Noodle Box Pty Ltd v Dave's Noodle Box [2002] FCA 579

FEDERAL COURT OF AUSTRALIA

Noodle Box Pty Ltd v Dave's Noodle Box [2002] FCA 579

INTERLOCUTORY INJUNCTION – application to restrain respondents from conducting any business under or by reference to the mark "Noodle Box" and from reproducing the applicant's alleged copyright work consisting of a restaurant menu – whether respondents' mark use of a sign substantially identical or deceptively similar to the applicant's mark – whether respondents used its sign in good faith - whether balance of convenience supported granting of injunction NOODLE BOX PTY LTD v DAVE'S NOODLE BOX & ANOR V 241 OF 2002 HEEREY J 1 MAY 2002 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V241 OF 2002

BETWEEN: NOODLE BOX PTY LTD ACN 078 757 614

APPLICANT

AND: DAVE'S NOODLE BOX ACN 093 584 948 and ANOTHER

RESPONDENT

JUDGE: HEEREY J

DATE OF ORDER: 1 MAY 2002

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. The application for interlocutory injunction is granted. 2. The operation of order 1 is stayed until 15 May 2002. 3. Costs are reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V241 OF 2002

BETWEEN: NOODLE BOX PTY LTD ACN 078 757 614

APPLICANT

AND: DAVE'S NOODLE BOX ACN 093 584 948 and ANOTHER

RESPONDENT

JUDGE: HEEREY J

DATE: 1 MAY 2002

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The applicant seeks an interlocutory injunction to restrain the respondents from conducting any business under or by reference to the mark "Noodle Box", or any marks substantially identical or separately similar to such mark, including the mark in fact used by the respondents – "Dave's Noodle Box". Similar relief is sought in relation to trading or offering for sale products or services under or by reference to the applicant's mark and also reproducing or substantially reproducing what is alleged to be a copyright work, consisting of a restaurant menu. 2 The applicant is the registered proprietor of Australian trade mark 786837 in class 42, consisting of the words "Noodle Box", registered from 26 February 1999, and Australian trade mark 786912 in class 42, consisting of the words "Noodle Box" with two crossed chopsticks and two stylised Asian characters, registered from the same date. 3 The applicant has developed a particular concept of Asian takeaway food and has to date opened seven stores throughout the Melbourne metropolitan area, three of which are franchised, and has three stores planned for South Australia and stores soon to open in Richmond and Geelong. 4 The respondents have operated takeaway food stores in Launceston and Hobart under the name "Dave's Noodle Box". Signs used show the words "Noodle Box" considerably larger than the word "Dave's" and a square mark with what appears to be Chinese or Japanese characters, with crossed lines appearing behind them. The first respondent has opened and has carried on such a business at the corner of Wellington and Brisbane Streets in Launceston since 19 August 2000 and a similar business at 350-352 Elizabeth Street, Hobart since 20 June 2001. 5 For present purposes the applicant relies on causes of action for infringement of trademark and copyright. Causes of action in passing off and contravention of s 52 of the Trade Practices Act 1974 (Cth) were raised but, as counsel for the applicant conceded, they add little, if anything, to the copyright and trademark claims. 6 Turning first to copyright, the copyright claimed in the applicant's menu is that of copyright in a literary work. There is a similarity in the parties' respective menus which to my mind passes beyond coincidence. Both have an identical shape of eight differently dimensioned sides; both have a picture of a takeaway box on the top right-hand corner and it appears from closer examination that a tear appearing on a flap of the applicant's box has been reproduced in the box appearing on the respondents' menu. The actual dishes listed in the menus are different, but on top of each one are the words "The original noodles in a box!" in the same typeface. 7 The only defence raised to the copyright claim is lack of identification of author, proof that the author was a "qualified person" within the meaning of s 32 of the Copyright Act 1968 (Cth)and proof that the applicant is the owner of any copyright subsisting in its menu. The evidence as to this is admittedly fairly sparse at the moment. In the first affidavit sworn on behalf of the applicant its managing director, Mr David Milne, merely says: "The applicant has also designed as part of the concept, distinctive Noodle Box menu cards (the menu card) which are displayed on each of the Noodle Box stores." 8 However, for present purposes, I would not be prepared to say there is no triable issue as to the question of authorship and the obvious strength of the applicant's case on the issue of copying strengthens the conclusion that there is a serious issue to be tried. 9 As to the claim for infringement of trade mark, counsel for the respondents properly conceded that the applicant had made out a serious question to be tried, particularly in relation to the word mark. He did say, however, that the case was not "overwhelmingly strong" because of two available defences, first, that the respondents' mark was not the use of a sign substantially identical with or deceptively similar to the applicant's word mark; and secondly, that within the meaning of s 122(1)(b)(i) of the Trade Marks Act 1995 (Cth), the respondents had used a sign in good faith to indicate the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services. The element of that defence relevant here, counsel said, was the characteristic of the provision of goods, namely noodles in a box. 10 To the extent that these defences are arguable, they do not in my opinion have sufficient weight to avail the respondents in the balance of convenience. The applicant points, rightly I think, to the dissimilarity in the size of the word "Dave's" and the size of the other words "Noodle Box" in the respondents' signs. As to the s 122 defence, the element of good faith may be difficult to establish, given the strong evidence of copying in relation to the menus. 11 Turning then to the balance of convenience, the applicant has evidence that it has invested some $190,000 in the design of the business concept of its outlets. As has been seen, there has been already substantial development by the opening of a number of stores. Although the applicants have not established a business, franchised or otherwise, in Tasmania and there is no real evidence of any immediate intention to do so, I think as a matter of reality that the value of a trade mark in connection with a nationwide franchise would be substantially diluted by the use of infringing marks by competing businesses in the same field. Moreover, the damage done would be of a kind which, while serious, might not be easy to quantify. 12 From the respondents' point of view, there is little, if any, evidence as to the damage they would suffer if subjected to the interlocutory injunction sought. Practically speaking, that injunction relates to the use of the name and the menus. As long as there was a name sufficiently distinguished from the applicant's mark, for example as counsel for the applicant suggested in argument, "Dave's Noodles", the respondents would be able to carry on their business uninterrupted. There has been very little expenditure in advertising of the respondents' businesses and I would infer that their prosperity depends largely on passing trade and the quality and value of the food and service they provide. The change of a name on the shop does not seem inherently an expensive operation, but in any event there is no evidence as to what in fact it would cost. 13 I think therefore the applicant has established a serious issue to be tried and the balance of convenience points in favour of the grant of the interlocutory injunction sought. 14 I will grant a stay of the operation of this order until 15 May 2002. There will be an order for mediation. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.