" printed in red upper case lettering below the central device; and (iv) a blue and silver check pattern, the horizontal central line of which passes though the device, and the vertical central line of which is not entirely vertical, but is inclined to the diagonal. 9 Furthermore, whilst also admitting that the product packaging of "LiveWire", in the form of beverage cans and bottles, has a blue and silver background, the Respondents plead that the LiveWire packaging comprises: (i) in dominant feature, the trade mark LiveWire, in large and italicised upper case lettering above the middle of the container; (ii) the words "Energy Drink" printed in black upper case lettering across the middle of the container; and (iii) a lightning flash device in blue and silver. 10 The following circumstances concerning the Applicants and their Red Bull product are formally accepted by Sydneywide to be common ground: (i) Red Bull Australia, which is incorporated in Victoria, is a partially owned subsidiary of Red Bull GmbH; (ii) The Red Bull Group of Companies is one of the largest energy drink manufacturers in the world; (iii) The Red Bull product is manufactured in Austria; (iv) The Red Bull product is imported from New Zealand for sale in Australia under the provisions of the Trans Tasman Mutual Recognition Agreement made between Australia and New Zealand; (v) The Red Bull product is sold in Australia in a slim-line 250ml can incorporating the Red Bell get-up; (vi) Private consumption of the Red Bull product is allowed under the provisions of the Imported Food Control Act 1992 (Cth); (vii) The Red Bull companies are involved in the sponsorship of leading athletes; (viii) The Red Bull product is sold in retail outlets which include supermarkets, convenience stores, service stations, cafes, restaurants, night clubs and bars; (ix) The Red Bull product is sold in convenience stores and supermarkets and is presented thereby to consumers either unchilled on the shelf, or in refrigerators; and (x) Red Bull provides fridges known as barrel fridges, and bar fridges incorporating the Red Bull get-up, to certain retail outlets. The matrix of circumstances to the litigation propounded by Red Bull 11 The Red Bull energy drink is a carbonated taurine energy drink which includes glucuronolactone, caffeine, inositol, niacin, pantothenic acid, and vitamins B6 and B12, as its key ingredients. It is marketed in fifty-five countries in Europe, Africa, the Middle East and America, as well as Australia. The Red Bull packaging is apparently identical worldwide, and the Applicants' case is that until the arrival of LiveWire, the same was unique, certainly so far as Australia is concerned. 12 The principal witness called by the Applicants was Mr P J Devereux, the Corporate Projects Manager for Red Bull's operations in Australia and New Zealand. Marketing and promotional activities concerning the Red Bull get-up have been undertaken in Australia from December 1997 onwards. Private consumption sales of the Red Bull product incorporating the Red Bull get-up began in Australia on 10 December 1997. Between 10 December 1997 and late November 1998, 223 trays of the Red Bull product were sold, each tray containing 24 cans. Sales were made from about those times progressively in New South Wales, Victoria, South Australia, Queensland, Western Australia and the Australian Capital Territory. During 1997 and 1998, free samples of the Red Bull product were provided to sports athletes, and were also provided for other promotional activities undertaken during those years. Such promotional activities involved the distribution of flyers depicting a can bearing the Red Bull get-up to about 500 locations in Sydney and Melbourne from 30 July 1998 to 29 October 1998, 60,000 postcards depicting a can bearing the Red Bull get-up to 350 locations in Sydney and Melbourne from about May 1998 to July 1998, and 16,000 counter-display cards and 1000 coasters bearing the Red Bull get-up from about May 1998 onwards to various bars and clubs in Sydney. So-called "brand ambassadors" introduced themselves to attendees at events and locations and offered samples for consumption. 13 Other promotional activity undertaken by Red Bull in Australia have included the following: (i) colour photographs of a can of Red Bull appearing in the September 1998 edition of Ansett Australia's domestic inflight magazine "Panorama", and in the Spring/Summer 1998/1999 edition of "Studio For Men" magazine; (ii) motor vehicles bearing the Red Bull get-up driven in Sydney, Melbourne, and Brisbane for promotional purposes from about 1998; and (iii) television, cinema and radio advertising, surpassing $5 million in expenditure in the year 2000, and projected to increase above that level in 2001. 14 Approval from the Australian Quarantine Service for the importation from New Zealand of the Red Bull product into Australia for sale was granted to Red Bull on 18 December 1998. The first commercial sale of a Red Bull can in Australia occurred on 31 March 1999 in the State of New South Wales. Thereafter commercial sales took place in Victoria, Western Australia and South Australia from 7 April 1999, 23 August 1999 and 1 March 2000 respectively. Red Bull's packaging of its product, as first imported into Australia, is the same as that which was used when the original Red Bull product was launched in Austria in 1987. 15 The entire focus of marketing and promotion of the Red Bull product has been upon its slim-line 250ml can. Put another way, the fundamental image which is portrayed by its marketing is the Red Bull get-up incorporated into the packaging of such a can. Consumers customarily drink the Red Bull product from the can without a glass, something encouraged by Red Bull promotion. Marketing expenditure in Australia in 1999 and 2000 was substantial, as was and continues to be forecast marketing expenditure in Australia for 2001, particulars whereof are contained in a confidential exhibit. Marketing strategy in Australia, as also worldwide, centres upon four core activities, namely media, event marketing, athletic sponsorship and free sampling. Substantial information in relation to each such marketing activity was provided in evidence. A range of advertising materials used at sponsored or supported sporting and cultural events have included large inflatable replicas of the Red Bull can and a Red Bull tent/starshade. I have already set out in [2] above what the Applicants have pleaded to be the main features of Red Bull's packaging. Mr Devereux elaborated upon the same in the following terms: "51. One of the most prominent and distinctive features of the front panel design of RED BULL can is a steep diagonal line that runs from top right to bottom left. This diagonal thrust is created by the positioning of trapezium shapes made up of alternating blocks of the colours blue and silver. This diagonal thrust is continued around the edge of the can to the rear panel where the detailed text is contained within a single trapezium area with a silver background. 52. The vertical thrust is counter-balanced by a horizontal line across the centre of the front panel, created partly by the edges of the blue and silver trapezoids in the background and partly by the placement of the brand name text RED BULL in large red letters. The first letter of each of these words is capitalised. 53. Also positioned in the centre of the can and immediately below the brand name is a graphic device depicting two red bulls charging each other in front of a small yellow circle or disc (the "bull device"). Immediately below the bull device are the words "energy drink" in red capitals. This device further acts to disrupt the vertical thrust. 54. At the top of the front panel, appearing in very small silver font against the blue background of one of the trapezium shapes, is text describing the basic product, "Carbonated Taurine Drink with Caffeine. Serve Ice Cold". I consider this text element to be relatively insignificant in terms of consumer recognition of the brand. 55. At the bottom of the front panel, a thin band of horizontal text appears inside two thin trapezoids. These trapezoids reverse the colour of those immediately above and below them, once again divided at the centre around the diagonal vertical thrust. The thin blue band on the left has silver text superimposed "With Taurine". The thin silver band on the right has blue text superimposed "Vitalizes Body and Mind". These text elements, although slightly larger than the text at the top of the front panel, remain, in my opinion, relatively unimportant in terms of consumer visual recognition of the brand. However, in my opinion, the claim "Vitalizes Body and Mind" is likely to play a role in reinforcing the transformational associations indicated to consumers by the brand name RED BULL and the use of the bull device. 56. The rear panel is made up of a silver background, with a significant amount of small horizontal text detailing product claims, warnings, a nutrition table, ingredients list, source of manufacture and bar code. A section of the text is red and the rest is blue. As mentioned above, the rear panel primarily takes the form of a diagonal trapezoid. Given that products in this category are generally displayed for sale with single facings (ie the product is displayed on a shelf with the front panel facing the consumer) and given the very small font size of the text elements on the rear panel, I consider this entire element to be relatively insignificant in terms of consumer recognition of the brand." 16 The evidence supports the claim of Red Bull that it is a leading brand in the energy drink category, indeed one of the two leading and major brands, the other being the "V" brand. Confidential net sales figures have been provided in evidence, the same reflecting the sums paid by Red Bull's sub-distributors. The product is sold in a variety of outlets including night clubs, bars, supermarkets, convenience stores, service stations, cafes and restaurants. Red Bull's sales concentration has been thus upon two sales channels, namely licensed premises, where the Red Bull product is sold alongside or together with alcohol, and consumed on such premises, and "off-premise", meaning thereby retail sales streams other than licensed premises, including so-called "impulse channels" (petroleum sites, convenience stores, takeaways, food bars, milk bars and general stores), and "grocery channels" (supermarkets and other large retail outlets but not corner stores). Such "off premise" outlets are supplied with Red Bull stock by sub-distributors engaged by Red Bull. Mr Devereux asserted that the marketing of Red Bull was targeted to six core groups who are said to regularly need energy, namely drivers, students, workers, athletes, evening drinkers and clubbers. An A C Nielsen survey published on 24 December 2000 shows that Red Bull enjoys market leadership in the grocery and "impulse purchase" sales streams with the two products marketed as "V" (see [19] below), well above the many other competitors in the Australian market, except perhaps for the four "Red Eye" products taken in the aggregate of their respective market shares. An earlier A C Nielsen survey published on 26 November 2000 showed the "V" product ahead of Red Bull, though Red Bull was still well ahead of the next brand "Lift Plus Energy", though it is to be remembered that the "V" product is also produced in a bottle. 17 Red Bull has asserted in evidence that few of the competing energy drink brands are available for sale in licensed premises. The Respondents' product "LiveWire" is sold primarily in convenience stores, and is presently unavailable in supermarket outlets. The extent of its market penetration has not been disclosed in evidence. The Red Bull product distributed through both convenience stores and supermarkets is presented to consumers unchilled on the shelf, or in refrigerators. Refrigerators incorporating the Red Bull get-up, of the kind referred to in [10(x)] above, and other Red Bull point of sale materials, are placed in positions of prominence in stores or night clubs, usually near the counter or bar. 18 There are between 20 and 25 different energy drinks currently available for sale in Australia and sold in 250ml cans, and a further 10 other energy drinks sold in different sized cans or bottles, though as in the case of LiveWire, for instance, both forms of packaging are used. Such energy drinks differ in their effects from other function energy drinks, in that the latter are said not to provide the same energy benefit as energy drinks so-called which are the subject of the proceedings. Thus in the case of other function energy drinks in the nature of sports drinks, the same are directed to the replacement of fluid, carbohydrate and electrolytes after sustained strenuous exercise, and in the case of other function energy drinks in the nature of refreshment energy drinks, the same incorporate elements of both energy drinks so-called and sports drinks. 19 A table has been produced in evidence on behalf of Red Bull, showing the ingredients listed in the packaging of inter alia the following energy drinks (not being sports drinks or refreshment drinks), which are available for sale in Australia, namely Red Bull, LiveWire, Professor Head's Smart Drink, V, IQ, Red Eye and Bull Rush. The testimony of Mr Devereux is that only LiveWire has identical active ingredients to those of Red Bull. Red Bull's ingredients have already been described in [11] above. 20 The retail price ranges of certain energy drinks available for sale in Australia, inclusive of five of those referred to in [19] above, has been assembled by Mr Devereux in the following further table which is reproduced below: Product Grocery (Outlets) Convenience (Outlets) Live Wire N/A (see [17] above) $2.00 - $2.20 Smart Drink $1.80 - $2.00 $1.80 - $2.00 Red Eye $1.80 - $2.00 $1.80 - $2.00 V $1.80 - $1.90 $2.00 - $2.20 Lift Plus $1.75 $2.00 - $2.20 Red Bull $2.65 - $2.75 $2.85 - $3.20 On 14 March 2001, according to the evidence of Ms Christopher, a Solicitor in the employ of Sydneywide's retained firm of Solicitors, the following price differences between Red Bull and LiveWire products were apparent in three Sydney convenience stores as follows: Store Red Bull Can Live Wire Can Live Wire Bottle Skyline Seafood Takeaway $2.00 $2.30 $2.90 North Sydney Convenience Store $3.00 $2.50 $3.00 City Convenience Store $3.50 $2.20 $3.20 Moreover Mr Scott Carter, Red Bull Australia's Regional Energiser, found that in the course of his visits to thirteen impulse channels (the meaning of which is explained at [16] above) between January and March 2001, the pricing of energy drink products was not apparent or visible to consumers in ten of such stores. The sub-distributorship relationship between Red Bull Australia and Sydneywide and the events leading to its termination 21 As stated in [16] above, Red Bull has supplied its "off premise" outlets by means of sub-distributors which it engages for the time being. One such sub-distributor was the First Respondent Sydneywide, whose managing director at all material times, as stated in [4] above, has been the Second Respondent, Mr Klimis. Sub-distributors were supplied by Red Bull on an order-by-order basis placed in favour of Red Bull as supplier on Red Bull stationery. Since the month of February 2000, Sydneywide commenced the taking of orders for the Red Bull product from "off premise" outlets, and thus the presentation of such orders to Red Bull Australia, and the uplift of product by Sydneywide from Red Bull Australia pursuant thereto, and the subsequent delivery of such product by it to those outlets. It appears that Sydneywide obtained credit terms of sixty days for remitting payment pursuant to such procedural regime to Red Bull Australia for the product so collected and distributed. A presentation had been previously undertaken in or about December 1999 by Red Bull representatives of its product at Sydneywide's premises in Condell Park, such Red Bull representatives comprising Red Bull's National Distribution and Merchandising Manager Mr Trevor Carter, and two other Red Bull personnel. Approximately seven Sydneywide personnel had attended the presentation, including Mr Klimis, his father and one of his brothers. Sydneywide was provided with Red Bull promotional material and samples. Mr Klimis estimated the first shipment of the Red Bull product to have arrived at Sydneywide's premises in late 1999. The purpose of the presentation was said to be to educate Sydneywide sales representatives on the following points of emphasis, first as to the way Red Bull required the product to be sold (for example, the sale of the product based on image and quality of ingredients), secondly, the background to the international Red Bull group of companies, in order to demonstrate the size, history and seriousness of involvement of the Red Bull group globally, thirdly, as to Red Bull's marketing plans and advertising "spins", and fourthly, as to the value of the Red Bull brand and its position as a premium product. The first of those points of emphasis was particularly significant, because Red Bull Australia, as apparently in the case of other energy drink suppliers in Australia, was only permitted by law to import its product into this country for private consumption, and it was necessary to ensure that its customers were legitimately engaged in selling only for purposes of private consumption. Hence its advertising and promotional programme was geared to compliance with that import restriction. 22 By about February 2000, Red Bull Australia had commenced fulfilling orders placed by Sydneywide for the supply of the Red Bull product. There had been a limited number of distributors available to Red Bull up to this time, because many distributors were already distributing other brands of energy drinks. Red Bull's preference, and its international policy, has been to focus on marketing its brand, and not on itself as physically delivering the same to retain outlets, a policy which it has found to be the most effective. 23 Sydneywide continued to submit orders for the supply of the Red Bull product until on or about 14 February 2001. During such period of approximately one year of Sydneywide submitting orders and Red Bull fulfilling the same, Sydneywide placed customer orders for more than 1.128 million cans from Red Bull, for a total Red Bull invoice value of $1,727,347.58. Red Bull's major distribution relationship in Sydney during that yearly period was that which it conducted with Sydneywide. Sydneywide derived a gross profit margin of $4.50 per case of Red Bull for its distribution services undertaken for Red Bull, and as already indicated, was allowed a period of sixty days within which to collect payment from customers and remit the same to Red Bull Australia. 24 Mr Trevor Carter of Red Bull Australia assisted Sydneywide sales representatives to sell the Red Bull product during the period from May to October 2000, by visiting the market place with them and giving practical merchandising demonstrations, and generally maintaining dialogue with such representatives and monitoring their performance. He claimed to have enjoyed a good working relationship with Mr Klimis, and to have participated in many discussions with him as to the means of increasing the Red Bull customer base by way of improvement of the selling techniques and procedures of Sydneywide's sales representatives. Mr Carter observed that from about mid-May 2000, Sydneywide's sales of Red Bull commenced to plateau, and that new business accounts introduced by Sydneywide to Red Bull Australia virtually ceased to occur, despite Red Bull Australia's introduction of a "one-off" incentive program for Sydneywide's sales representatives to locate and introduce new accounts. 25 On or about 2 February 2001, Red Bull Australia first came to hear about the sale of the LiveWire brand of energy drink. Such time may be taken to be that for determining whether or not the Applicants had established the necessary reputation in its get-up for the purposes of its causes of action based upon the tort of passing-off and s 52 of the Trade Practices Act: Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1981] RPC 429 at 494 and Thai World Import & Export Co Ltd v Shuey Shing Pty Ltd (1989) 17 IPR 289 at 302. The source of such information was not Sydneywide, which had given no hint to Red Bull Australia of its intention to enter the market with its own product. Mr Scott Carter journeyed forthwith to the Century Tower Convenience Store in Pitt Street Sydney and noticed a LiveWire can stacked immediately adjacent to Red Bull cans. Later on the same day, he observed three LiveWire bottles and three LiveWire cans on display at the Gebara City Convenience Store in George Street Sydney, which he duly purchased. By about the week commencing 12 February 2001, Mr Scott Carter said that the LiveWire energy drink was available for sale in almost all of the convenience stores within the Sydney central business district which he visited. The uncontradicted evidence of Red Bull Australia's executives is that at no time did Sydneywide give notice to Red Bull of its intention to launch a new energy drink, either with the get-up of LiveWire or at all. There is no evidence of Sydneywide having advertised the launch of "LiveWire", or of having subsequently advertised the ongoing marketing of the product, at least in the media. But of course, its positioning in the marketplace in Sydney as a substantial sub-distributor of non-alcoholic drinks may well have rendered the outlay of such expenditure unnecessary, or largely so. 26 By letter dated 14 February 2001, Red Bull's solicitors asserted inter alia that Sydneywide had gained a special positioning in the energy drink market as a result of its involvement as a sub-distributor of Red Bull energy drinks, and that its commencement of distribution of the LiveWire energy drink, having a get-up strikingly similar to that of Red Bull by virtue of its adoption of the same colour combination, angular blocking and can size, involved conduct which was in the nature of passing off, and was also misleading and deceptive conduct or likely to be so. No allegation was made as to infringement of Red Bull's trade marks, nor has the same ever since been made. Sydneywide's solicitors denied such allegations by letter of 16 February 2001, referring to the circumstances that it had already been a distributor of "energy type drinks" additionally to those of the Red Bull brand, and that the size of cans employed in the energy drink market were very similar, and further that the LiveWire name was dissimilar to Red Bull, and further again that LiveWire's colour configuration was dissimilar in style to that of Red Bull. What the letter did not then say was that Sydneywide never intended LiveWire to be a competitor of Red Bull, something which Mr Klimis later asserted under cross-examination. Sydneywide's prior involvement in the non-alcoholic drink market generally, and the energy drink market in particular, and its planning for and commencement of the production sale and distribution of LiveWire (aside from packaging design detail) 27 Sydneywide had earlier commenced its involvement in Sydney in the business of distributing beverages, predominantly soft drink products, in about late 1996. In about 1997, it expanded the business by specifically targeting energy drinks, due to the higher margin available from distributing such beverages in comparison with others such as Coca Cola and lemonade, the latter not being energy drinks strictly so-called. Mr Klimis explained his understanding of energy drinks as beverages generally containing ingredients aimed at having a stimulating or boosting effect, being ingredients such as caffeine, B group vitamins, guarana or other herbal ingredients, and that guarana is an added source of caffeine. He asserted that most brands of energy drinks in Australia are generally sold in slimline 250ml cans, and further that most have metallic colours, silver being one of the main colours, and further again that several brands are predominantly blue and silver. Mr Klimis produced in evidence many cans and bottles of energy drinks currently claimed by him as being offered for sale on the Australian market, whereof the majority were sold in slim-line 250ml cans. The cans have been described in [52] below. 28 Sydneywide began distributing three brands of energy drinks in 1997, namely "Jolt Cola", "Columbian Cola" and "Feeling Seedy". By 1998, Sydneywide was distributing other energy drinks, and in addition to manufacturing as well as distributing LiveWire energy drinks as from February 2001, it has been manufacturing and selling "Ice Cool Sodas" (a non-energy drink) and "Ice Cool Water" (which comprises still water). Sydneywide claimed to be one of the largest, if not the largest, independent distributor of beverages in Sydney, and to have been so since about late 1998 or early 1999, being independent in the sense of not being owned or controlled by any major beverage manufacturer. Sydneywide also distributes such products in Victoria, Queensland, South Australia and Western Australia. 29 At the present time, apart from distributing its own product LiveWire, Sydneywide claimed to be a distributor of the following energy drinks, namely "Black Stallion", "Bull Rush", "Columbian Cola", "Red Eye", "Feeling Seedy", "Jolt", "Liquid B", "Lipovitan", "Lucozade" and "Crack" (most of which are included in the list at [52] below), and in addition some seventeen non-energy drinks, including "Coca Cola" and "Schweppes" soft drinks. 30 Mr Klimis asserted that it was about the year 1997 that he first became interested in the project of Sydneywide distributing its own energy drink in Australia, and such interest was said to be by reason of the high margins involved. There was no reason conceded on his part for disclosure of such interest to Red Bull Australia at any material time prior to actual commencement of distribution of LiveWire. Sydneywide claimed to have been a non-exclusive national distributor of the first energy drink sold in Australia in the slimline 250ml can, namely Black Stallion, from November 1997 to May 1999, and to have become the exclusive distributor of Black Stallion from June 1999 to September 2000. LiveWire was not the first non-alcoholic drink which it manufactured, Sydneywide having manufactured (and sold) a sports drink "ATP Sports Drink" in about mid 1999 for about two months, being a venture said to have been unsuccessful. 31 Mr Klimis claimed that it was in about November 1999 that Sydneywide set in train its plans to manufacture its own energy drink for distribution in Australia. By this time, Red Bull's substantial marketing activities had been underway for nearly two years (see [12] above), and the commercial distribution of Red Bull had been underway for about eight months (see [14] above). As in the case of Red Bull, Sydneywide became aware of the shelter provisions of the Trans Tasman Mutual Recognition Agreement concerning importation into Australia of energy drinks produced in New Zealand (see [10(iv) and (vi)] above), notwithstanding restrictions upon manufacture of most energy drinks so-called in Australia. Upon the recommendation of Mr Philip Carter, Sydneywide's general manager, Mr Klimis enquired of Mr Michael Erceg, managing director of Independent Liquor of New Zealand, a beverage manufacturer with canning facilities in New Zealand for 250ml energy drink cans, as to whether his company would make energy drinks for Sydneywide and export the product to Australia. In furtherance of such plans, Mr Klimis' father, Mr Harry Klimis, travelled to New Zealand, and thereafter wrote on 25 November 1999, upon a letterhead styled "Harris Enterprises", as follows: "Re: Production of energy drinks Firstly, I would like to sincerely thank you for your hospitality and tour of the factory and production facilities, we were very impressed with your operations. This letter is to confirm my interest in you manufacturing a range of energy drinks for my company. I am interested in 250ml slimline cans and also preferably 355ml glass bottles. The flavour profile I am requiring is similar to Vitalise and/or liquid B with guarana, taurine, caffeine, inositol and glucoronolactone added. Is it possible to send me samples of these, and if the samples are to my expectations, I will immediately proceed with an official order for you to commence production. In the meantime, I will proceed from my end, with designing of graphics. Please advise terms of payment you require also lead time from date of official order delivered to Sydney, Australia, as well the lead time for reorders. Your earliest response in this matter would be sincerely appreciated and we look forward to a long and mutually beneficial business relationship. Best regards Harry Klimis Harris Enterprises." Mr Klimis said that his father did not write this letter on Sydneywide's letterhead "as I was concerned about Sydneywide jeopardising its relationship with Black Stallion by producing a competing energy drink at the time". That may have been so, but I would infer that Mr Klimis would have been more concerned about Sydneywide prematurely jeopardising its embryo relationship with Red Bull Australia (see again [21] above) for a similar reason, at least until Sydneywide was ready to sell its proposed new product, Red Bull enjoying a much larger Australian market share even by that time, so I would infer, than Black Stallion, and Red Bull having been gearing up its very substantial promotional and selling activities from the times to which I have already referred. 32 On or about 27 November 1999, Mr Klimis spoke again to Mr Erceg of Independent Liquor and sought confirmation that Independent Liquor would provide Sydneywide's own brand of finished energy drink product, and on about 27 November 1999, he received from Independent Liquor a response which is Confidential Exhibit EK3. Subsequently on about 12 April 2000, Sydneywide received from Independent Liquor Confidential Exhibit EK4, and on 1 May 2000 Mr Klimis wrote back to Independent Liquor, so far as is material, as follows: "Thank you for visiting my warehouse and it was a pleasure to finally meet you in person. After our conversation I am very confident in increasing our business relationship with Independent Liquor with products such as Liquid B and LiveWire…" On or about 14 March 2000, Sydneywide lodged a trademark application in Australia in relation to LiveWire for use in connection with its energy drink, and on 27 October 2000, the trademark was registered. What transpired in relation to the manufacture, importation and distribution of Liquid B was not the subject of attention in the evidence, Liquid B's packaging colour scheme being orange, blue and yellow as disclosed in [52] below. 33 Earlier in February or March 2000, Mr Klimis met in Sydney with Mr Casey of Independent Liquor. Mr Casey suggested that Mr Frank Scarisbrook could do the graphics for the packaging for the Sydneywide product which Mr Klimis had in mind. At that time, Mr Klimis asserted in cross-examination that "I don't think colour was an issue". When asked whether he mentioned Red Bull in conversation with Mr Casey, Mr Klimis commenced his unfortunate and repeated practice of purportedly answering questions the subject of cross-examination with his own question – "Why [would] I want to mention Red Bull in a conversation?" In early April 2000, Mr Erceg visited Mr Klimis at Sydneywide's Condell Park premises. On about 15 May 2000, Sydneywide received from Independent Liquor the first artwork relating to LiveWire's packaging, the design of which had been prepared by Mr Scarisbrook. It is apparent from correspondence in evidence that Mr Scarisbrook must have received instructions prior to 1 May 2000 (see letter of 1 May 2000 from Sydneywide to Independent Liquor). According to Mr Klimis, such design instructions were furnished to Mr Scarisbrook by Mr Casey, but that such instructions to Mr Casey were only that he wanted "Something striking using the words LiveWire". Thereafter until about mid November 2000, many communications took place between Mr Klimis and Mr Scarisbrook until the form and content of the artwork for LiveWire's packaging was finalised. Over approximately the same period of time, so Mr Klimis's affidavit evidence inferred, the colour scheme for the LiveWire packaging, both for cans and bottles, evolved and was settled. Mr Klimis did not in his evidence distinguish between the development of the design for the can and the bottle, and presented the same as one design process. Earlier in April 2000, Sydneywide reached agreement with Independent Liquor upon the flavour for LiveWire, after receiving a number of samples made up from various unbranded energy drink mixes. I will return later to the further detail of Sydneywide's planning for the launch of its product in Australia. 34 The first shipments of LiveWire arrived in Sydney from New Zealand in late January 2001, and the first sales thereof to the public occurred in early February 2001. A letter claimed to have been sent uniformly to "various customers, notifying them of the introduction of the LiveWire product", is "Confidential Exhibit EK5". Letters of introduction to LiveWire were accompanied by a circular as follows: "Live Wire Energy Drinks 250ml slimline can and 330ml glass bottle. As you are aware when we came to you originally with Black Stallion in 1999 who in Australia would believe what an impact beverages would have in Australia. The proof is now clear that the market has developed and many new energy drinks have been introduced to the market place some with little success others dominant. Sydneywide Distributors have developed Live Wire Energy Drink to take advantage of this still growing segment. The graphics on both pack sizes is striking in particular the 330ml bottle, which is sensational using the shrink sleeve and the long neck bottle to ensure fridge attraction. Live Wire has been released with a long-term vision to compete with the market leaders and help to grow the energy drink category with a strong alternative brand." (The above reference to 330ml bottle capacity represented a modification to the 355ml capacity originally proposed – see [31] above). Of course, as already mentioned in [16] above, one of the two market leaders was Red Bull, which by then had been pursuing for about four years a substantial promotional campaign, and during the latter part of which time, Sydneywide had been fulfilling the function of what appears to have been that of Red Bull's main distributor, at least in the Sydney metropolitan area. 35 LiveWire has been sold in convenience stores such as Seven 11, service stations for instance carrying the BP brand, take-away outlets, milk bars and mixed business stores. Such retail outlets constituted the places with which Sydneywide had built up a strong and reliable distribution relationship from about 1996, to the extent of preferred supplier status in the case of convenience stores and service stations since about 1997. Whether sold in 250ml cans or in 330ml bottles, the LiveWire product is said to be sold mainly from tall glass door refrigerators in which it is exhibited alongside other drinks, usually energy drinks. Sydneywide claims to be selling about as many bottles as cans of LiveWire, the bottles selling in the $2.85 to $3.00 range, though no statistical material or its documentary foundation has been provided by Sydneywide. LiveWire promotional materials have been apparently limited merely to free samples, given away once only, at two different prominent railway stations, and in addition T-shirts, posters and electrostatic fridge stickers have been provided by Sydneywide at point of sale locations. 36 Mr Klimis deposed to the essence of Sydneywide's defence to Red Bull's claims of passing off and misleading and deceptive conduct in the following terms: "54. In introducing LiveWire into the market, including choosing the packaging, the ingredients and distributing LiveWire, it has never been my intention or Sydneywide's to associate LiveWire in any way with Red Bull. No directions have been given by me or the management of Sydneywide to anyone in the company or to anyone outside the company to suggest any association between the two companies or their products. As managing director, I have not received any reports from our customers or consumers that any such association has been represented or made. … Our direct competitors are 'V' and the other energy drinks in our general price range. The Red Bull product sells to consumers at between around $2.85 to $3.20 per can in the same market. In my view, Red Bull is sold as a premium product in the energy drink market. We do not aim to compete in that segment." No statement or assurance to the effect of such assertions were communicated to Red Bull Australia prior to LiveWire's introduction into the market in Australia, nor prior to commencement of the proceedings. Moreover as will later be seen, Red Bull's retail prices have not necessarily been marketed generally at a premium (see the discussion for instance at [51] below). Incidentally, such assertions were not corroborated by Mr Klimis' father and brothers engaged in its business operations, nor by Mr Philip Carter (general manager of Sydneywide referred to in [31] above) nor by any of the New Zealanders identified in [31] and [33] above, namely Messrs Erceg, Casey or Scarisbrook. None of those persons provided any affidavit or viva voce testimony in the proceedings. 37 In the course of the proceedings, Sydneywide proffered three causes of the cessation of its relationship with Red Bull Australia. One cause was said to be related to the replacement by Red Bull Australia of one of its two distributors in the Sydney Region (the other distributor being Sydneywide); such replacing distributor (Anglo Distributors) was said to have caused a loss of custom to Sydneywide, though no details were given in evidence by Sydneywide. Another was said to be Red Bull Australia's decision to confine Sydneywide's outlets of supply to Sydney service stations, and thus to exclude convenience stores as outlets of supply, though when such confinement was effected, and in what circumstances, was not particularised. A third cause was said to be related to Red Bull Australia's demand that Sydneywide enter into a certain supply agreement, and provide a certain guarantee and indemnity agreement as a condition of ongoing supply, but whether such requirement was in fact implemented, and if so when, is unclear. Whatever were the merits of Sydneywide's position taken in relation to such alleged issues, Sydneywide had been in any event actively pursuing the establishment of its own energy drink LiveWire since about November 1999, without disclosing such circumstance of potential conflict of interest to Red Bull, and for that purpose had engaged in the design of the labelling of its product containers over the majority of that period of time, being a period of time during which Sydneywide would have been obviously witnessing at first hand significant growth in Red Bull product patronage, against the background of Red Bull's substantial promotional campaign since late 1997. Sydneywide's design of the packaging for its LiveWire canned and bottled product 38 In Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641 at 657, the following passage appears from the joint judgment of Dixon J (as he then was) and McTiernan J: "The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive. In the present case it has caused a prolonged and expensive inquiry into the states of mind, motives and intentions of three people whose combined judgment decided that the company should adopt the trade brand and description complained of. This in turn necessitated an investigation of the steps by which the picture was obtained, considered and adopted and what was said and done by a number of persons in relation to the subject…." Subsequently in Office Cleaning Services Ltd v Westminister Office Cleaning Association [1946] 1 All ER 320; 63 RPC 39 at 42, Lord Simonds said to similar effect as follows: "Confusion innocently caused will yet be restrained. But if 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?" The first mentioned passage in Australian Woollen Mills has often been cited in Australia in passing off and misleading and deceptive conduct cases involving trade rival disputes, albeit that the context of the passage was a trade mark infringement dispute: see for instance WD & HO Wills (Australia) Pty Ltd v Phillip Morris Ltd (1977) ATPR 41-590 at 44,146 per Davies J; Windsor Smith Pty Ltd v Dr Martens Australia Pty Ltd (2001) 49 IPR 286 at 293 per Sundberg, Emmett and Hely JJ, and Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 104 FCR 61 at 76-77 per Beaumont, Tamberlin and Emmett JJ. It was doubtless with such long established precepts in mind that Senior Counsel for the Applicants undertook his cross-examination of Mr Klimis, whose evidence in chief concerning the development of LiveWire's packaging has been thus far initially referred to in [33] above. As there appears, the first design of artwork for Livewire packaging had occurred by 15 May 2000, at the hand of a Mr Scarisbrook, to whom further reference will now be made 39 As foreshadowed in [31] above, Mr Klimis testified in his evidence in chief that it was in about November 1999 that Sydneywide set in train its plans to establish its own energy drink for distribution in Australia (see again in that regard Confidential Exhibits "EK2" to "EK4"). When cross-examined on that subject, Mr Klimis initially maintained that "… we had the view of launching our own energy drink previous to any discussion with Red Bull", though he conceded that it was in October 1999 that Red Bull had first approached Sydneywide for the formation of a distribution arrangement between them, and that it was during the following month when he first telephoned Mr Erceg of Independent Liquor in the circumstances set out in [32] above, and when his father visited Independent Liquor's factory in New Zealand (see [31] above), by which time he would have been doubtless aware that Red Bull was a prominent overseas energy drink product likely to make a substantial impact in Australia. It was only thereafter that the planning of LiveWire's packaging get-up was initiated by Mr Klimis. Mr Klimis further accepted in cross-examination that Sydneywide would not have launched a new energy drink without Sydneywide having had a major input into the package design. Mr Klimis asserted that what Sydneywide briefed Independent Liquor to produce by way of artwork for the packaging of LiveWire was to be "very simple… something that's very bold, very distinctive", because its energy drink can would be "… competing with a multitude of brands on the market place" and "fighting for shelf space," and in that context competing "for facings"; repeated subsequently, his "brief" to Independent Liquor was said to be for "something striking and very bold…". But as already appears from the discussion in [16] above, the realistic competition or fight for shelf space would have been directed largely at the product of the newly emerging and highly promoted multinational product Red Bull, and at what I would infer to have been then the market leader, namely the "V" product. 40 Before being referred in detail under cross-examination to Sydneywide's briefing of Mr Scarisbrook, Mr Klimis accepted, when pressed after a degree of prevarication on his part, that during the period of Sydneywide's distribution of the Red Bull product of about one year from February 2000 to February 2001, Red Bull Australia supported its own product with "a considerable degree of advertising and promotion", and that though Mr Klimis claimed to have played no role in the selection of ingredient inputs into LiveWire, he did know that LiveWire listed on its packaging identical nutritional information as Red Bull, that is to say, the same amounts of taurine, glucuronolactone, caffeine, inositol, niacin, pantothenic acid, and vitamins B and B12 (see [11] above). Mr Klimis claimed, however, that Independent Liquor "took it on themselves… to fill that panel up", and that such "was not of my doing". Nevertheless Mr Klimis conceded that it was "possibly right" that before Sydneywide "finally signed off on the pack design", he knew that the nutritional panels of the "final pack design" of the Red Bull and LiveWire cans would be identical. Particularly in the light of the content of Mr Klimis Senior's letter of 25 November 1999 sent on what appears to have been the feigned letterhead of "Harris Enterprises" (extracted in [31] above), Mr Klimis exhibited some difficulty in offering a credible denial for any input on Sydneywide's part into the design of the artwork thereof for LiveWire's labelling and the content thereof. 41 As recorded in [33] above, Sydneywide received from Independent Liquor on 15 May 2000 Mr Scarisbrook's initial artwork design for LiveWire. Earlier on 14 March 2000, Sydneywide had applied for registration of the trade mark LiveWire. Mr Klimis accepted that when he first saw the same, he noticed that the colours were those of the Red Bull packaging, but as was his practice, he thereupon asked the cross-examiner rhetorically "… is it wrong to sell a competing product? And if it is the colour of my choice… is it wrong to do that?" Mr Klimis denied that he wanted LiveWire's packaging to be in the colours blue, silver and red, and he answered the question "Did you mention Red Bull?" by his own question "Why [would] I want to mention Red Bull in a question?" Mr Klimis asserted in any event that at the time of his initial discussions with Mr Scarisbrook, "… colour at that point wasn't as important to me as the design", and that "I was aware that that was the colour he started off with, right, and I allowed him to continue his designs with that colour". It is difficult to accept that the Klimis family, a presumably not insignificant part of whose livelihood was by at least May 2000 being derived from its distribution of the Red Bull product (see [23] above), would have done nothing more than for instance casually notice, or casually mention in conversation between themselves, and in conversation with Independent Liquor representatives, and with Mr Scarisbrook (whose precise relationship with Independent Liquor does not appear, Mr Casey of Independent Liquor supposedly having referred to him as "his own graphic designer"), that the product being designed for Sydneywide was being produced in packaging having at least the same hue colours as Red Bull. At a later stage of the cross-examination, in answer to the question whether, in his discussions with his brothers in making his choice of the red, silver and blue can, he or any of his brothers (Peter and John) discussed Red Bull, Mr Klimis replied "… we discussed that this is the colour I like… I asked Peter which colour he liked, which design he liked, and then I asked John, and the three of us concluded that we like[d] the LiveWire with the blue and red on it, right? That is what we discussed." When pressed for a complete answer to that question, Mr Klimis conceded that he or one of his brothers "may possibly" have mentioned in conversation between them that LiveWire "had a common colour, similar colour to Red Bull." I do not think that it would have been otherwise than incredible that Mr Klimis and his brother would not have carefully and fully discussed the implications of Sydneywide using the same colours as Red Bull, particularly colours with the same hue. Mr Klimis agreed in cross-examination that he gave approval to the final design of the LiveWire artwork after consultation with his brothers Peter and John, both of whom live in Sydney. 42 Mr Klimis accepted in further cross-examination that the lightning bolt on the LiveWire can was placed from the outset at the same angle as the blue and silver angle on the Red Bull can, but asserted that such similarity was a coincidence, and that on seeing the first sample from Mr Scarisbrook, he did not compare the angled lightning bolt with the blue and silver angle on the Red Bull can. When asked for how long he had been aware that the angle on the LiveWire can was the same angle as the angle on the Red Bull can, he replied: "When finished artwork was given to me, right? I don't look at it as an angle, I look at it as a lightning bolt". Mr Klimis faxed the following communication back to Mr Scarisbrook on 27 May 2001: "We liked your concept on LiveWire but [it] looked a little plain, I have sketched an idea, please see what you can do. Time factor has become very critical." Mr Klimis denied that the diagonal line appearing on such accompanying sketch was intended to evoke the diagonal line on the Red Bull can, being a denial which I have difficulty in accepting as credible. 43 What Mr Klimis described as "modified artwork" was thereafter said by him to have been received from Mr Scarisbrook in several versions, each of which continued to exhibit angled lightning bolts. When asked whether such versions had "come closer to the Red Bull can than Mr Scarisbrook's original design", Mr Klimis initially avoided a direct answer, saying what seemed to me to be a likely rehearsed response as follows: "I agree that this design has come closer to be more symbolic of the name LiveWire. But to me LiveWire means electricity, energy that is a definite thunderbolt of electricity and it becomes very symbolic of that." When pressed with that question, he answered the same in the negative. Significantly, Sydneywide did not expose Mr Erceg, or Mr Casey (also of Independent Liquor), Mr Scarisbrook, or his father or brothers to cross-examination, in order to enable any of them to corroborate his own testimony. I would infer that their testimony would not have relevantly assisted Sydneywide's case: Jones v Dunkel (1959) 101 CLR 298. Mr Klimis agreed that he had last spoken to Mr Scarisbrook "Maybe two months ago, six weeks ago", and that Mr Scarisbrook undertook all of the draft designs and the final design. 44 On 12 September 2000 Mr Klimis faxed a further communication to Mr Scarisbrook as follows: "Sorry for the delay, but I have a lot of things to organise for the Olympic deliveries. Please have a look at the additions I have included. Can you please also send me a version in 'green' as my partners would like to compare. Waiting on the 'mock-up' can." Mr Klimis denied that the request for a version in green for comparison purposes had been sought because he and his "partners" (presumably there referring to his brothers) were concerned that the LiveWire get-up was getting too close to Red Bull's packaging. In relation to the additions referred to in such fax of 12 September 2000, the following cross-examination of Mr Klimis occurred: "You changed the words, liquid energy, to energy drink? – That's correct. I suggest we know these are energy drinks but I suggest the reason that you did that there was because Red Bull has got energy drink in the middle of its can?--- I mean, it is an energy drink, it's LiveWire Energy Drink, that is its registered name as well. Let's assume that it's appropriate to put the words, dietary supplement on the can, you decided to put them on the front of the can there, as you draw an arrow there to the bottom right-hand corner because Red Bull has the words, "dietary supplement", on the bottom right-hand corner?--- No, I believe it's compulsory that we have to put dietary supplement, formulated dietary supplement and there it was an appropriate place for it because at that stage I wasn't even sure if we were going to use a logo or turn up the voltage or something. But in that drawing you suggested or required that the words, dietary supplement be placed at a position that is the same as the words, dietary supplement on the Red Bull can?--- It's probably coincidental then. Could you go to the back of the Red Bull and you see it says written in red: Red Bull energy drink especially developed for time of increased stress or strain. ?--- Yes. When you wrote balanced energy drink especially formulated, etcetera, did you have the Red Bull can in front of you?--- No, I believe there are quite a few people who use this, especially developed concept. Did you get any of those dot points from Red Bull?--- No. If, if, no I did not, I believe that the same concept, or same layout is used by Liquid B as well. What about the words, "Physical endurance, concentration," and a bit further down the bottom right, "Stimulate."?--- No, this is something that I just wanted. We were toying with the idea to put on to the can (sic), to give us a logo. I want to suggest that when you were doing these drawings, these changes on the design, you were consciously trying to sail as close to Red Bull as you could?--- No, no, a lot of these, a lot of the wordings that you see here is common to a lot of the brands on the marketplace." It was also put to Mr Klimis that the design of the artwork for LiveWire was changed from certain initial non-parallel lines to parallel lines, so as to present similarity in facings, a further proposition which he denied. I did not find Mr Klimis' foregoing answers in cross-examination to be satisfactory, much less persuasive, particularly his above reference to "probably coincidental". 45 In the result, a copy of further artwork was received from Mr Scarisbrook, which still exhibited the angled lightning bolt, but according to Mr Klimis contained "different coloured blanks". Mr Klimis' brothers Peter and John were said to have then been consulted, and each is said to have expressed preference for the red, blue and silver combination of colours. Mr Klimis accepted that "possibly", he and his brothers may have mentioned that this artwork had a common or similar colour to the Red Bull can. Further refinements continued, involving changes in words appearing on the draft artwork for the time being. On 30 October 2000, Sydneywide's fax of 30 October 2000 to Mr Casey of Independent Liquor contained the following message: "Thanks for the update on LiveWire can. Everything is OK except needs a space between 'energy drink' and 'specially formulated'. Consider artwork approved. Richard please speed up the process for the can also the 330ml bottle Frank is working on. I am that desperate I would like to launch the bottle before the can, due to time factor." Finally on 15 November 2000, Mr Klimis faxed to Mr Scarisbrook as follows: "Excellent that it is finished. Please do what has to be done to get the ball rolling. I need stock asap. Label looks good." 46 One further passage in the course of the cross-examination of Mr Klimis warrants reproduction as follows: "Now, when you suggested the change to Taurine and Guarana at the top?---Yes. Were you aware that Red Bull had Carbonated Taurine Drink at the top of their can?--- I was aware that they had the word, carbonated, on it, yes. What about Taurine?--- Taurine, Taurine is a – yes, I knew that they had Taurine in it, yes. You knew they had the word, Taurine, at the top of the can where you wanted to put Taurine?--- I knew that they had Taurine, Carbonated Taurine on the top of the can, yes. Where you wanted to put the word, Taurine and Guarana?--- Yes, it was – I'm using it as a descriptive element. You knew that Red Bull had the word, Taurine, amongst other words, at the top of the can in about the same place where you were dropping off liquid energy and putting on Taurine and Guarana?--- Yes. But Frank here in this diagram is repeating himself, he's got liquid energy on the top and he's got liquid energy under Live Wire as well." What precisely appears at the top of one area of Red Bull's packaging is "Carbonated Taurine Drink with Caffeine. Serve Ice Cold", and what appears at the top of one area of LiveWire's packaging is "Carbonated Taurine and Guarana Drink". The reference in the above passage to "Frank" was to Mr Scarisbrook. Finding as to Sydneywide's intention 47 The testimony of Mr Klimis which I have reviewed above, and the evolution of circumstances thereby addressed commencing from November 1999, has lead me to the conclusion that Sydneywide intentionally adopted a get-up for the packaging of its LiveWire product for the purpose of appropriating part of the trade or reputation of the Red Bull Applicants, essentially by means of the design and colour scheme of the packaging which it progressively and ultimately adopted. I say 'essentially', because there was also an element of adoption of Red Bull's packaging ingredient descriptions, to the extent exposed by the cross-examination of Mr Klimis reproduced in [46] above. I am unable to accept the submission of Sydneywide that its choice of the trade mark LiveWire and the design of the so-called lightning bolt symbol on its packaging "puts paid to the argument". Put another way as sometimes echoed in the authorities, Sydneywide selected a get-up for its LiveWire product which would "sail as close to the wind" as it thought to be expedient (see in that regard for instance the cross-examination of Mr Klimis in [44] above, where that proposition was put), in order to take advantage of the substantial market share for energy drinks in Australia which the Red Bull Applicants had already acquired in a reasonably short time by its very substantial and doubtless costly marketing, advertising and promotional activities undertaken in Australia since late 1997. I would draw the inference that the process of packaging design which Sydneywide put in place for its LiveWire product did not originate, as it were, from the sidelines. As a distributor of the Red Bull product commencing from late 1999 or early 2000, Sydneywide had been well placed to assess the very favourable impact in the marketplace which Red Bull Australia had been experiencing as a consequence of its advertising and promotional activities in Australia which commenced in late 1997. Mr Klimis did not disagree with the proposition that during the time he was engaged in the course of discussing and approving the design of LiveWire's packaging, Sydneywide had sold "literally hundreds of thousands of cans of Red Bull". Sydneywide's financial outlays upon advertising and promotion of the LiveWire brand appear to have been minimal (see [35] above), and I would infer that part of Sydneywide's strategy in "sailing close to the wind" was to gain indirectly for LiveWire the benefit flowing from the advertising campaign of Red Bull which so generously features the red blue and silver hue colours, and the benefit generally of the impact which the Red Bull product had thus far experienced in the marketplace. In the result, I do not accept Mr Klimis' testimony that Sydneywide planned from the outset merely to target competitively the energy drink producers whose retail prices pitched at the lower end of the retail market, in contrast to the retail prices of Red Bull. More detail about retail prices, and to the extent of any material differences, is provided for instance in [50] below. Particularly given the commercial relationship which existed between Red Bull Australia and Sydneywide prior to the launch of LiveWire, Sydneywide could readily have taken Red Bull Australia into its confidence, if only as a matter of courtesy, if no conflict was thought genuinely by Sydneywide to be likely to arise with the Applicants. The expert evidence 48 Each of the parties enlisted the assistance of highly qualified experts in the field of marketing, in the case of the Red Bull Applicants, Dr G R Beaton, and in the case of Sydneywide, Ms L J Strachan. Each gave their respective evidence thoughtfully and impressively. The main areas of debate and difference between their respective theses are addressed below. Each expressed his or her opinion based largely upon factual material disclosed in the affidavit evidence adduced by the parties, including of course the exhibits thereto. Dr Beaton's testimony was significantly longer than that of Ms Strachan, mainly because of his comprehensive affidavit in reply. I acknowledge that whether or not the packaging of LiveWire is misleading or deceptive is of course ultimately a question for the Court. 49 One area of debate and disagreement between the experts related to Red Bull's promotional and marketing strategy. Dr Beaton identified Red Bull's target market as "people who need energy", whereas Ms Strachan identified the same as "sophisticated young drinkers" for whom Red Bull served as a so-called "badge" or "fashion" product. Ms Strachan pointed to the circumstance that Red Bull marketing had largely occurred in "off premise" distribution channels, such as pubs, clubs, musical festivals, and sporting events. So much appears to have been largely true, at least in the early days of the Red Bull product's shelf life, but as Dr Beaton responded, there has since occurred a substantial broadening of the target of Red Bull's promotional activity, in the context of its expansion into retail selling in grocery and convenience stores (see in that regard the Applicants' confidential exhibit "PD-23"). Additionally, Ms Strachan pointed to Red Bull's marketing research, as well as its marketing campaigns, in support of her foregoing thesis. Dr Beaton sought to join issue by emphasising, first, that market research for a new product must obviously start somewhere, and the effective use of available research funds usually warrants initial focus on one segment of the market and not its totality. In any event, Mr Beaton postulated that the promotional creation of an association of youth does not exclude older people. His studies demonstrated that the Red Bull market is not defined by brand associations with virility, vitality, youthfulness and strength, because "there are other elements of the market… which are not sexually or physically related to energy but [include] stamina, studies, staying awake, late night shift workers, for example". In short, Dr Beaton's response to this area of Ms Strachan's thesis was that it tended to confuse image with target market. I thing that Ms Strachan probably adopted an overly narrow view as to the identity of Red Bull patronage as "sophisticated young drinkers". I have not found this area of the debate between the experts to have contributed significantly to the resolution of the passing off issues. After all, what is the subject of focus in the proceedings is simply an energy drink, and not something inherently or necessarily related to the requirements or interests to youth alone. 50 Another area of debate between the experts related to the significance or otherwise of the retail price of the respective Red Bull and LiveWire can products, the difference being set out in the first table in [20] above. However the evidence adduced from a solicitor in the employ of Sydneywide's retained legal representatives as to price differences existing in three particular "impulse channel" outlets (ie convenience stores) on the same day demonstrates in one out of three examples a materially different picture as to any uniformity of pricing levels of Red Bull in comparison with LiveWire: see the second table set out in [20] above. Ms Strachan's view was that price does play a part in brand selection, where there is no apparent practical or functional difference between two competing products, and particularly is that so in the case of fashion products. She exemplified the circumstances of supermarkets, in the context of which consumers will react to price differences of merely five or six cents, and postulated that one reason for such consumer reactions are intangible factors such as the image of the different brands. Ms Strachan's conclusion was that the differing price structures between the respective products would produce the following consequences in the marketplace: "The Red Bull regular consumers who respond positively to the Red Bull brand image would notice the price difference and would not be likely to switch to the lower priced product which has such a different image. Such consumers would be dismissive of the LIVE WIRE brand because it is cheaper and because it lacks the style which they relate to in the Red Bull product. In my opinion, those who are attracted to and familiar with the Red Bull product would be quite likely to dismiss the LIVE WIRE brand as an inferior product. They would not be at all likely to assume an association between the two products, but would see the LIVE WIRE brand as a competitor for those with less taste and style than they themselves who are able to appreciate the superior attributes of the Red Bull imagery. They see it as their brand and believe that it projects the appropriate image. They would assume that the lower priced product would be inferior in some way. Not necessarily in the taste but in some undefinable way." 51 One difficulty with Ms Strachan's emphasis upon price differences, so Dr Beaton contended, is that pricing is the most easily changed of marketing variables, and that whilst pricing is used as a "queue" for position in a market place, it need not remain static in quantification, and the same product can be priced variously in different channels of consumer patronage, as the findings set out in the second table in [20] above seem to demonstrate. Moreover as Dr Beaton continued, marketers have the benefit of price discretion, and can change the same more readily than packaging formulation or channels of distribution. In short, his thesis was that both the manufacturer and in turn the retailer can raise or lower the price of a product up or down as they wish, subject of course to the exigencies of competition for the time being. Dr Beaton's view derives support from the A C Nielsen data to which he referred, and which demonstrated that prices for energy drinks varied considerably over time for the same brand and between brands. Thus he caused to be purchased contemporaneously from a Coles supermarket in Victoria a Dirty Dog energy drink for $0.99, a Smart Drink energy drink for $1.29 and a Black Stallion energy drink for $2.35, each comprising a 250ml can. I have also not found this area of the debate between the experts to be of any decisive assistance. I prefer Dr Beaton's view that the price differences between the products are of insignificant materiality, once account is taken of the circumstance that they are both sold in a wide range of outlets. In any event, if a prospective customer misunderstands a LiveWire can for a Red Bull can because for instance of the colours of the packaging, he is hardly going to change his intended acquisition if he recognises that the price of LiveWire is lower than his expectation. 52 Ms Strachan's further thesis was that having regard to the range of colours used in packaging in relation to the energy drink market, it could not reasonably be postulated that the colours red, silver and blue used on the Red Bull can constituted defining features of that product. She accepted that colour is a useful method for consumers to distinguish between brands, but that it becomes less useful when so many brands were relevantly involved, as is the case here. Of at least twelve brands involved in the energy drink category known to her, she considered that five (other than Red Bull and LiveWire) used the colours red, blue and silver, namely Ikon, Dirty Dog, Red Eye, IQ and Smart Drink, whilst others used one or two of those colours. I interpolate to mention for completeness that two of such five identified brands are referred to in [19] above, namely Red Eye and IQ, and one of them (Red Eye) is also referred to in [29] above. I have caused to be prepared the following table showing the colours of all the energy drink cans which Sydneywide produced in evidence: Name of Drink Colours on Can "EK1" Exhibit Number Astro Blast 21 Blue, Silver and Gold 35 Black Stallion Red, Silver and Black 1 Bull Rush Orange Green, Blue and Yellow 17 Burn Blue, Yellow and Red 19 Dark Dog Yellow, Black and Red 18 Dirty Dog – Cactus Lemonade Purple, Green and Silver 23 Dirty Dog – Cola Black, Silver, Yellow and Red 21 Dirty Dig – Desert Dust Yellow, Red and Silver 20 Dirty Dog – Sour Puss Purple, Green and Silver 22 IQ Blue and Silver 12 Ikon – Harmonize Blue, Silver and Yellow 11 Ikon – Energize Red, Silver and Yellow 10 Jolt Cola Red, Black and Gold 24 Lift Plus Gold, Green, Blue and Red 15 Lipovitan Gold, Orange, Red 14 Liquid B Orange, Blue and Yellow 13 Live Wire Blue, Silver and Red 9 Red Bull Blue, Silver and Red 7 Red Eye Power Blue, Silver and Red 2 Smart Drink – Brain Fuel Red, Silver and Black 6 Smart Drink – Defence Aqua, Purple, Silver and Black 5 Smart Drink – Energy Drink Blue, Silver, Red and Black 4 Smart Drink – Happy Gold, Silver and Black 3 V Lime Green, Black and Silver 8 X Fuel Gold, Black and Red 16 The only two of the above brands whose packaging contains all three relevant colours in combination of red, blue and silver, apart from Red Bull and LiveWire, are Red Eye Power, in relation to which the amount of red and blue cover is relatively insignificant, and Smart Drink and there is absent from all of the above can packagings what Dr Beaton has described above as the "strong diagonal thrust design" embodied in the Red Bull and LiveWire cans. Smart Drink, according to the A C Nielsen survey of 24 December 2000, held only 0.3% of the market, and it did not even rate a recorded percentage in the survey of the preceding month. I think that Dr Beaton's response to Ms Strachan that "The brands she cites as having similar use of colour to Red Bull and LiveWire, in my opinion do not support her opinion that the colour scheme adopted by Red Bull is generic to the energy drinks category" is correct. Moreover it is important to have regard, not just to the fact of adoption of similar colour combinations, but to the arrangement and extent of use of the colour combinations, which vary significantly. 53 Ms Strachan's most significant thesis as to product differences between the Red Bull packaging and the LiveWire packaging lay within the different brand names or trademarks of Red Bull and LiveWire, and the fact that the latter brand words are displayed on the packaging in larger and different lettering than in the case of the former. Ms Strachan also emphasised the combination of the trade mark Red Bull with the unique and key feature of two bulls charging at each other. She contended that the larger the size of the trade mark displayed on a product, such as a grocery type product, the less likely it is that consumers will "pick up" the product without noticing the brand. Nevertheless she accepted that "The size of the trade mark is only one aspect of the total get-up of the pack", and that "Customers do in fact relate to the pack or "get-up" in its totality rather than to the individual components". In any event, she placed emphasis upon the LiveWire so-called "arrow", also described by Mr Klimis as a "lightning bolt" (see [42] above), and the association thereof to an electric charge or strong volt running "uninterrupted" from the top to the bottom of the can, and the contrasting horizontal line formed by the coloured squares on the Red Bull can, which she said created a "strong check appearance" or so-called "harlequin" appearance. Clearly this fourth factor as to different brand names or trade marks involves a highly significant factor to the resolution of the subject proceedings, to which I will later return in the formulation of my conclusions to this segment. It is of importance to record however that Mr Strachan did not propound the view that the difference in the brand names or trade marks of LiveWire and Red Bull (including their respective sizes) was anything more than "… only one aspect of the total get-up of the pack", albeit seemingly the most significant. 54 Dr Beaton's predominant focus was upon what he described as the "gestalt" of the Red Bull Brand. The notion of "gestalt" was described as "the overall identity of a brand as it relates to consumers", being the identity which included "… not only the name, colour, physical properties and packaging, but also associations with the brand and branding defects used to create associations, including its advertising and the 'channels' through which it is sold". Dr Beaton cited various writers of authenticity in support of this thesis, and in particular, the market studies they had undertaken. A brand is made up of a number of elements, so Dr Beaton continued, including in particular the brand name, product shape, colours, label design and brand associations, being associations assisted by advertising and the channels through which the product is sold. Many buyers of packaged goods, so he postulated, recognise and differentiate between brands on the basis of the overall look and feel of the product, and the total image of the product, where no single brand identity element is dominant, and where the whole is greater than the sum of the parts, such concepts falling within his description of the "gestalt" of the product. It followed, so Dr Beaton concluded, that where the gestalt of two products is almost identical, then without more information about such "look-a-like" products, some consumers are likely to perceive them as comprising the same brand and/or as derived from the same source. 55 By way of elaboration upon the theme described in [54] above, Dr Beaton continued with the following further observations and opinions in support of his gestalt thesis: (i) In a retail outlet, especially supermarkets and convenience stores, consumers tend to walk down aisles or move through sections of a store, glancing for the brand or brands they seek in their "consideration set"; in doing so, consumers use a brand's gestalt to recognise the brand, or their recall that they need more of a particular product, and they look for the product that most closely resembles the brand image they would associate with the brand they seek; alternatively, when some consumers recognise the gestalt of a well-known brand, they are "triggered" to realise they need more of such product; (ii) Carbonated energy drinks are for most consumers a relatively low involvement product that are purchased on a regular basis, which means that consumers do not spend much time making their purchase decision. The typical image of a shopper in a supermarket or convenience store is a kind of person foreshadowed in (i) above who moves quickly down the aisle, and tries to minimise the time spent in-store. This purchasing process applies to most products bought in supermarkets, where a shopping list might include dozens of items. Even in a convenience store, where a consumer's shopping list may be quite short, consumers will typically spend only a short time locating and choosing a product; these stores can be distinguished from destination stores, that is to say, stores with such appeal that consumers regard a visit thereto as a destination in itself (for instance some furniture stores); in convenience and supermarket stores, many brand decisions are made "in the last three feet" to the shelf. In this kind of close proximity, products on the shelf tend to be compared on a side-by-side basis, and this is how energy drinks are mostly presented to the consumer; it is in such kind of contexts that consumers look for the brand gestalt that they know, because that is the "key" way in which consumers are able to speed up their decision-making process; (iii) A brand can comprise either a single element or a combination of elements intended to identify the product, in order to differentiate it from competing products, and to generate certain specific associations in the mind of the consumer; the element or elements which may make up a brand in the mind of the consumer include the physical properties of the product, the brand name, brand symbols, designs or logos, colour, personalities associated with the brand, and brand packaging; the gestalt (or to use Dr Beaton's paraphrase "the overall identity of a brand"), as it relates to consumers, and includes not only such physical elements, personalities and packaging, but also associations with the brand and branding devices used to create associations, including the advertising and "channel" through which it is sold. I do not think that the criticism of Counsel for Sydneywide of "gestalt" as something "nebulous" and to be dismissed for that reason can be fairly justified; such of the foregoing elements as may be described as intangible in character simply arise from the promotion and marketing of Red Bull, which is doubtless the same which may occur in relation to the marketing of any product; (iv) Colour schemes also constitute brand elements, colour being one of the most significant components of the get-up that attracts consumer attention, and being a central method of communication which can become part of a corporate supplier's signature; instances cited by Dr Beaton include Kodak's use of gold, black and red, Cadbury's purple and Shell's yellow and red. Ms Strachan responded that such entities have been using those respective colours over decades, and have operated in markets involving few competitors, and in the case of Shell for instance, the connection is not just the yellow colour but a yellow shell graphic; Dr Beaton rejoined that once attention is attracted to a product, the colour with which it is associated continues to have an effect in enhancing the way consumers comprehend and elaborate brand meaning in their minds; he cited advertising research to the effect that colour is central to brand recognition, and posited that achievement of recognition correlates strongly with probability of purchase; whilst he would accept that advertisement or package recognition does not necessarily cause propensity to purchase, the published research he cites constitutes important empirical observation which sheds light on the value of maximising the communication power of printed material, such as advertising and packaging; (v) Dr Beaton would therefore conclude at this point of his thesis that recognition of the colour of a particular brand on products and product displays at point-of-sale may well be central to the promotion of that particular brand, and the likelihood of purchase by consumers; and (vi) Apart from colour, Dr Beaton cited authoritative research to the effect that physical properties such as shape and size, together with graphic elements such as symbols and label design, can be important in visually identifying a brand and creating brand associations, and can involve the key differentiating characteristics of a brand, particularly in the case of what he describes as "fast moving goods"; he cited the Crown Lager beer brand, presented in a tall conical shape, as an example of where shape is an important element in brand identity for consumers; he further contended that because visual images are often more easily recalled than words, a shape or symbol or graphic device can itself create awareness associations and feelings that may affect product loyalty and perceived quality; this theme is expanded at [57(v)] below. 56 According to the confidential Red Bull market research study in evidence (Confidential Exhibit GRB6), the Red Bull product, especially in the form of its get-up, has established, in Dr Beaton's opinion, a strong degree of brand "equity" with consumers, its get-up and its gestalt being the central and fundamental image which has been used in building consumer recognition and preference for the brand. In support of those opinions, Dr Beaton pointed to the following further features of Red Bull's packaging: (i) The appearance of the Red-Bull colour scheme already discussed in [55] above, being the only colour scheme (subject to the insignificant qualification in (ii) below) adopted since the launch of the product in Australia, which Dr Beaton described as having a blue and silver background with a central red element; he further described such colour scheme as a "very significant feature"; (ii) All such primary hue colours of red, blue and silver being distinctive, the combination of which creates a strong sense of identity; albeit that there is also an insignificant amount of gold colour appearing on the traditional package, he postulated that the same is nevertheless subordinated to the said three primary colours; there has also been used, apparently on very infrequent occasions not specified, a Red Bull can with a substantial amount of gold colour, which did not feature in the parties' debate of the issues to be resolved; (iii) The distinctiveness of the brand name Red Bull as presented in red colour, which has the effect of reinforcing the colour scheme of the package; (iv) A set of brand associations linked to the word "bull", such animal tending to be associated with virility, strength, vitality and energy; (v) The product shape, comprising chiefly a relatively tall, slim-line 250ml aluminium can, having approximate dimensions of 13.5cm in height and 5.2cm in diameter; such height and diameter dimensions of the can are said by Dr Beaton to be unusual when compared to a typical aluminium can used for most soft drink cans; he rightly pointed out that most other brands of carbonated energy drink in Australia (such as those cans used in association with brands earlier identified) have utilised a similarly proportioned can, but he testified that in all other major respects, leaving aside the LiveWire can, such other brands possess differentiating elements in their respective get-ups (I should interpolate to mention that Sydneywide submitted that it was part of Dr Beaton's thesis that the 250ml can was distinctive to Red Bull, but I do not read Dr Beaton's evidence as so asserting any such obvious inaccuracy); and (vi) The label design and layout, having the main features of a steep diagonal line or thrust which runs from top right to bottom left, created by the positioning of trapezium shapes made up of alternating blocks of the colours blue and silver, of the placement of the words "energy drink" in red capitals below the bull device, and of the rear panel made up of a silver background containing a significant horizontal text in small letters, partly in red and the remainder in blue. 57 Such features of the Red Bull packaging, when viewed as a combination of product colour and labelling, was said by Dr Beaton to connote a strong linkage to physical and emotional benefits for consumers, physical in the sense of increased endurance, concentration, and stimulation of metabolism as conveyed by the ingredients taurine and caffeine, and by the labels "dietary supplement" and "energy drink", and emotional in the sense of mental stimulation, virility and vitality linked to the name Red Bull, to the use of the bull device, and to the claim "vitalises body and mind"; all such brand associations, in the view of Dr Beaton, are likely to have been reinforced and augmented by Red Bull's marketing activities. 58 Based upon the foregoing observations and contentions, Dr Beaton's conclusion was that the packaging and gestalts of Red Bull and LiveWire are confusingly similar for the following reasons: (i) the almost identical red, blue and silver colour scheme of the packaging of both products; (ii) the similar ingredient platforms of both products; (iii) the similar design and layout of the front panels for both products, each incorporating a diagonal thrust element counter-balanced by a horizontal line element; (iv) identical product container designs, being the distinctive 250ml cylinder can; and (v) an almost identical positioning of both products in the minds of the target market, each conveying associations of "youth, energy, vitality, strength and the like", due to their colour, packaging and labelling. 59 Ms Strachan did not to my perception dismiss Dr Beaton's gestalt thesis as some kind of marketing heresy. She agreed that "Consumers do relate to the pack or "get-up" as a total rather than to the individual components". Her main response was to emphasise what she saw as the pre-eminent significance of the LiveWire packaging, namely that "The larger the size of the trade mark the less likely it is that a consumer will pick up the product without noticing the brand", and of course the brand "LiveWire" in the context of its packaging is framed more largely than Red Bull. Ms Strachan distilled as pre-eminent the following three features of the Red Bull packaging get-up: (i) The Red Bull name positioned in the centre of the can; (ii) The Red Bull logo, comprising the charging red bulls with a gold disc behind them, and positioned in the centre of the can, in relation to which the Red Bull has adopted the slogan "gives you wings"; and (iii) The harlequin style check made up of the blue and silver squares placed at an angle. I should interpolate to explain the above reference to "harlequin style check", the word "harlequin" having already been mentioned in [53] above. Sydneywide's written submissions described the "harlequin check" pattern on part of Red Bull's packaging as "the blue and silver checked pattern", thereby picking up Ms Strachan's observation that "the 'vertical' line of the harlequin check pattern is admittedly inclined at an oblique angle, but the pattern remains clearly and distinctly that of a harlequin check, with colours diagonally opposite each other being the same". The main contrasting features of the LiveWire packaging, which Ms Strachan would identify, were said by her to be as follows: (iv) The LiveWire brand name (and trademark), which is written in large red letters with a white outline, being so large (and "brash" as she so described) as to play a differentiating overall image of the product from that of the Red Bull pack; and (v) The blue lightning bolt which runs the full length of the can on a silver background, which she would describe as distinct from the check of the Red Bull can created by the horizontal line formed by the coloured squares. Doubtless she would assert that the same contrasting features as existing in relation to the packaging of the LiveWire bottle, in addition to which there is of course the additional factor of the difference in container size and shape. Conclusion on expert evidence 60 I do not accept the contention of Sydneywide that Dr Beaton's postulation of gestalt extends impermissibly beyond permissible limits of the traditional concept of get-up, as understood and referred to in the authorities. The promotion and advertising of the get-up of the packaging of a product to be eaten or drunk is not always entirely clinical in terms for instance of its chemical composition or its physical effect upon the human body, but often extends to other supposed beneficial effects of for instance a metaphysical kind, and for that purpose, advertising and promotion frequently purport to accord a certain imagery to a product in order to encourage public patronage of the product. That is why Dr Beaton has sought to postulate what he has described as the "total imagery" or "brand associations" of Red Bull, as established by the extensive advertising and promotion of Red Bull both before and after the product availability of Red Bull in Australia (see again [12-14] above). Ms Strachan has adopted a not dissimilar approach to brand imagery or associations by recourse to what she would identify as variations in the respective "badges" or "fashions" of the respective Red Bull and LiveWire products (see [49] above). I do not think that Dr Beaton's characterisation of gestalt, or the so-called "total imagery", conveyed by the packaging of a product such as an energy drink, and the extensive advertising and promotion of the product by reference to its beneficial advantages to human beings, falls outside of the kind of circumstances discussed in Schweppes Ltd v Gibbens (1905) 22 RPC 601 at 607, a discussion referred to with approval by a Full Court in Dr Martens Australia Pty Ltd v Rivers (Australia) Pty Ltd (1999) 47 IPR 499 at 515. 61 My conclusion is that Dr Beaton's analysis and thesis as to the colour, patterns and presentations which Dr Beaton described as a "very significant feature" in [56(i)] above, and as to the otherwise "layout" (to adopt Dr Beaton's description in [56(vi) above), of the respective packagings of LiveWire and Red Bull, at least in so far as the former extend to the 250ml cylinder can, and the potential impact of such packaging features upon consumers, as well as the scope of the target consumer market in terms of product pricing and age group attraction, are more cogent than the analysis and thesis of Ms Strachan. I do not think that Ms Strachan is correct in her estimation of the significance of the presentations of blue, silver and red colouring portrayed by the packaging of two other energy drinks whose packaging comprises those colours, namely the Red Eye and Smart Drink brands. One only need compare the Red Eye and Smart drink cylinders (listed in [52] above) to appreciate the contrast of each of the colour presentations of the Red Bull and LiveWire can packagings. Moreover there is an absence of evidence as to the nature and extent of the promotion (if any) of such brands, in contrast to those of Red Bull and LiveWire. Furthermore, the A C Nielsen material produced in evidence by the Applicants (see [16] above) provides no indication as to which of the respective Red Eye and Smart Drink brands has the blue, silver and red colour combinations. The Smart Drink can tendered in evidence also contains the colour black. I would conclude that the nature of the colouring presentations and lay-outs on the Red Bull and LiveWire packaging, in terms of their respective combinations of blue, silver and red in hues, stand in telling contrast on first impression, as well as on close analysis, to any other product packaging in evidence, the test of first impression being of course the most important for the purpose of assessing "lookalike" packaging in the context of passing off and deceptive conduct litigation. Moreover I think that Ms Strachan erred in failing to mention, or at least to give weight to, the strong diagonal thrust design contained in the Red Bull and LiveWire packages, being a design aspect which had been a uniquely striking feature of the Red Bull packaging long before LiveWire's entry into the marketplace. Such strong diagonal thrust is not materially diminished by the so-called "harlequin" appearance of the coloured squares on the Red Bull packaging, contrary to Ms Strachan's contention. Particularly when one stands back from the Red Bull and LiveWire cans when placed together, such steep line or thrust, which runs diagonally from the top of the Red Bull can to the bottom thereof, provides a telling impression of similarity to the equally strong feature of the so-called lightning bolt of the LiveWire can, which comprises a similarly diagonal angle from the top to the bottom thereof. No matter how often one casually picks up the Red Bull and LiveWire cans contemporaneously, or places the same together on a horizontal plane in alternative positions, one is impressed with an instantaneous perception of the similarity of get-up of the two packagings. Colour and colour combinations, particularly of cans such as those of the 250ml size here involved, tends to attract attention before brand names embossed thereon. Moreover, as I have earlier indicated, Ms Strachan's thesis as to alleged differing target markets in terms of people categories and of retail pricing is not in my estimation persuasive, for the reasons given in [49-51] above. These conclusions leave remaining for decision whether the critical factor of the differing brand names of Red Bull and LiveWire should nevertheless cause the litigation to prevail in Sydneywide's favour, which I will address in my "Summary and decision" segment below. 62 I should add for completeness that to the extent that it is appropriate to take into account the evidence of the only member of the public witness, namely Ms Carswell, I do not accept the attack on the reliability of her testimony made by Sydneywide. She testified that when she removed a LiveWire can out of the barrel fridge at a service station, intending thereby to buy a Red Bull can, she noticed the brand name LiveWire once the can was in her hand. Nevertheless she presumed that it was a Red Bull product, because she already knew that Red Bull was made in New Zealand, and such place of manufacture was also stated on the LiveWire can. Whilst she was mistaken as to the identity of the location of the service station which she visited, I have no reason to disbelieve the substance of the account of her experience on that occasion. This testimony of Ms Carswell was of a somewhat peripheral kind, though I observe nevertheless that in Australian Woollen Mills at 658, it was stated by Dixon and McTiernan JJ that "evidence of an actual case of deception, if forthcoming, is of great weight", and having regard to the circumstance that such kind of confusion evidence would not normally be something readily obtainable from a casual member of the public by a manufacturer, in relation to a mass produced item such as an energy drink, I would not dismiss Ms Carswell's testimony out of hand, as Sydneywide has urged that I should. A matter which has impressed me is how readily a mistake as to brand identity between Red Bull and LiveWire could be made by any person removing a Red Bull or LiveWire can from a retailer's fridge, based upon the "lookalike" packaging colours of either product, particularly if in circumstances where the brand name is not clearly enough in the direct view of the customer, at the point of sale, but instead is, for instance, wholly or partially facing the side or rear of a fridge comprising a particular point of sale. Once a situation of inadvertent choice of LiveWire for Red Bull was to occur, a casual buyer would not necessarily react adversely in the same way, for instance, as a buyer of furniture or clothing, where fashion and price are normally so much more important. As I have earlier pointed out, Sydneywide adopted the same ingredients as Red Bull (see [19] above). To adopt the adage of long established and often cited United Kingdom authority, "thirsty folk want beer, not explanations", or as here, an energy drink: see Montgomery v Thompson (1891) 8 RPC 361 at 368. Contrary to the often repeated submission of Sydneywide, I would reject as an over statement that only a "stupid" person would purchase a LiveWire energy drink can in the mistaken belief that it was a Red Bull energy drink which he or she had previously purchased, or else had previously seen promoted or advertised, "stupid" being Sydneywide's adoption of the description used by Einfeld J in Sony Music Productions Pty Ltd v Tansing (t/as Apple House Music) (1993) 27 IPR 640 at 647. Summary and decision 63 The findings which I have expressed in [47] above attract the application adversely to Sydneywide of the often cited dicta in Australian Woollen Mills extracted in [38] above, which Davies J for example recently paraphrased, in the context of s 52, in WD & HO Wills v Philip Morris Ltd (1997) ATPR 41-590 at page 44,146 as follows: "The intentional adoption of the features of a rival's get-up is eloquent testimony that it may succeed and is material from which the Court may more readily infer deception…" Deception is of course an element of the law of passing off, and as his Honour thereafter continued: "The principle has application in the present case, perhaps not directly but at least in the sense described in Apand Pty Limited v Kettle Chip Company Pty Ltd (1994) 52 FCR 474… at 488: 'the appellant engaged in a sophisticated analysis of the image which the respondent had created for its product as well as of the product itself… the appellant set out to duplicate the characteristics of the respondent's product in the sense that it sought to market a product with the same general characteristics as were to be found in the respondent's product'." The evidence which I have reviewed in detail leads to the conclusion that Sydneywide intentionally, if not also carefully and skilfully, set about the adaption of the most prominent features and characteristics of Red Bull's packaging get-up in the ways and to the extent postulated by Dr Beaton, though not of course the trade mark or brand name of Red Bull and the associated portrayal of the two charging bulls. As stated in the joint judgment of Wilcox and Einfeld JJ in Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1989) 89 ALR 48 at 69, the evidentiary value of the existence of circumstances of get-up adoption on the part of Sydneywide, which I have inferred (see [47] above), are highly significant to the drawing or otherwise of an inference of adoption and consequently of deception, since "the courts have long recognised that traders best know their trade". 64 That is not to deny that the actual appearance of packaging to prospective consumers is ultimately the determining factor, rather than the alleged infringer's intention per se. Whether or not the packaging of LiveWire is deceptively similar to that of Red Bull is of course essentially a question of fact for the Court to determine, with the assistance of any available expert evidence of value. The joint judgment of Dixon and McTiernan JJ in Australian Woollen Mills additionally stated at 659, in the context of what was earlier stated at 657 as set out in [38] above, that the Court's determination "… depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs". The obvious difference between the brand names of "LiveWire" and "Red Bull" appearing on the packaging is thus not decisive, even given that the latter is portrayed in an attractive context of the two charging bulls. For example in WD & HO Wills, the brand names respectively adopted by the parties to the dispute were "Summitt" and "Horizon" but that was not enough to escape an adverse finding of deception. Since the present is not a trade mark case, I bear in mind, as was pointed out by Gummow J in New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1989) 86 ALR 549 at 589, that "… the essential comparison in an infringement [of trade mark] suit remains one between the marks involved, and that the Court is not looking to the totality of the conduct of the defendant in the same way as in a passing off suit". Such observation as to the need to look to the totality of the conduct of the alleged deceiver in passing off proceedings was cited with approval by a Full Court (Ryan, Branson and Lehane JJ) in C A Henschke & Co v Rosemount Estates Pty Ltd (2000) AIPC 91-640 at 38,268, which observation would also apply in relation to an action for misleading and deceptive conduct, as well as to an action for passing off, since misrepresentation is an essential element in the tort of passing off: Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 308 and 340 per Lockhart J, at 355-6 per Gummow J and at 378 per French J, and fraud is not a necessary ingredient in either: B M Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1977) 51 ALJR 254 at 258 per Gibbs J. 65 The circumstances of the present complaint by the Applicants bear some material similarity to those summarised by Burchett J at first instance in Kettle Chip Co Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152, whose judgment was upheld by a Full Court (see below at [71]). At 161, his Honour commenced his discussion of the applicable approach to the circumstances in that litigation as follows: "Of course, a person who places the packets before him, side by side, can also see differences. But that is not how passing off by the imitation of another trader's mark or get-up is to be tested. In general, and more particularly in the case of an item likely to be purchased for a small price without long consideration, the comparison which must be made is between the impression of the applicants goods retained in a customer's mind and the impression made by the sort of consideration he is likely to give to the respondent's product before purchasing it. Only a rare potato chip consumer, who has previously studied the applicant's packet, is likely to go through that exercise again upon seeing a packet, some time later, on display in a service station or a corner shop. If, as he passes it, it appears to him to be the "Kettle" product he liked before, or another flavour put out by the same people, he is very likely to purchase it without further examination." His Honour referred in this context to the dictum of Lockhart J in Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460 at 474 concerning "… the mere seconds which are frequently involved in making decisions to buy many products". I would interpose here to refer to decision-making by shoppers "in the last three feet" to the shelf, to adopt Dr Beaton's description in [55(ii)] above. `In Kettle there was a common use by both parties of the word "Kettle" in their respective brand descriptions, but his Honour did not purport to treat the existence of that factor as essential to the grant of relief, but rather as one of the factors bearing upon his conclusion to the effect that the tort of passing off had been committed. Rather his emphasis was on the product impression conveyed to the casual shopper who was, as here, in the market for mass produced selling of a product for a small price. Particularly in such product contexts, sufficient similarities of get-up may conceivably relate to elements of colour, shape and size, and thus to the existence of passing off, irrespective of the use by the competitor of a different brand name: see for instance Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491; [1990] RPC 340 (HL). 66 Burchett J discussed in Kettle the significance of the passage in Australian Woollen Mills set out at [38] above, and in that context extracted the following text from the decision of this Court in Freeman Cosmetic Corporation v Jenola Trial Pty Ltd (t/a South Pacific Cosmetics) (Jenkinson J, 18 October 1993, unreported), being a case where the display of the respondent's hair care products in its bottle containers was strikingly similar to those of the applicant, though bearing a plainly different brand name. Jenkinson J observed as follows: "the trade names do not attract the eye unless the parties' bottles are viewed together. What attract the eye, in the case of each of the parties' bottles, are the general shape of the bottle (including its cap), the vivid fruit or floral label, as without careful inspection the representation appears to be, the clearly defined rectangular areas superimposed on the top and the bottom of that representation and a clear, spare black print on white background within the rectangles. Those are the features which remain in recollection. Because the applicant's bottles are not sold by retail where the respondent's bottles are sold, the two distinctive trade names will not be brought to the consumer's observation together at the place where he decides to buy. I am persuaded that a substantial number of consumers of hair care products, being reasonable members of that class, had before March 1993 taken the get-up of the applicant's bottles to be indicative of a particular origin, and that of that number a substantial proportion were misled on seeing the respondent's bottles on Coles shelves, by the similarity of get-up, into the mistaken belief that they were looking at bottles of that particular origin." I have already referred at [61] above to the implications of competing packaging of different brands being present at the same point of sale. Burchett J mentioned that in the proceedings before him, the competing products would sometimes be sold together, but not invariably so, and a similar circumstantial inference may also be drawn in the present case. I see no reason why the force of the observations of Jenkinson J in relation to competing brands not being offered for sale "together" should not equally apply in principle to circumstances where competing brands are present at the same point of sale, but in circumstances where the retail shoppers' views of the brand names in dispute are only partially visible or not visible at all to the shoppers, or at least to one or more of them. 67 The circumstances addressed by the decision in this Court in re Remy Martin Amerique (O'Loughlin J, 19 February 1992, unreported) also bear comparison to those here present. In that case, as here, the trade marks or brand names used by the respective parties were different, albeit that each carried an Italian connotation. His Honour's reasons for conclusion in favour of the existence of passing off are instructive, and reflect the thrust of the conclusions which I have found in relation to Sydneywide's conduct complained of: "But, if contrary to my findings, their conduct did not achieve, as a matter of law, the hallmarks of a passing-off, it did, at the least, cause confusion and it was the Respondents' intention to do so. I find that the Respondents set out to "cash in" on "Galliano's" reputation intending, so they hoped, to sail as close to the wind as they might without attracting legal liability. In this regard they failed. Either through need or greed – or both – they went too far; no complaint could have been made of the bottle shape that they adopted; the Applicants complained about the use of the name "Valentino" but failed to substantiate their complaint (the existence of a ladies fashion house of the same name was not seriously pursued as a basis for complaint and neither the evidence nor my own observations could seriously lead to a finding that it has been represented that the late film actor favoured or supported the Respondents' range of liqueurs). On the other hand, the Respondents could have, with ease, devised colour combinations for labels and pictorial scenes and printing far removed from the labels and get-up that had been used on the "Galliano" products for so many years and still achieve their desired Italian feel. Instead, they deliberately set out to use as much of the opposition's labelling and get-up as they thought safe – intending thereby to confuse a substantial part of the market. Standing back and viewing the matter objectively, I have concluded that they went too far." 68 The Australian authorities which I have thus far reviewed should be characterised as "rare", or else as having occurred in circumstances where the "failure rate is predicably high", so Sydneywide contends upon the basis of various text book commentaries. Counsel referred to Blanco-White and Jacob, Kerly's Law of Trade Marks and Trade Names (12th ed, 1986) at 401-2 where the learned authors stated: "It is usually true in some degree that a trader's goods are recognised as his or their general appearance or 'get-up'. Accordingly, resemblance of get-up is not uncommonly an ingredient in passing off, and it is possible for imitation of get-up alone to amount to passing off. Such cases of rare, since few traders rely on get-up alone to distinguish their goods, so that trade names and word trade marks are ordinarily present too; and in these days, in this country, a difference in names is enough to warn the public that they are getting one trader's goods and not the other's. Accordingly, there can hardly be passing- off by get-up alone… unless the resemblance between the goods is extremely close, so close that it can hardly occur except by deliberate imitation; and even that may not be enough… The relative importance to be attributed to names and word marks on the one hand, and to get-up on the other, is a matter upon which different people have different views; with the result that the outcome of disputes about get-up is exceptionally hard to predict." To similar effect are the observations of Webster and Page, South African Law of Trade Marks (3rd ed, 1986) at 450-451: "Where the get-up has been used in conjunction with a name or other word mark, the plaintiff faces a twofold difficulty: first, in establishing his reputation in the get-up excluding the mark; and second, in showing that whatever mark the defendant has used in conjunction with the get-up does not exclude the likelihood of deception. The failure rate in such proceedings has been predicably high." I observe the degree of qualification in the above passage from Kerly by reference to "deliberate imitation", a circumstance which I have found to be attributable to Sydneywide. In the light of the authorities emerging in the last decade which I have referred to above, I would prefer the description "unusual" to "rare". 69 I would infer that Sydneywide identified distinct advantages for the launch and establishment of LiveWire in a broadly dispersed marketplace for its manufactured energy drink, by causing to be designed by Mr Scarisbrook, and to be made by Independent Liquor in New Zealand, a packaging get-up which would likely be of significant advantage in the retail market-place for a newly emerging product in the form of LiveWire, without the need moreover for costly advertising and promotion, being an advantage available for exploitation as a consequence of the very substantial promotional and marketing activities which had been undertaken by Red Bull Australia in relation to the Red Bull product over the preceding three years or thereabouts (see in particular in the foregoing context [25] above). Sydneywide would have been able to readily identify the implications of such an advantage, particularly by reason of its substantial existing involvement in the energy drink trade as a distributor, and in particular as a major distributor of Red Bull as one of the two leading energy drink brands. Sydneywide would have appreciated the further advantage it held, as an already established distributor of the Red Bull product, to merchandise its LiveWire product in at least some of the places where it had been already distributing Red Bull. The temptation to market a product with packaging, which potential consumers would identify as similar in get-up presentation or "general characteristics" (adopting the Full Court's expression in Kettle referred to in [63] above) to the already heavily publicised Red Bull product, was something which I would infer was too great a temptation for Sydneywide to resist. Sydneywide would have doubtless perceived that from the normal or usual standing distance of potential retail customers of energy drink products from the shelves and refrigerated containers of retailers, there was scope for such customers to mistake the LiveWire product for the Red Bull product, particularly if no Red Bull product was also on display, or where both products were on display in circumstances where either or both brand names were not readily discernible. Even in the situation where both brand names were to be discernible at the point of sale to the potential customer, there would also be the "Ms Carswell" kind of customer, who might think that both products emanated from the same manufacturing stable, for all sorts of reasons, logical or otherwise. 70 The conclusion I would thus draw is that Sydneywide identified the opportunity to enter this new and expanding market, on the coat tails of Red Bull's massive promotional efforts and success already achieved as a co-market leader, at virtually no promotional cost to Sydneywide, as something too attractive to forego. As an already established large scale distributor of energy drinks, including Red Bull itself, Sydneywide was well placed to determine how it could most favourably exploit the advantage of Red Bull's very substantial publicity and promotional campaigns of the previous few years. Such exploitation occurred, for one matter, merely by Sydneywide refraining from advertising LiveWire otherwise, than at the most, to a very insignificant extent (see [35] above). Sydneywide was already delivering substantial quantities of the Red Bull product to persons with whom Sydneywide could readily connect as in effect existing retail customers of Sydneywide (see for instance [23] above). The prospective achievement of profitable levels of return, by manufacturing a product with packaging "sailing close to the wind" of Red Bull as one of the two market leaders, prompted and encouraged Mr Klimis to plan for and adopt the packaging get-up (and so-called gestalt) whereof the Applicants have complained to this Court. The expression "sail close to the wind", which I have used in my finding set out in [47] above, has been of course adopted in numerous Australian authorities (see for example Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 129 per Gummow J), and in my opinion, Sydneywide has sailed too close to obviate the Applicants' entitlement to the Court's intervention. Put another way, Sydneywide "went too far", the description used by O'Loughlin J in Remy Martin (see [68] above), by seeking to "cash in" on the reputation of Red Bull, and in so doing stepped over the lines of misrepresentation and deceit: see Twentieth Century Fox Film Corporation v The South Australian Brewery Co Ltd (1996) 66 FCR 451 at 467. 71 It is material to the conclusion which I have reached that the market for energy drinks is in the nature of an impulse market, as Dr Beaton has rightly postulated. As I have foreshadowed in [62] above, such market is distinguishable in that context from for instance, furniture and clothing retail markets, where potential buyers will customarily tend to first identify brand names before making their commitments to purchasing: see for instance Windsor Smith at 289, 293 and 295-6. Burchett J implicitly recognised this distinction in Kettle Chip (see the passage cited in [65] above, by his reference to "a small price without long consideration"). The following passage in Wadlow, The Law of Passing Off (2nd ed, 1995) at 429-430 is apposite to the present circumstances: "It is probably quite normal for customers selecting goods from supermarket shelves to go by some aspect of the overall appearance as much by the name. What is more difficult is to identify the precise visual clues on which the customer relies. Despite the fact that many of the brands of any particular commodity often bear an overall resemblance to one another, the eye seems to be able to distinguish them and select one without any conscious reference to the brand names as such. Unfortunately, there has been no objective analysis of this effect in the reported cases, and self-serving assertions of what is or is not distinctive do not help." I think that Dr Beaton's comprehensive evidence came to grips with the marketing phenomena, which the author is here speaking, more effectively than Ms Strachan. I do not think that she addressed, or addressed sufficiently, the significance of the circumstance, testified by Messrs Devereux and Scott Carter and noted by Dr Beaton, as to the manner in which a retailer's presentation of both the LiveWire and Red Bull cans at a given point of sale, particularly when placed together without both brand names being distinctively visible, may add to their respective similarities in a context of a few seconds decision-making. Especially would that be so where the decision-making relates to a product such as an energy drink having a retail price of the order spoken of in the evidence (see again [21] and [51] above). In de Cordova v Vick Chemical Co (1951) 68 RPC 103 at 106, Lord Ratcliffe said: "[I]n most persons the eye is not an accurate recorder of visual detail, and … marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole." 72 In the present proceedings, the shape and size of the 250ml can, in addition to the colour, attracted much attention in the presentation of the Applicants' case, the Red Bull product being sold only by means of such dimensional can: see [15], [56(v)] and [58(iv)] above. By far the majority of energy drink brands are in fact produced in 250ml cans (see [4] above). LiveWire has been produced and sold both in such sized cans and in 330ml bottles (see [34] above), supposedly in approximately equal numbers (see [35] above). The Applicants seek relief in relation to the LiveWire bottles as well as the LiveWire cans, but the focus of their case, and in particular the presentation of their evidence, has been related essentially to the packaging of LiveWire in the 250ml cans. Whilst to adopt the description used by the Full Court in Apand Pty Ltd v Kettle Chip Company Pty Ltd (1994) 52 FCR 474 at 482, the LiveWire bottle, as well as the packaging of the LiveWire can, embodies some of the "matrix of memory hooks" of the packaging of the Red Bull can, that factor is not sufficient enough to carry the day in favour of the Applicants. I do not understand Dr Beaton, at any rate explicitly, to have related his conclusions to the LiveWire bottle. The size and shape of the LiveWire bottle is sufficiently distinct from that which now represents the most common size and shape of energy drink bottle containers. 73 Does it follow that the conclusion which I have reached in relation to the cause of action for passing off applies also to the cause of action based upon s 52 of the Trade Practices Act, bearing in mind that both causes of action centre upon the notion of misrepresentation (see the concluding observations in [64] above)? In Mark Foys at 73 it was said that "s 52 is not restricted by common law principles relating to passing off but provided an additional remedy", thereby reflecting the observation of Mason J in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 205, where his Honour also spoke of s 52 providing "wider protection" to that of the tort of passing off. Sydneywide relied strongly in its submissions upon the factual circumstances involved in Parkdale, where a manufacturer of furniture had copied the trade dress or get-up of another's goods, but affixed thereto a distinctive and clear brand or label of its own, and was found not to have contravened s 52. As I have already pointed out however, there is a factual distinction, generally speaking, between deception concerning the kind of product here involved, and for instance the furniture and fashion clothing cases, since in the latter circumstances, prospective customers will tend to more closely examine the commodity, and in particular the label attached thereto, before committing to a purchase. The circumstances of the present case reflect more closely those addressed in the following passage from the judgment of Lockhart J (as a member of a unanimous Full Court) in Sterling Winthrop Pty Ltd v R & C Products Pty Ltd (1994) ATPR 41-308 at 42,124 as follows: "His Honour (the Trial Judge being Beaumont J) said it should also be borne in mind that, because they are inexpensive products (each sold under $2), and usually sold in supermarkets, it is reasonable to expect that consumers would not carefully study the labels on these products. It is more likely that decisions to buy this kind of product would be made quickly so that the first impressions of the consumer are likely to be important." and further at 42,126 his Honour continued: "Of course, one must examine the whole of the relevant material; but it must be kept steadfastly in mind that in the circumstances of misleading or deceptive conduct in relation to rival products of the kind with which this case is concerned, sales and market shares are determined by consumers' decisions in shops, especially supermarkets, where rival products are usually found side by side or close together in the same shelves and these decisions are made quickly and based on fleeting impressions." Here again, albeit in the context of s 52, one sees again judicial emphasis upon the distinction involved in circumstances involving inexpensive products from those of comparably more expensive products such as clothing and furniture (see again [21] and [51] above). 74 As stated by the Full Court in Windsor Smith at 290, "Once the primary facts have been found, the question whether conduct is misleading or deceptive or is likely to mislead or deceive is itself a conclusion of fact". Essentially for the reasons which I have advanced in support of my conclusion adverse to Sydneywide, I would further conclude that the conduct of Sydneywide complained of in these proceedings in relation to the packaging of its 250ml LiveWire can constituted misleading and deceptive conduct within s 52 in relation to the class of persons who would seek to purchase energy drinks in such containers, and thus be likely to be affected by such conduct: Parkdale at 199. I do not find it necessary to make any finding as to an additional contravention of any sub-paragraph of s 53 of the Act, none of which appears to have been isolated at least in the Applicants' written submissions. 75 The final principal issue in the proceedings is whether Mr Klimis was a joint tortfeasor with Sydneywide in relation to the conduct which I have found to constitute passing off, and in any event whether he was knowingly concerned in or a party to what I have found to be the misleading and deceptive conduct of Sydneywide, pursuant to s 75B of the Trade Practices Act. The evidence which I have reviewed, and the findings which I have made, demonstrate that Mr Klimis, as the self styled Managing Director, and, I would infer, the decision-maker or ultimate decision-maker of Sydneywide at all material times and in all material respects, was personally involved in such capacity in the process of design, and the ultimate choice of design, of the packaging for the LiveWire can, and that he had sufficient knowledge of the risks to which Sydneywide was exposed, if Sydneywide's conduct subsequently complained of did in fact and reality "sail too close to the wind". Taking up the expression "natural persons whose conduct brings about the contravention of the law by the corporation" used in Fencott v Miller (1983) 152 CLR 570 at 583 per Gibbs CJ, Mr Klimis was closely, as distinct from remotely, involved in Sydneywide's contravention of s 52 of the Act: Fencott at 584. Such evidence and findings are not however sufficient to render Mr Klimis liable at common law as a joint tortfeasor. Though he was the decision-maker for Sydneywide in the circumstances and to the extent indicated above, Sydneywide appears to have been a family company involving Mr Klimis' two brothers, and semble also his father, in varying capacities, as well as of course Mr Klimis. It was not a "one man company" in the sense described by Lindgren J in Microsoft Corporation v Auschina Polaris Pty Ltd (1996) 71 FCR 231 at 246. 76 In the result, relief should be granted by way of appropriate orders against each of the Respondents in relation to the LiveWire 250ml can. Pending the finalisation of such orders, I grant interim relief with liberty to apply. Since the Applicants have obtained substantial success, they should have in principle an order for costs of the proceedings in their favour. The further hearing of the Applicants' claim as to damages and for an account of profits will require appropriate orders by way of directions, once an appeal against the findings of the Court the subject of these Reasons for Judgment has been resolved. 77 The Respondents should therefore be ordered to pay the Applicants' costs of the proceedings. Although I have found in favour of the Respondents in relation to the LiveWire bottle, the reality is that the issues in the proceedings were contested essentially, if not almost wholly, in relation to the LiveWire 250ml can, in relation to which the Applicants have been successful. I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 3 September 2001 Counsel for the Applicant: Mr D K Catterns QC and Mr R Cobden Solicitor for the Applicant: Baker & McKenzie Counsel for the Respondent: Mr A B S Franklin Solicitor for the Respondent: Griffith Hack Lawyers Date of Hearing: 28-30 May 2001 Date of Judgment: 3 September 2001