Mcdonald'S System of Australia Pty Ltd v Mcwilliam'S Wines Pty Ltd (No 2) [1979] FCA 109; (1979) 41 FLR 436 (21 December 1979)

FEDERAL COURT OF AUSTRALIA

McDONALD'S SYSTEM OF AUSTRALIA PTY. LTD. v. McWILLIAM'S WINES PTY. LTD. (No.
2) (1979) 41 FLR 436
Trade Practices

COURT

FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
Franki J.(1)

CATCHWORDS

Trade Practices - Whether conduct likely to mislead or deceive - Whether representation of sponsorship or approval or affiliation - Considerations relevant to grant of injunction - Evidence - Market surveys - Trade Practices Act 1974 (Cth.), ss. 52, 53(c),(d), 80. The applicant ran 103 retail fast food stores throughout Australia selling products including, inter alia, hamburgers advertised under the name "Big Mac". Total retail sales in the applicant's stores in Australia in 1978 were approximately $51,000,000 estimated to increase to about $75,000,000 in 1979. Approximately twenty per cent of sales comprised sales of "Big Mac" hamburgers. Extensive advertising including extensive television advertising was undertaken by the applicant such that the advertising of "Big Mac" had made a quite exceptional impact on the community exposed to the advertising.

On 14th and 15th March, 1979, the respondent caused to be published in three daily newspapers in Sydney and in one daily newspaper in Brisbane, advertisements showing pictures of three bottles of wine together with a number of glasses filled with wine. The advertisements contained various comments by persons including a reference to "Big Mac" and further contained on the top of the advertisement the words "Big Mac" and "McWilliams" in letters approximately half the size of the letters in the word "Big Mac".

The applicant sought the continuation of an interim injunction granted by Franki J. claiming an infringement of s. 52(1), s. 53(c) and s. 53(d) of the Act.

Held: (1) There is little significant distinction between conduct likely to lead to deception and conduct which is confusing.

Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. [1978] HCA 11; (1978), 140 CLR 216; R. v. Credit Tribunal; Ex parte General Motors Acceptance Corporation [1977] HCA 34; (1977), 137 CLR 545, considered.

(2) The measure of confusion which the relevant conduct will produce in this case is such that it will lead to a sufficient number of persons being likely to be misled or deceived on the question of whether or not there was a business connexion between the applicant and the respondent.

(3) The word "sponsorship" in s. 53(c) should be construed in a way appropriate to the construction of such a word in the section creating a criminal offence. The applicant had failed to establish that, even according to the civil onus, the respondent had represented that its wine had the sponsorship of the applicant.

(4) There was insufficient evidence to establish that the use of the name "Big Mac" in relation to the goods constituted a representation of the wine and that it had an approval which it did not have.

(5) "Affiliation" to which s. 53(d) of the Act refers is akin to "sponsorship" or "approval". It requires a positive link and it was not established that the advertisement contained a representation that the respondent had any affiliation with the applicant.

(6) In exercising discretion as to the granting of an injunction, the court should give no weight to the interests of the applicant but regard should be had to the effects of an injunction upon the interests of the respondent and of the consumers.

Hornsby Building and Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. [1978] HCA 11; (1978), 140 CLR 216, followed.

World Series Cricket Pty. Ltd. v. Parish (1977), 16 ALR 181; Phelps v. Western Mining Corporation Ltd. (1978), 33 FLR 327, considered.

(7) The applicant sought to tender a market survey comprising answers given by an interviewee recorded by an interviewer. They are an analysis of pieces of hearsay evidence and do not come within the existing exception to the rule against hearsay as they are tendered on the basis that the court should admit the conclusions of interviewers about what was said by interviewees and the document tendered purports to set out an analysis of the conclusion of the interviewers.

Quaere whether it may be possible in some future case for a form of market survey to be determined at a directions hearing.

A. Baily & Co. Ltd. v. Clark, Son & Morland (1937), 54 RPC 134, followed.

Customglass Boats Ltd. v. Salthouse Brothers Ltd., (1976) RPC 589, considered.

Subramaniam v. Public Prosecutor, (1956) 1 WLR 965, distinguished.

(8) Injunction granted restraining the respondents from using in connexion with the supply, or promotion of the supply for use of, wine, the words "Big Mac".

HEARING

Sydney, 1979, October 22-26; November 22-23; December 3-7, 10-13, 21. 21:12:1979
APPLICATION.

The applicant sought the continuation of an interim injunction granted by Franki J. claiming an infringement of s. 52(1), s. 53(c) and s. 53(d) of the Act.

The facts appear from the judgment.

A.J. Rogers Q.C., B.A. Beaumont Q.C. and G.Q. Taperell, for the applicant.

D.A. Staff Q.C. and D.P. Wilson, for the respondent.
Cur. adv. vult.

Solicitors for the applicant: Baker & McKenzie.

Solicitors for the respondent: Gregory & Co.
D. SHAVIN

DECISION

December 21.

FRANKI J. delivered the following written judgment.
This is an application for relief under s. 80 of the Trade Practices Act

1974 ("the Act") seeking to restrain the first respondent from using the words "Big Mac". The application is based on an allegation of conduct in contravention of ss. 52(1) and 53(c) and (d) of the Act. (at p437)

2. There was uncontested evidence before me that the applicant runs 103 retail stores throughout Australia. Stores are run in all States and Territories except Western Australia, Tasmania and the Northern Territory and about half of these are operated by the applicant and about half by the holders of franchises. These stores fall into the category of what are often called fast food stores. There are facilities for customers to sit down and eat although a significant proportion of customers take their food and drinks away with them. Each of the stores sells substantially the same range of products which include hamburgers, deep fried chicken, potato chips, fish, apple pies, milk shakes and soft drinks. One of the products sold in the applicant's stores is advertised under the name "Big Mac" and is a particular type of hamburger. The total retail sales in the applicant's stores in Australia in 1978 were about $51,000,000 and it is estimated that this year the figure will increase to about $75,000,000. In 1978 the total number of transactions was in excess of 23,000,000. About twenty per cent of these sales were of "Big Mac" hamburgers. Almost 50,000,000 "Big Mac" hamburgers have been sold through the applicant's stores since 1971. A great deal of advertising, including extensive television advertising associated with World Series Cricket matches, was in evidence. This advertising was during the 1977-1978 and 1978-1979 cricket seasons in Australia and the words "McDonald's Big Mac" were prominently displayed. A great variety of display material, pamphlets, books and assorted advertising material for the product "Big Mac" in association with the name "McDonald's" was also in evidence. It seems that the advertising of "Big Mac" has been so extensive and carried out in such a variety of ways that it has made a quite exceptional impact on the community exposed to it. In 1978 in excess of $2,000,000 was spent on television, radio and press advertising and in 1979 the advertising budget was in excess of $3,000,000. In most advertising the words "Big Mac" was featured prominently. (at p438)

3. The respondent on 14th March, 1979, advertised in the Daily Telegraph and in the Sun and on 15th March, 1979, in the Daily Mirror and the Courier Mail. These newspapers are daily newspapers, the first three being published in Sydney and the last in Brisbane. Each of the advertisements were the same and showed pictures of three bottles of wine, each two litres in size; and a number of glasses filled with wine. The advertisements also contained various comments by persons described as "Top wine writers". The comments were about "Rosedale Dry Red" and the labels on the bottles featured the name "McWilliam's" and "Rosedale" and described the contents of one bottle as "Dry Red Table Wine", another as "Medium White Table Wine" and the third as "Dry White Table Wine". One of the comments was by a Mr. Peter Wilson who said about the wine that "I call it the 'Big Mac'". (at p438)

4. The main complaint of the applicant about the advertisement was the appearance on the top of the advertisement of the words "Big Mac" in letters about three and a half centimetres in height and extending over the major part of the top of the page. Above these words appears the word "McWilliam's" in letters about one and a half centimetres in height. (at p439)

5. I granted an interim injunction which, in substance, restrained the use of the words "Big Mac" by the respondent in trade or commerce, in connexion with advertising wine until the hearing of the action. (at p439)

6. The applicant claims that the use of the words "Big Mac" by the respondent constitutes, in trade or commerce, engaging in conduct that is misleading or deceptive or is likely to mislead or deceive within s. 52(1) of the Act. It also claims a contravention of s. 53(c) of the Act and alleges that the advertisement constitutes a representation in trade or commerce in connexion with the supply or possible supply of wine or in connexion with the promotion by any means of the supply of wine that the wine has a sponsorship or approval which it does not have. It also alleges a contravention of s. 53(l) of the Act that, in the same way, the advertisement represents that the respondent has a sponsorship, approval or affiliation which it does not have. (at p439)

7. The main questions for determination are: 1. Will the use by the respondent of the words "Big Mac" or "McWilliam's Big Mac" in trade or commerce be conduct that is misleading or deceptive or is likely to mislead or deceive within the meaning of s. 52(1) of the Act? 2. Will the use of the words "Big Mac" or "McWilliam's Big Mac" by the respondent in trade or commerce in connexion with the supply or possible supply of wine or in connexion with the promotion by any means of the supply or use of wine be a representation that the wine has a sponsorship or approval within the meaning of s. 53(c) of the Act which it does not have? 3. Will the use of the words "Big Mac" or "McWilliam's Big Mac" by the respondent in trade or commerce in connexion with the supply or possible supply of wine or in connexion with the promotion by any means of the supply or use of wine be a representation that the respondent has a sponsorship, approval or affiliation within the meaning of s. 53(d) it does not have? 4. If the answer to question 1, 2 or 3 is yes, should an injunction be granted? (at p439)

8. I will consider these questions separately.

QUESTION 1 (at p439)

9. Is the relevant conduct conduct which is "misleading or deceptive or likely to mislead or deceive"? The High Court has considered s. 52(1) as it was before the words "likely to mislead or deceive" were added. In R. v. Credit Tribunal; Ex parte General Motors Acceptance Corporation, Australia [1977] HCA 34; (1977) 137 CLR 545 Mason J. said in his judgment with which Gibbs, Stephen and Jacobs JJ. agreed that: "'Misleading' is a word which is capable of expressing various shades of meaning, sometimes signifying that which is subjectively misleading and at other times that which is objectively misleading. Its meaning therefore is apt to be influenced, indeed decisively influenced, by the context in which it is found. Here the setting in which s. 52(1) appears is shown by the headings 'Part V - Consumer Protection' and 'Division 1 - Unfair Practices'. In this context the prohibition contained in the sub-section emerges as an important general prohibition against a corporation in the course of trade or commerce engaged in a form of conduct, a trade practice, which is unfair" (1977) 137 CLR, at p561 . (at p440)

10. In Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. [1978] HCA 11; (1978) 140 CLR 216 the High Court considered the section before amendment in some detail. Stephen J. with whom Jacobs J. agreed, said: "In determining the meaning of 'misleading or deceptive' in s. 52(1) and in applying it to particular circumstances the law which has developed around the tort of passing off, founded as that tort is upon the protection of the plaintiff's intangible property rights, may not always provide any safe guide. However, the long experience of the courts in that field should not be disregarded, some principles which have been developed appear equally applicable to s. 52(1)" (1978) 140 CLR, at p 227 . Barwick C.J. and Aickin J. did not disagree with the passage I have cited. (at p440)

11. The first matter to be considered is whether there is any difference between conduct which is "misleading or deceptive" and conduct which is "likely to mislead or deceive" or which merely causes confusion. (at p440)

12. As I said in Weitmann v. Katies Ltd. (1977) 29 FLR 336 : "The most appropriate meaning for the word 'deceive' in the Oxford Dictionary is: 'To cause to believe what is false; to mislead as to a matter of fact, to lead into error, to impose upon, delude, take in'. The most appropriate definition in that dictionary for the word 'mislead' is: 'To lead astray in action or conduct; to lead into error; to cause to err'" (1977) 29 FLR, at p 343 . (at p440)

13. It is also necessary to consider the case of conduct which, whilst it might be confusing, may nevertheless not be such as is misleading or deceptive or, depending upon the meaning to be given to the words "likely to mislead or deceive", not such as would be "likely to mislead or deceive". I consider that the most appropriate meaning for the word "confuse" to be found in the Oxford Dictionary is: "To mix up in the mind, to fail to distinguish, erroneously regard as identical, mistake one for another." (at p440)

14. The meaning of the phrase "likely to deceive" has been considered by the High Court on several occasions. In Southern Cross Refrigerating Co. v. Toowoomba Foundry Pty. Ltd. [1953] HCA 73; (1954) 91 CLR 592 the High Court considered the meaning of the words "likely to deceive" as they appeared in s. 114 of the Trade Marks Act 1905 (Cth.). Kitto J. after pointing out that the corresponding section of the Trade Marks Act, 1938 (Imp.) was "in the same terms with the addition of the words 'or cause confusion' after 'likely to deceive'" (1954) 91 CLR, at p 594 , said that these words made the section more specific, but they added nothing to its effect. His Honour then dealt with the requirements of s. 114 and after saying that a mere possibility of confusion was not enough said: ". . . it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products came from the same source. It is enough if the ordinary person entertains a reasonable doubt" (1954) 91 CLR, at p 595 . His Honour then (1954) 91 CLR, at p 956 cited with approval the following passage from Re Hack's Application (1940) 58 RPC 91 : "The question whether a particular mark is calculated to deceive or cause confusion is not the same as the question whether the use of the mark will lead to passing-off. The mark must be held to offend against the provisions of s. 11 if it is likely to cause confusion or deception in the minds of persons to whom the mark is addressed, even if actual purchasers will not ultimately be deceived" (1940) 58 RPC, at pp 103-104 . (at p441)

15. On appeal in Southern Cross Refrigerating Co. v. Toowoomba Foundry Pty. Ltd. [1953] HCA 73; (1954) 91 CLR 592 , in a joint judgment, Dixon C.J., McTiernan, Webb, Fullagar and Taylor JJ. said: "It is, of course, for the person applying for registration to establish that there is no likelihood of confusion and we agree with Kitto J. that registration should be refused if it appears that there is a real risk that 'the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products came from the same source'; it is, of course, not necessary that it should appear that the user of the mark will lead to passing-off: see per Morton J. (as he then was) in Re Hack's Application (1940) 58 RPC, at p 103 " (1954) 91 CLR, at p 608 . (at p441)

16. The question of deception and confusion was considered by the House of Lords in Parker-Knoll Ltd. v. Knoll International Ltd. (1962) RPC 265 . One finds Lord Denning saying that "to deceive" is different from "to cause confusion". His Lordship said in relation to passing off that: "It is significant that in these name cases, the test of passing-off is not confined to 'likely to deceive' but extends also to 'likely to cause confusion'" (1962) RPC, at p 276 . Lord Morris of Borth-y-Gest used the expression ". . . will be misled into believing that his goods are the goods of the plaintiff" (1962) RPC, at p 279 . Lord Hodson also used the words "likely to mislead purchasers" (1962) RPC, at p 283 . Lord Guest said: "The question for the Court was whether upon the evidence there was proof of probable confusion leading to deception of a substantial number of persons acting with reasonable care and observation" (1962) RPC, at p 207 . Lord Devlin referred to a representation which "is likely to deceive and not merely to confuse" and said: "What the judge has to decide in a passing-off case is whether the public at large is likely to be deceived" (1962) RPC, at pp 289, 291 . (at p442)

17. Windeyer J. in Re Bali Brassiere Co. Inc.; Re Application by Berlei Ltd. [1968] HCA 72; (1968) 118 CLR 128 said: "There are, however, a few observations I would make about item (a) in s. 23. It refers to an objective quality of the mark, 'likely to deceive or cause confusion'. A mark is 'likely to deceive' - or in the words of s. 62 is 'deceptively similar', which by s. 6(3) means the same thing - because of its inherent tendency in use, independently of the purpose or intent of the user. That is to say a mark can be deceptive without being used deceitfully. The word 'deceive', I take it, here has one of the meanings in the Oxford Dictionary, 'to cause to believe what is false, to lead into error'. This accords with Dr. Johnson's statement of its primary sense, which was given as 'to cause to mistake, to bring into error'. Lord Diplock, then Diplock L.J., said in the recent Berlei v. Bali case (1968) RPC 426 in the Court of Appeal that: 'Unlike "to deceive", "to cause confusion" does not necessarily connote any intentional misrepresentation on the part of the user.' With great respect for his Lordship's opinion, I doubt whether, in their context in relation to deceptive trade marks, the words 'to deceive' necessarily predicate intentional misrepresentation. However, it is unnecessary to pursue this question, because the words 'or to cause confusion' appear in s. 28 and in s. 6(3). They apparently denote an alternative, differing from 'to deceive'. Under the earlier Act confusion was not expressly mentioned. It was then considered that a probability of confusion would establish that a mark was likely to deceive. The question of deceptiveness could, it was then said, be judged by asking whether 'there will be a confusion in the mind of the public which will lead to confusion in the goods' per Lord Parker (then Parker J.) in Re Pianotist Co.'s Application (1906) 23 RPC 774, at p 777 , a passage quoted in this Court in Cooper Engineering Co. Pty. Ltd. v. Sigmund Pumps Ltd. [1952] HCA 15; (1952) 86 CLR 536, at p 538 " (1968) 118 CLR, at pp 139-140 . I do not consider that this passage was disapproved in the appeal in that case. (at p443)

18. The Privy Council in White Hudson & Co. Ltd. v. Asian Organisation Ltd. (1964) 1 WLR 1466 in relation to a passing off action based on get up, after saying that it was necessary to prove that the get up of the plaintiffs' goods had become distinctive of those goods and that it was identified or associated with the plaintiff said: "The second matter which in order to succeed the plaintiffs must establish is that in the circumstances there is a probability of confusion between the goods of the plaintiffs and of the defendants" (1964) 1 WLR, at p 1469 . (at p443)

19. It is necessary to bear in mind the warning of Stephen J. in Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. (1978) 140 CLR, at p 227 that the law developed around passing off may not always provide a safe ground for construing s. 52(1) of the Act. (at p443)

20. The conclusion I draw from the industrial property law is that very little significant distinction has been drawn between conduct likely to lead to deception and conduct which is confusing. Looking at s. 52(1) unaided by any authorities I lean towards the view that for conduct to be misleading or deceptive it must be conduct which is not only confusing but which in fact may be expected to lead the appropriate class of person coming into contact with it to be misled or deceived. The question of whether conduct falls within s. 52(1) is to be determined by its likely effect on the type of person who is likely to be exposed to it. Broadly speaking it is fair to say that the relevant persons are those not particularly intelligent or well informed, but perhaps of somewhat less than average intelligence and background knowledge, although the test is not the effect on a person who is quite unusually stupid. However, the addition of the words "or is likely to mislead or deceive", which were added in 1977 to s. 52(1), in my opinion leads to the result that conduct which is confusing to the relevant persons may properly be said to be likely to mislead or deceive those persons. Whilst this may need some further qualification depending upon the particular facts under consideration and upon the nature of the confusion established by the evidence in any particular case, I consider it provides the appropriate basis for examining the relevant conduct said to contravene s. 52(1) in this case. (at p443)

21. It is now necessary to consider the evidence in some detail. The applicant called Professor Layton, Professor of Marketing at the University of New South Wales, who gave evidence about the way in which he had designed the selection of 200 people to provide a statistical group from the Sydney urban area from whom relevant opinions could be sought. His evidence was that these 200 people produced an appropriate statistical sample and that if it could be established that any determined number of them other than, perhaps, less than five, held a particular opinion which he called "X" then one could calculate with reasonable precision the number of people in the Sydney urban area who would hold this opinion. He said that this involved properly qualified interviewers seeking to obtain the relevant opinions. The persons conducting the interviews were three solicitors from the solicitors for the applicant and they visited a number of persons selected for interview and asked a series of pre-determined questions from those who were prepared to co-operate. Ultimately affidavits were obtained and read from some fifty-three persons within this survey. Senior counsel for the respondent cross-examined thirty-one of these witnesses and then indicated that he did not wish to cross-examine any others and in my opinion it is reasonable to assume that the witnesses not cross-examined would have expressed views in general of the same nature as those who were cross-examined. An agreement, the meaning of which gave rise to some dispute, was made between counsel concerning conclusions to be drawn from the affidavits of the witnesses who had not been cross-examined. Some of the questions which the interviewers asked were of a nature which suggested that there might be a connexion between the applicant and the respondent or that the applicant might have sponsored the respondent or its wine advertised under the name of "McWilliam's Big Mac" or that use of "McWilliam's Big Mac" might have been approved by the applicant. In general I consider that no valid criticism can be made of the way the affidavits were obtained and I consider that any relevant opinion held by the persons who swore affidavits can be ascertained with sufficient accuracy from the affidavits and what was said by those who were cross-examined. Professor Layton's evidence was that if only some of the 200 persons were interviewed, or were prepared to co-operate in swearing an affidavit, the views of those from whose affidavits or oral evidence any relevant views could be extracted, would establish that at least a minimum number of persons in the 200 held the relevant view. Once this was established it could be ascertained statistically from this figure, with a reasonable degree of certainty, that not less than a particular number of people held the relevant view in the Sydney urban area. This procedure avoided the disadvantages of an earlier procedure which the applicant sought to adopt. This earlier procedure involved choosing a similar sample but it also involved seeking to ascertain the relevant opinions by an analysis of the answers made by those interviewed to a number of written questions. This earlier proposal involved the court being asked to rely on the interpretation by other than the judge of what a number of witnesses had said to interviewers. I have appended at the end of this judgment a ruling which I gave when I rejected evidence sought to be tendered under this proposal. The result of the cross-examination of witnesses in this case illustrates how dangerous it would be to rely on a survey based on answers given to questions asking about, for example, sponsorship without proper cross-examination at least of some witnesses in the survey. (at p445)

22. In addition the plaintiff called seven witnesses who were selected at random during one lunch hour in Martin Place. The respondent called twenty-five witnesses and I think it is fair to say that, although some of them had been asked some questions over the telephone, in general they were quite uninstructed about the issues before they gave evidence except that they knew there was some dispute between the applicant and the respondent. The first contact they had in many cases with the issues involved was to be asked in the witness box their views on the relevant advertisement. It is interesting to note that the evidence of all the members of the public giving oral evidence or being cross-examined, who numbered in all sixty-three, occupied less than four days. (at p445)

23. Counsel on both sides criticized the course the other side had taken with regard to questions asked of the witnesses before being called in evidence or making affidavits. This criticism did not allege any improper conduct. In general I consider that the parties, whilst taking a somewhat different approach to the problems, succeeded in presenting to the court witnesses who were not unduly conditioned. In saying this I think, however, that some of the questions which the interviewers asked witnesses, from the statistical group of the applicant who swore affidavits caused those witnesses to think about whether or not there might not be some sponsorship or approval or connexion by or between the applicant and the respondent, which they would not have considered in the ordinary course of experiencing the respondent's conduct in the market place. (at p445)

24. The witnesses called by the respondent in a great many cases did not have any concept of any connexion or sponsorship or approval until cross-examination during which their minds were stimulated to think about such matters. (at p445)

25. There is no doubt that at least in the Sydney urban area the community in recent years has been saturated with advertising which associated the words "Big Mac" with hamburgers sold by the applicant in its outlets. There is also no doubt that the respondent was extremely well known as a manufacturer and vendor of wines. It was also established by the evidence that no relevant number of people thought that the applicant's hamburgers sold under the name of "Big Mac" could be purchased other than at one of the applicant's outlets and also that liquor was not sold in such outlets and that wines could only be purchased from licensed outlets. (at p446)

26. There is no doubt that the use of the words "McWilliam's Big Mac" might be expected to cause a considerable amount of confusion to a sufficiently relevant number of potential purchasers of either or both the applicant's hamburgers and the respondent's wines. (at p446)

27. Senior counsel for the applicant argued that it was sufficient if the conduct complained of was such as was liable to mislead or deceive the relevant persons in relation to whether or not there was any commercial connexion between the applicant and the respondent and this included a connexion of almost any type including, for example, the applicant and the respondent joining together to promote the applicant's wines, that the applicant had approved the use by the respondent of the name "Big Mac" for the promotion of its wines or that the applicant and the respondent had joined in a joint venture to promote the wines. He did not seek to make any case that the use of the words "Big Mac" was likely to deceive or mislead persons into thinking that wines sold under that name by McWilliam's were a product of McDonald's. (at p446)

28. Senior counsel for the respondent argued that s. 52(1) of the Act must be read as referring to conduct which was misleading or deceptive or likely to mislead or deceive in some relevant way and he argued that it was not enough that persons should be misled to the extent of thinking, for example, that the respondent's wine would be put on sale in the applicant's outlets or that the applicant and the respondent might be jointly paying the cost of the advertisement or that that applicant might have licensed the respondent to use the name "Big Mac". (at p446)

29. In an appropriate case it may be that some limitation upon the way the relevant person was misled or deceived or was likely to be misled or deceived is relevant in determining whether such conduct is in breach of s. 52(1) of the Act. In the case before me I am, however, satisfied that the measure of confusion which the relevant conduct will produce is such that it will lead to a sufficient number of persons being likely to be misled or deceived upon the question of whether or not there was a business connexion between the applicant and the respondent to establish a breach of s. 52(1). This is a very unusual case because of the great reputation of the words "Big Mac" in association with "McDonald's".

QUESTION 2 (at p447)

30. This section creates a criminal offence although not now punishable by imprisonment (s. 79). "Sponsorship" is defined in the Oxford Dictionary as "the state of being a sponsor; the office of a sponsor". The most relevant meanings of "sponsor" in that dictionary are, in my opinion: "One who enters into an engagement, makes a formal promise or pledge, on behalf of another: a surety." It was argued for the applicant that the advertisement of which complaint was made was a representation that McWilliam's "Rosedale" wine had the sponsorship of the applicant. A number of witnesses called by the applicant expressed the view that the advertisement would lead them to think that this wine indeed had the sponsorship of the applicant. However, when their evidence is carefully examined and, when regard is paid to the cross-examination of those who were cross-examined, it becomes clear that it would not be safe to hold merely because a witness thought there was some form of "sponsorship" that the representation under consideration by the witnesses satisfied the requirement of "sponsorship" within s. 53(c). For example, one witness, a Mr. Foskett, when asked to explain what he had in mind when he said in his affidavit that "by the use of the words 'McWilliam's Big Mac', McWilliam's or its wine had the sponsorship of McDonald's", he said: "I thought they were seeking an outlet - an enhancement of their sales through McDonald's." Another witness, a Mrs. Fermor, explained in cross-examination that when she said in her affidavit "I formed the opinion that McDonald's is sponsoring McWilliam's wines" she meant to convey: "I thought maybe they were going to have a wine department in their store." She also said that the wines sold in that department would be McWilliam's wines. Another witness, Mrs. Precious, said in her affidavit that "I thought also that McDonald's could be sponsoring McWilliam's use of the name 'Big Mac'". In evidence she said that the advertisement did not lead her to any firm conclusion about anything but that she thought the applicant and the respondent had both merged together and that "McWilliam's would pay for the advertising and so forth to sponsor someone else's product or someone would sponsor something." (at p447)

31. Whilst the witnesses I have quoted are not entirely typical of all the witnesses called by the applicant, they do indicate that it is quite meaningless to add up all those witnesses who say in their affidavits that they think from the advertisement McDonald's were sponsoring McWilliam's and to use the figure so obtained in a statistical exercise to attempt to ascertain the number of persons in the Sydney urban area likely to hold the view that the applicant has sponsored any goods of the respondent within the meaning of the word "sponsorship" in s. 53(c). Several American cases were cited on this aspect including Parkway Baking Company v. Friehofer Baking Company (1953) 255 Fed Reporter (2d) 641 . However, in this case the complaint was based upon a false statement on a label that a product was "licensed by" a certain organization. In Weitmann v. Katies Ltd. (1977) 29 FLR 336 I had occasion to consider the meaning of the word "sponsorship" in s. 53(c) and I said: "The word 'sponsorship' in connexion with trade marks or trade names seems to envisage something more along the lines of a certification mark" (1977) 29 FLR, at p 344 . I see no reason to change this view and I consider that the word "sponsorship" in s. 53(c) should be construed in a way appropriate to the construction of such a word in a section creating a criminal offence. I am not seeking to do more than say that I am not satisfied in this case that the evidence established, according to the civil onus, that the respondent had represented that its wine had the sponsorship of the applicant. (at p448)

32. The next question is whether there was a representation by the respondent that its wine had "approval" which it did not have. It was argued for the appellant that the advertisement was a representation that the respondent's Rosedale wine was approved by the applicant. The Oxford Dictionary defines "approval" as "the action of approving; sanctioning, approbation". The most appropriate meanings of "approve" in the Oxford Dictionary are in my opinion: "To confirm authoritatively; to sanction; to pronounce to be good; commend." I consider that before it could be said that it had been established that the advertisement was a representation that the respondent's wine had an approval which it did not have it would be necessary to show more than is shown by the evidence in this case. The only form of approval which might be said to be represented in the advertisement would be some form of acceptance by the applicant of the use of the name "Big Mac" in relation to the goods but this is not in my opinion sufficient to be a representation that that wine has an approval which it did not have.

QUESTION 3 (at p448)

33. The same general question arises here in relation to whether there was a representation that the respondent had a sponsorship or approval that it did not have. For similar reasons to those I have just expressed I do not think that the representation falls within these words. (at p448)

34. Section 53 (d) also uses the word "affiliation". Affiliation is defined in the Oxford Dictionary as: "Adoption; the act of taking a son. Adoption, by a society, of subordinate branches; union of branches to a supreme or central organisation." In my opinion it cannot be said that the advertisement contains a representation that the respondent has any affiliation with the applicant. Whilst a number of the witnesses gave evidence that they formed the view from the advertisement that the applicant and the respondent had "got together" the applicant's witnesses were asked by the interviewers "From this advertisement do you think that McWilliam's had got together with any other business?" I consider that the type of "affiliation" to which s. 53(d) of the Act refers is akin to "sponsorship" or "approval". "Affiliation" seems to require a positive link. I consider that it would be difficult to establish that a newspaper advertisement by a large retail trader for television sets in association with a well-known corporate name of the manufacturer of the television sets would be a representation that the manufacturer of the television sets had an "affiliation" with the retail trader within s. 53(d).

QUESTION 4 (at p449)

35. Being satisfied that there has been a breach of s. 52(1) I next have to consider whether I should grant injunctive relief, and if I should, in what form. I was pressed by senior counsel for the applicant with a submission that I should pay regard not only to the interests of consumers but to the commercial interests of the applicant and that, in substance, I should protect such goodwill as it may have, attributable to the words "Big Mac", by virtue of the extent of the reputation achieved as a result of the vast amount of money it had spent on advertising. Stephen J. in Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. said in relation to s. 52(1): "To allow this section of the Trade Practices Act to be used as an instrument for the creation of any monopoly in descriptive names would be to mock the manifest intent of the legislation" (1978) 140 CLR at p230 (1978) 140 CLR, at p 230 . Bowen C.J. in World Series Cricket Pty. Ltd. v. Parish (1977) 16 ALR 181 said in relation to words there being considered: "Any attempt to acquire a monopoly in their use should be discouraged" (1977) 16 ALR, at p 189 . In this regard it is not inappropriate to note that McDonald's Corporation of Illinois, of which the applicant is a wholly-owned subsidiary, is the registered proprietor in Australia of the mark "Big Mac" in respect of a number of goods in classes 29 and 30. It apparently has applications for registration in classes 28 and 32. Both registrations have a disclaimer in respect of the surname "Mac". Apparently there is no registration in class 33 which includes wines. I am not deterred from assisting the applicant to achieve a monopoly in the use of the words "Big Mac" in relation to wines in this case because I think it is necessary to prevent the considerable likelihood of deception or confusion about the relationship between the applicant and the respondent if the respondent is allowed to market wine under the title "McWilliam's Big Mac". (at p450)

36. It is appropriate to mention that the words "Big Mac" are not descriptive words where taken together. (at p450)

37. I have not overlooked the fact that the reputation in the words "Big Mac" is attached to a product, but I am also satisfied that an extremely significant section of the community regard the words "Big Mac" not only as identifying a type of hamburger, but as identifying a product of the applicant. I was pressed with a number of American cases based on the American doctrine of unfair competition. It is appropriate to say on this aspect that I consider considerable care must be taken in drawing conclusions from American cases particularly if they concern, not the interpretation of a statute, but some general principle of law. The American concept of unfair competition, which is broadly equivalent to the concept of passing off in Australian law, is very flexible. See generally Callmann, The Law of Unfair Competition Trade Marks and Monopolies (3rd ed.), vol. 1, pp. 43-44, 108. (at p450)

38. Senior counsel for the applicant argued that, in deciding whether I would grant an injunction, I should bear in mind the interests of the applicant and that I should have regard to whether or not an injunction would be granted in a passing off case or in America under the law of unfair competition. It seems clear that the remedy in respect of passing off is based on a prohibition of conduct which is calculated to injure the business or goodwill of the plaintiff. See Erven Warnink Besloten Vennootschap v. Townend & Sons (Hull) Ltd. (1979) 3 WLR 68 . It is however clear that ss. 52 and 53 of the Act are designed to protect consumers. In relation to s. 52 Stephen J. in Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. said: "The remedy in such a case will not, as in passing off, be founded upon any protection of the trader's goodwill, but being directed to preventing the very deception of the public which is injuring his goodwill, it will nevertheless be an effective remedy for that of which he complains" (1978) 140 CLR, at p226 . And later his Honour said again in relation to s. 52(1): "It is not concerned, as such, with any unfairness of competition in trade as between two traders . . . . Section 52 of our Act is on the contrary exclusively concerned with consumer protection" (1978) 140 CLR, at pp 226-227 . I consider that, in deciding whether an injunction should be granted, no weight should be given to the interests of the applicant but some regard should be paid to the effect of an injunction upon the interests of a respondent. This problem has been considered by Bowen C.J. in World Series Cricket Pty. Ltd. v. Parish (1977) 16 ALR, at p 191 with regard to the question of the grant of an interlocutory injunction. Whilst the question differs in the case of a final injunction, in this case the respondent had not sought to use the words "Big Mac" in relation to wine until some time after it had commenced to sell its Rosedale wine and it has no history of the use of these words although, had it wished to do so, it presumably might have used them long ago. (at p451)

39. I was referred to the question of whether a common field of activity is relevant and in particular to Henderson v. Radio Corporation Pty. Ltd. (1960) SR (NSW) 576 . Although the applicant has no intention at the present time, or in the immediate future, of selling wines in its outlets there is a general association between wine and food. This is very different to a case where the applicant might be attempting to prevent a trader from using the words "Big Mac" in relation to say a vehicle or a pair of shoes or a piece of furniture. (at p451)

40. In my opinion the amount of confusion which would be caused in the minds of relevant members of the public by the use of the words "McWilliam's Big Mac" in relation to wine by the respondent is sufficient to warrant the granting of an injunction. The case is very different from that of a retail trader advertising television sets under a well-known brand name in circumstances where the public might think wrongly that some joint advertising campaign was being conducted, but no more. It must be borne in mind that any "person" may seek relief under s. 80 of the Act and it necessarily follows that the person who seeks relief may have no commercial interests at all which he is seeking to protect (Phelps v. Western Mining Corporation Ltd. (1978) 33 FLR 327 ). (at p451)

41. Senior counsel for the respondent argued that, if any relief were to be granted, it should be limited to the Sydney urban district because the evidence of reputation did not extend beyond that district. In my opinion, in view of the immense advertising not limited to the Sydney urban district, it would be unreal to restrict the relief to that area. On the other hand the evidence is that the applicant does not conduct business in Tasmania, Western Australia or the Northern Territory and so I propose to limit the relief to those places where it does conduct business. (at p451)

42. In general where an injunction is granted in relation to the use of a word or words which are words to which the plaintiff has no exclusive right, but which have achieved a secondary meaning to a significant section of the relevant purchasing public, the injunction prohibiting the use of the words is limited by a qualification that they are not to be used "without clearly distinguishing" (see generally World Series Cricket Pty. Ltd. v. Parish (1977) 16 ALR, at pp 196-197 ). In this case such an order would be framed so as to prohibit the use of the words "Big Mac" without clearly distinguishing the product from a product of McDonald's or words to a similar effect. However, in this case I do not consider that it would be practical to adopt this course. The likelihood of deception or of persons being likely to be misled has been shown to arise from the use of the words "McWilliam's Big Mac". (at p452)

43. The injunction I propose to grant is as follows: "Order that in the Australian Capital Territory and in the States of New South Wales, Victoria, Queensland and South Australia, McWilliam's Wines Pty. Ltd., by itself its servants and agents, be restrained in trade or commerce, in connexion with the supply or possible supply of wine or in connexion with the promotion by any means of the supply or use of wine, from using or publishing or causing, procuring or authorizing use or publication of the words 'Big Mac'." However I am prepared to entertain submissions on the precise wording of the injunction. (at p452)

44. I pass now to deal with costs. (at p452)

45. After I declined to admit evidence of the first survey, a further application was made on 23rd November, 1979, to admit in evidence the answers to be obtained in a further survey to certain questions in certain questionnaire forms. I refused this application. (at p452)

46. I order that the applicant pay the respondent's costs of this application made on 23rd November, 1979. (at p452)

47. I order that the respondent pay the applicant's costs of the action including the costs of the proceedings for interlocutory relief.

APPENDIX

RULING ON ADMISSIBILITY OF MARKET SURVEY (at p452)

48. The first question which arises concerns the admissibility under the ordinary rules of evidence of pp. 8-15 of what is called a market survey. It is appropriate to decide this question now and to deliver my reasons without delaying to deal in detail with all the authorities and the other material to which I have been referred in the last two and a half days. I am prepared to assume that there is or will be evidence from which I might conclude that: (1) The people whose opinions have been sought constitute a properly representative selection from what may broadly be called the metropolitan districts of Sydney and Melbourne. (2) The survey was conducted as set out on pp. 218-219 of the transcript: (the relevant details of which are set out in the following numbered paragraphs). (3) The precise answers to the questions in Ex. A or Ex. B, given by each interviewee, were not recorded by the particular interviewer but the interviewer interpreted the answers and ticked what he regarded as the relevant square on copies of Ex. A or Ex. B. (4) The questionnaires purporting to record the result of the interviews as interpreted by the relevant interviewers are available for inspection by the respondent. (5) There were about twenty-seven interviewers involved. (at p453)

49. The pages of the market survey which I am considering appear to record a computer analysis of the interviewers' interpretation of the various interviews. The question I have to decide is not simply whether a market survey should be admitted in all circumstances but whether the particular material now being tendered should be admitted. (at p453)

50. Although I do not have to decide the admissibility of "trap orders" at present, I consider that, subject to certain qualifications, evidence concerning trap orders has been traditionally allowed in passing off actions where one of the matters at issue is of a very similar nature to one of the issues involved here. (at p453)

51. Although the question of the admissibility under consideration does not involve me in deciding the point, it would seem there is a lot to be said for admitting evidence from, for example, a salesman, of what customers say when they ask for goods sold under a particular trade mark. I would refer generally to A. Baily and Co. Ltd. v. Clark, Son and Morland Ltd. (1938) AC 557 and Re Morny Ltd.'s Trade Mark (1951) 68 RPC 131 . However, the explanation of this may be that these are really examples of the res gestae exception where the statement is contemporaneous with the sale or offer to purchase the goods. (at p453)

52. Mr. Rogers . . . says firstly: "The first one is that in so far as the evidence is designed to show the opinion of respondents to questions, it is admissible because it is not hearsay." Alternatively he submitted that in any event the evidence should be admitted as constituting an exception to the rules against hearsay. There was a further extension of the second ground where Mr. Rogers invited me, if necessary, to create a further exception to the hearsay rule in favour of the admission of evidence where it was substantially impractical to obtain the relevant information in any other way. (at p453)

53. Mr. Staff outlined his objections. They were: (1) The material proffered was simply an analysis of a series of pieces of hearsay evidence. (2) In respect of questions 3 and 4 of Ex. B the analysis was not being made directly from the recorded answers of the interviewees but was simply an analysis of the various interviewers' interpretations of what was said to them. These objections are both based on admissibility apart from any question of relevance. (3) Question 4 of Ex. B was in a leading form and was also objectionable because it asked the question: "Do you tend to agree or disagree?" The third ground is really based on an objection as to relevance. (at p454)

54. I have been referred to a number of American cases and several American and Canadian articles and to a judgment of Mahon J. in New Zealand in the case of Customglass Boats Ltd. v. Salthouse Brothers Ltd. (1976) RPC 589 . This judgment was followed by Parker J. in New Zealand in Penfolds Wines (N.Z.) Ltd. v. Pacific Vineyards Ltd. Unreported (New Zealand Supreme Court, Parker J., 3rd August, 1979). . In so far as the views I express differ from those of Mahon J., I, with respect, prefer the views I express. I have also had the benefit of submissions with regard to General Electric Co. (of U.S.A.) v. General Electric Co. Ltd. (the G.E. Trade Mark case) which was before the House of Lords (1972) 1 WLR 729 , the Court of Appeal (1970) RPC 339 and the trial judge (1969) RPC 418 . In that case it seems a number of affidavits were admitted in evidence together with the evidence of a lady who conducted a market survey and the evidence of a statistician. There were seventy-three affidavits on behalf of the applicant sworn by members of the public. It appears that no objection was taken to the survey evidence except on the ground of relevance (1969) RPC, at pp 421-422 . I find nothing in this case which would entitle me to admit the documents tendered and objected to. (at p454)

55. The question of admissibility of unsworn statements was considered by the Court of Appeal in the case that I have previously mentioned of A. Baily and Co. Ltd. v. Clark, Son and Morland per Lord Justice Greene (1937) 54 RPC 134, at p 150 . I wish to incorporate them in what I am saying, but I will not burden everybody by reading them at this stage. (at p454)

56. Lord Wright, the Master of the Rolls, and Romer L.J. agreed with the views generally of Greene L.J. When this case got to the House of Lords, Lord Russell of Killowen dealt with the matter of evidence (1938) AC, at p 573 . I read this case as indicating that it is not permissible to put before the court answers, for example those obtained in a market survey, not proved by affidavit or by oral evidence, although it may be desirable that those answers be open for inspection by the other side's legal advisers. To use the words of Lord Russell of Killowen: "The Court will then be protected from the embarrassment of being in possession of documents which are in no sense evidence of the facts stated therein" (1938) AC, at p 574 . (at p455)

57. Looking at the documents tendered before me I think they are an analysis of pieces of hearsay evidence and that there is no existing exception to the rule against hearsay under which they could be admitted. In addition I do not think I have the power, nor that I ought, to attempt to extend the exceptions to the hearsay rule in this case. (at p455)

58. Matters of the type now sought to be proved have been proved in the past for many years, although sometimes with considerable difficulty. (at p455)

59. It is necessary to say something further about Mr. Rogers' first submission that the evidence in the relevant pages is admissible because it is not hearsay. This involves a consideration first of whether statements of contemporaneous opinion made by persons not called as witnesses or not made in affidavits of those persons can be admitted on the basis that they are not hearsay. No extensive examination of the United Kingdom or Australian cases of this question was made before me. Mr. Rogers referred to certain passages in Cross, and in reply he referred me to Phipson on Evidence (12th ed.) and expressly to par. 215 where it is stated, inter alia, that whenever the opinion of a person is material to be proved his statements indicative thereof made at or about the time in question may be given in evidence. (at p455)

60. I have some considerable doubt whether this statement of the law, if it be a correct statement of the law, is applicable to the case where it is sought to collect opinions from a number of persons by interviewers asking questions of those people. However, even assuming that such statements are admissible, I am not asked to admit them but in substance to admit the conclusions of interviewers about what was said by interviewees, and the precise document under consideration is one purporting to set out an analysis of the conclusions of the interviewers. (at p455)

61. I do not consider that pp. 8 to 15 of the survey come within the principle set out in par. 215 of Phipson. In any event, I would distinguish the evidence sought to be tendered from evidence which is tendered to show a particular statement was made by a person. (at p455)

62. It is here sought to use the words spoken as interpreted by the interviewer "testimonially". It is sought to prove the truth of what was said to the interviewer was in fact the true view of the interviewee. This distinguishes the matter under consideration from, for example, the case of Subramaniam v. Public Prosecutor (1956) 1 WLR 965 . (at p456)

63. I mention in passing the difficulty that courts often have had with questionnaire evidence, using generally as an illustration the case of F.I.F. Trade Mark (1979) RPC 355, at p 365 where Whitford J., a judge of great experience in this field, deals with the problem. An illustration of the traditional approach to the admission of surveys is to be found in a judgment of the Full Court of the Supreme Court of South Australia in Hoban's Glynde Pty. Ltd. v. Firle Hotel Pty. Ltd. (1973) 4 SASR 503 . (at p456)

64. I consider that Mr. Staff has made out his first two objections. It is not necessary on this aspect - that is to say, in the consideration of the first question that arises - to deal with the third ground of Mr. Staff's objections. (at p456)

65. I pass now to the next aspect of the question of admissibility. Mr. Rogers asked me to make an order under O. 64 of the present rules of the Federal Court that subject to any further order this case should henceforth proceed under the new rules for the trial and the admission of evidence. Alternatively, he asks for a limited order that O. 33, r. 3(b) should apply so as to permit pp. 8 to 15 of the survey being admitted into evidence, subject to any reasonable conditions which might be imposed by the court. These conditions, he agreed, might include the cross-examination of certain of the interviewers. (at p456)

66. Mr. Staff opposed any such order. One reason was because the original answer to the questions asked would not be in evidence but only the interviewers' interpretations. Mr. Staff argued that the survey would be of so little use as to be valueless, and its admission would be likely to protract the trial and increase the expense of it. (at p456)

67. Mr. Rogers asked me to bear in mind the legislation under which this action is brought is for the protection of the public. Mr. Staff submitted that O. 64 proceeds upon the basis that there should be some good reason for making an order under it and that it is not a valid reason that an order would give one party an advantage over the other party which it did not previously have. Mr. Rogers answered this by referring to Warr v. Santos (1973) 1 NSWLR 432, at pp 435, 442 . (at p456)

68. Mr. Staff argued that the parties had prepared their cases under the old rules and it would be unreasonable to change to new rules at this late stage of the proceedings. Mr. Rogers said that he would not oppose an adjournment whilst a survey of a similar kind was made by the respondent. (at p456)

69. Whether or not O. 33, r. 3(b) is appropriate to deal with a case like this, I am by no means satisfied that to admit pp. 8 to 15 of the survey would be likely to reduce the expense of the proceedings or the delay. Mr. Staff indicated he wanted to cross-examine at least some of the interviewers. (at p457)

70. Matters I have in mind in refusing this application include: 1. The application is opposed. 2. The late stage at which the application is made. 3. The possible need for a long adjournment to enable the respondent, if it wishes, to take advantage of the opportunity to use a survey made in a similar way, and in this regard I have in mind the fact that an interlocutory injunction exists. 4. The fact that the results of the whole survey are critically affected by the interpretations placed on the answers to the questions by the twenty-seven interviewers, and no record of precise answers of those interviewed is available. 5. The form of some of the questions, for example question 2 of Ex. A and question 4 of Ex. B. Question 4 suggests one of a variety of answers and uses the words "tend to". I doubt whether a question of this sort, together with the supply of a series of answers, is entirely appropriate in the circumstances of this case. 6. It may well be that because senior counsel for the respondent says he desires to cross-examine a number of the interviewers, of whom there were twenty-seven, the granting of the application may well not have the result of reducing any expense or avoiding delay. 7. Although the analyses set out at pp. 8 to 15 have not been explained to me in detail at this stage, broadly speaking and upon the information at present before me, I do not feel on the balance of probabilities that the information sought to be conveyed in the form in which it is at present would be likely to reduce the expense of these proceedings or avoid any delay. (at p457)

71. In all the circumstances I am satisfied that at present I should refuse to make any order under O. 64. This means that I reject pp. 8 to 15 as tendered. (at p457)

72. This ruling is not intended to be taken as one necessarily applicable to all types of what might broadly be called market surveys, and it may very well be that in an appropriate case in the future some form of market survey could be worked out at a directions hearing, or shortly thereafter, which would permit some improvement on the traditional way cases are conducted in Australia where the type of fact now sought to be proved is involved. (at p457)

ORDER

Orders accordingly.