Re Tec & Tomas (Australia) Pty Limited v Matsumiya Computer Company Pty Limited; Transnational Data Corporation Pty Limited; Tokyo Data Systems Pty Limited; Celebrity Communications Pty Limited and Anthony Francis Foot [1984] FCA 14 (10 February 1984)

FEDERAL COURT OF AUSTRALIA

Re: TEC & TOMAS (AUSTRALIA) PTY. LIMITED
And: MATSUMIYA COMPUTER COMPANY PTY. LIMITED; TRANSNATIONAL DATA CORPORATION
PTY. LIMITED; TOKYO DATA SYSTEMS PTY. LIMITED; CELEBRITY COMMUNICATIONS PTY.
LIMITED and ANTHONY FRANCIS FOOT No. G379 of 1983
(1984) ATPR (para 40-438) / 1 FCR 28 / 53 ALR 167 / 2 IPR 81
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)

CATCHWORDS

Trade Practices - Misleading or deceptive conduct - Use of registered business name - Conduct anterior to point of sale - Discretionary defence of applicant's misconduct.

Trade Practices Act, 1974 ss. 52, 80

Trade Practices - Misleading and deceptive conduct - Respondents' registration as a business name and use of applicant's brand names - Whether registration of business names constitutes a defence - Representations contained in press release - Conduct anterior to point of sale - Whether a representation which induces a negotiation or dealing is proscribed conduct - Considerations relevant in the exercise of the discretion to grant an injunction - Discretionary defence of applicant's misconduct - Trade Practices Act 1974 (Cth), ss 52, 53(d), 80 - Business Names Act 1962 (N.S.W.). The applicant distributed and sold in Australia computers and associated equipment manufactured in Japan and marketed under the trade names "Seiko" and "Seikosha". In February 1982 the applicant appointed the first respondent as the distributor of its products in Australia. However, in June 1983 the applicant terminated the distributorship. At that time the first and second respondents applied for registration of the business names "Seiko Computers" and "Seikosha". In October 1983 the fourth respondent issued a press release which, inter alia, represented by the use of the names "Seiko" and "Seikosha" a connection between the goods manufactured by the applicant and the business of the first and second respondents. The applicant alleged, inter alia, a contravention of the Trade Practices Act 1974 (Cth) s. 52, and sought an injunction restraining the respondents from engaging in such conduct.

Held: (1) The conduct with which s. 52 is concerned is not unfairness of competition as between two traders, but is that which may mislead or deceive or be likely to mislead or deceive members of the public in their capacity as consumers, being "reasonable" members of that class.

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

Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd [1982] HCA 44; (1982) 56 ALJR 715.

Jafferjee v. Scarlett [1937] HCA 36; (1937) 57 CLR 115, applied.

(2) The registration of the business names by the respondents under the Business Names Act 1962 (N.S.W.) can be no defence to proceedings under s. 52.

B. M. Auto Sales Pty Ltd v. Budget Rent a Car System Pty Ltd (1976) 51 ALJR 254.

Turner v. General Motors (Australia) Pty Ltd [1929] HCA 22; (1929) 42 CLR 352.

Westinghouse Electric Corporation v. Thermopart Pty Ltd (1968) WAR 39, referred to.

(3) Although a consumer may be likely to make specific inquiries as to the source of the product he was purchasing before completing a transaction, the anterior conduct may still contravene s. 52. Accordingly, to induce negotiation or the introduction of a dealing to a potential consumer is conduct which contravenes s. 52 of the Trade Practices Act 1974 (Cth) even if ultimately the consumer becomes aware that the equipment he is purchasing from the corporate respondents is not that of the applicant.

Taco Company of Australia Inc. v. Taco Bell Pty Ltd (1982) 42 ALR 117, referred to.

Parkdale Custom Built Furniture Pty Ltd. v. Puxu Pty Ltd [1982] HCA 44; (1982) 42 ALR 1, distinguished.

Observations concerning the applicability of discretionary defences to inflective orders under the Trade Practices Act 1974.

HEARING

Sydney, 1983, December 22; January 12, 13; 1894, February 3, 10. 10:2:1984
APPLICATION.

The facts appear in the judgment.

J. M. Ireland, for the applicant.

J. Bovill, for the first, second, third and fourth respondents.

The fifth respondent appeared in person.
Cur. adv. vult.

Solicitors for the applicant: Abbott, Tout, Creer & Wilkinson.
J. J. ISLES.

ORDER

1. Order that the first and second respondents, and each of them, by themselves, their servants and agents, be restrained from engaging in conduct that is misleading or deceptive or likely to be so by using the name "Seiko Computers" or the name "Seikosha" in the course of any business which offers for sale computers or computer equipment not those of the applicant or of Hattori Seiko Company Limited.

2. Order that the first, second, fourth and fifth respondents, and each of them, by themselves, their servants and agents, be restrained from engaging in conduct that is misleading or deceptive or likely to be so by making any statement that or to the effect that:

(a) the first or the second respondent has any

business or trade connection with the group of companies known as the Hattori Seiko group;

(b) Model "8640" or model "8680" computers offered

for sale by the first and second respondents are products of the applicant or of Hattori Seiko Company Limited;

(c) Model "8600" computer of Hattori Seiko Company

Limited has been replaced by or superseded by model "8640" or model "8680" computers offered for sale by the first and second respondents.

3. Reserve liberty to the applicant to apply, on three days' notice, for such relief against the third respondent as it may be advised.

4. Order that the respondents other than the third respondent pay the costs of the applicant.

Orders accordingly.

DECISION

In these proceedings, the applicant seeks injunctions to restrain alleged contraventions of ss.52 and 53(d) of the Trade Practices Act, 1974 on the part of the four corporate respondents, which are related corporations. The fifth respondent, a director of the other respondents, is sought to be joined as a party involved in the alleged contraventions. As ultimately framed, the relief sought is in these terms:

"1. ORDER that the first and second
respondents and each of them be
permanently restrained from using the
name 'SEIKO COMPUTERS' or the name
'SEIKOSHA' in the course of any business
offering for sale computers or computer
equipment which are not made by or with
the authority of Hattori Seiko Company
Limited.

2. ORDER that the first, second, third
and fourth respondents and each of them
be permanently restrained from making
any statement to the effect that either
the first or second respondents or
either of them has a business connection
with the Japanese group controlled by
Hattori Seiko Company Limited.

3. ORDER that the first, second, third
and fourth respondents and each of them
be permanently restrained from making
any statement to the effect that:

(a) Model 8640 and Model 8680
computers sold or offered for
sale by the respondents or any of
them are of the same manufacture
or trade origin as the Model 8600
computers sold by the applicant;

(b) the Model 8600 computer sold by
the applicant has been replaced
or superseded by the Models 8640
and 8680 computers sold or
offered for sale by the
respondents or any of them.

4. ORDER that the fifth respondent be
permanently restrained from aiding,
abetting, counselling or procuring a
breach by any of the respondents of the
orders contained in paragraphs l, 2 and
3 above."

2. There is little, if any, dispute about the facts of the case. But, before describing the particular circumstances said to give rise to the contraventions now charged, reference should be made to some background matters. Since 1980, the applicant has distributed and sold in Australia computers and computer equipment manufactured in Japan and marketed under the trade name "SEIKO". The applicant obtains its supply of "SEIKO" computers and computer equipment from Tokyo Boeki Limited (a Japanese corporation which holds 80% of the share capital of the applicant) and markets them in Australia. The manufacture and distribution of "SEIKO" products is managed in this way:

(a) a Japanese corporation, Hattori Seiko Company Limited, holds a controlling interest in three operating companies also incorporated in Japan and known as Seikosha Limited, No. 2 Seikosha Limited and Suwaseikosha Limited;

(b) the three operating companies manufacture in Japan a range of products which are marketed under the trade name "SEIKO";

(c) such "SEIKO" products are purchased for overseas markets, including Australia, by Tokyo Boeki Limited (another member of the Hattori Seiko group);

(d) in respect of the Australian market, Tokyo Boeki Limited supplies the applicant as its exclusive Australian distributor of "SEIKO" computers and computer equipment.

3. In Japanese, the word "SEIKO" means "precision". The suffix "sha" means "company". The word "seikosha" means literally "precision company". For more than a hundred years, clocks have been manufactured and sold in Japan under the name "SEIKO". Gradually, over that period, the range of products manufactured and sold under that name has increased and diversified. For a number of years, the group of corporations controlled by Hattori Seiko Company Limited has manufactured clocks, watches, calculators and, more recently, computers and computer equipment: computers and computer equipment have been manufactured by the group since approximately 1968. Watches and clocks manufactured in Japan by the group controlled by Hattori Seiko Company Limited have been widely sold in Australia for a number of years. Hattori Seiko Company Limited has been the registered proprietor of the trade mark "SEIKO" in this country since 1969 in respect of all goods in class 9 including desktop computers and electric calculating machines.

4. In August or September, 1982, the applicant commenced negotiations with the fifth respondent concerning the appointment of the first respondent (then known as Transnational Data Systems Pty. Limited) as "Master Distributor" of the applicant's products for Australia and New Zealand. In February 1983, the applicant wrote to the first respondent referring to the preparation of formal documentation in that behalf and, in the interim, confirmed the appointment of the first respondent as "Master Distributor" of "SEIKO" computers in Australia and New Zealand.

5. However, by May 1983, the relationship between the parties had begun to deteriorate for, in that month, the applicant wrote to the first respondent on two occasions seeking payment of moneys it claimed were owing to it. On 2 June, 1983, the applicant wrote to the first respondent raising again its claim for moneys said to be owing and proposing a number of alternative arrangements in that behalf, but also foreshadowing the possibility of termination of the distributorship and the recovery of all products consigned by the applicant to the first respondent if no satisfactory arrangement could be arrived at. No such arrangement did eventuate and, on 7 June, 1983, the applicant wrote to the first respondent and, as foreshadowed, terminated the distributorship and demanded the return of all consigned computer equipment except the equipment already paid for.

6. At about the time this correspondence was taking place, the second respondent, without the knowledge of the applicant, applied for and subsequently obtained, registration under the Business Names Act, 1962 (N.S.W.) of the business names "Seikosha" and "Seiko Computers". In each case, the application was made by Mr. J.O. Bovill as a director of the second respondent and on its behalf. In the case of "Seikosha", the application was dated 2 June, 1983, the principal business address was shown as 84-86 Pacific Highway, St. Leonards and the nature of the business was described as "computer systems and allied peripheral equipment". In the case of "Seiko Computers", the same address was shown, but the nature of the business was described as "computer marketing". In fact, all four of the corporate respondents carry on business from the address stated. As has been mentioned, they are related corporations: in addition to some common shareholdings, the fifth respondent and Mr. J.O. Bovill are directors of each corporate respondent.

7. On 6 August, 1983, the second respondent, in a letter signed by the fifth respondent, wrote to the applicant as follows:

"Notice of Registered Name

You are hereby given notice that the
name 'Seiko Computers' is a registered
name and as such may only be used with
formal approval given by the registered
owner thereof.

Accordingly you are warned not to use
the name 'Seiko Computers' in any
marketing, advertising or promotional
material, on any product, component part
or packaging thereof by your staff,
branches, dealers, advertising agents or
customs agents.

You are further warned that any breach
of use of the name 'Seiko Computers'
after 6th August, 1983 will result in
immediate legal action to protect the
rights of the registered owner against
any person or organisation infringing on
these rights and may well result in a
subsequent claim for substantial
damages."

8. A similar letter was written in respect of the name "Seikosha".

9. On 21 October, 1983, the fourth respondent issued a press release under its name. The release, said to be from Katrina Lee Potter, who is a director of that respondent, along with the fifth respondent and Mr. Bovill, was in these terms:

"Seiko Computers is pleased to announce
the release of two new models to replace
the current model.

The first of these is the Model 8640
which is an upgraded l6 bit system with
greater memory capacity, more disk
storage, optional magnetic tape
cartridge and can run more users
concurrently.

This system is software compatible with
the previous model and also offers the
Unix III operating system as well as
Oasis-l6.

The Model 8680 from Seiko Computers is
the new 32 bit system and features up to
l60 MB of disk storage and can run up to
l6 users concurrently.

The Model 8680 offers the Unix System
III operating system and application
software from the l6 bit models is
upwards compatible.

A wide range of communication protocols
are supported including SNA/SDLC and
x.25.

Customer deliveries of both of these new
models are scheduled to commence on lst
December.

For further information contact:

Seiko Computers
P.O. Box 76
ST. LEONARDS NSW 2065

TEL: [phone]" (emphasis added)

10. On the following two pages, detailed specifications of "Model 8640" and "Model 8680" respectively were set out. The last page of the release contained this note:

"NOTE FOR PRESS

Seiko Computers has requested that when
members of the press are referring to
products supplied by Seiko Computers
that they use the full name Seiko
Computers and not just the name Seiko.

Your co-operation in this regard will be
greatly appreciated."

11. It is common ground that "Model 8640" and "Model 8680" referred to in the press release are not computer equipment marketed by the applicant or by any other member of the Hattori Seiko group of companies.

12. On 21 October, 1983, the same day as the press release, the first respondent changed its name from Transnational Data Systems Pty. Limited to Matsumiya Computer Company Pty. Limited. Mr. Y. Matsumiya is the president of Tokyo Boeki Limited. The change of name took place without the consent of Mr. Matsumiya. Mr. Bovill gave evidence that he and the fifth respondent "wanted a good Japanese name ... and (Matsumiya) is the one that came to mind".

13. On 26 October, 1983, the applicant obtained judgment in the Supreme Court of New South Wales against the first respondent in the sum of $28,877.00 for goods sold and delivered. On 16 November, 1983, the first respondent filed in the Supreme Court a cross-claim against the applicant, alleging a number of breaches of warranties and conditions in respect of the computer equipment supplied by the applicant. The cross-claim has not yet been heard.

14. After receipt of the press release, an article appeared in "The Australian" newspaper on 22 November, 1983 as follows:

"SEIKO Computers has released two new
microcomputer systems which replace its
present model.

The 8640 is an upgraded l6-bit system
with greater memory capacity, more disc
storage, optional magnetic tape
cartridge and can run more users
concurrently.

The Model 8680 is a 32-bit system which
features up to l60 megabytes of disc
storage and can run up to l6 users
concurrently."

15. On l5 November, 1983, the fifth respondent, as a director of the fourth respondent, wrote to the editor of the Australian Financial Review as follows:

"It has been brought to the notice of our
client that an organisation has been
advertising in the Review over the last
two weeks what they claim to be Seiko
Computers.

We wish to point out that both 'Seiko
Computers' and 'Seikosha' are registered
business names owned by our client and
in order to protect the rights
thereunder our client has instructed its
solicitors to take legal action if
further infringement of these rights
continues as there has been no approval
given for use of these names other than
to our company for use in press releases
and advertising.

We assumed that you were unaware that
the above mentioned advertising
infringed on these rights and we hereby
bring this matter to your attention."

16. Later in November 1983, a discussion took place between the fifth respondent and Mr. John Costello, a journalist employed by "The Australian Financial Review". On 28 November, 1983, the following article appeared in that journal:

"Further change for confusing marketing
strategy at Seiko

by John Costello

Distribution of Seiko computers in
Australia has reverted to Tec and Tomas
following the termination of that
company's agreement with Transnational
Data Systems.

Computers from Seiko -- better known for
the estimated 1.7 million wristwatches
it has sold in Australia -- have been
sold locally since late 1981.

In November 1982 Tec and Tomas appointed
Transnational Data Systems as its master
distributor in Australia.

Further complicating the matter is the
continuing sale of computers carrying a
Seiko label by the successor of
Transnational, Matsumiya Data Systems.

Transnational Data Systems changed its
name to Matsumiya Data Systems in
October of this year.

Managing director of Matsumiya, Mr. Tony
Foot, said his company was the only
organisation which had the right to sell
computers under a Seiko label.

He said his company had registered Seiko
Computers and Seikosha as business
names.

Seikosha is also the name of the
Japanese company which manufactures
watches, clocks and computers all sold
under the Seiko label.

There is no connection between Matsumiya
and Tec and Tomas nor between Matsumiya
and Seikosha of Japan or Seiko in Japan.

Matsumiya is the family name of the
president of Tokyo Boeki, the Japanese
trading company which is the majority
owner of Tec and Tomas (Australia) Pty.
Ltd.

There is no connection between Matsumiya
Data Systems and Tokyo Boeki apart from
the fact that the Australian company
shares the same name as the president of
Tokyo Boeki.

Mr. Foot said as far as he was concerned
the name Matsumiya meant nothing more
than the new name of Transnational Data
Systems.

Earlier this month Mr. Foot notified the
Financial Review as a director of
Celebrity Communications Pty. Ltd. that
a client of that company had not given
approval for the use of the names 'Seiko
Computers' and 'Seikosha' in an
advertisement.

In the letter Mr. Foot said legal action
would be taken if any further
infringements were made.

Operating from the same address in the
Sydney suburb of St. Leonards as
Matsumiya, Celebrity Communications is
the company which was used by
Transnational earlier this year to help
it prepare information for the media.

The information related to
Transnational's major launch of the
Seiko range of computers in Australia.

Late last week the Transnational name
was still displayed at the address.

Earlier this year Tec and Tomas filed an
action against Transnational (as it was
then known) for non payment of money
relating to computer systems.

Judgment was granted in favour of Tec
and Tomas.

Transnational has since filed a counter
claim alleging the computers were of
unmerchantable quality." (emphasis
added)

17. In his evidence in chief, Mr. Costello said that it was his recollection that the fifth respondent did inform him, as his article stated, that the first respondent was the only organisation which had the right to sell computers under a "SEIKO" label. In cross-examination, the fifth respondent, who appeared in person, challenged Mr. Costello on this evidence, suggesting that, instead, the fifth respondent informed Mr. Costello only that the first respondent had the sole right to sell computer equipment using the business name "Seiko Computers" and did not inform him that the first respondent had the sole right to sell computers under a "SEIKO" label. The fifth respondent did not give evidence. Mr. Bovill, who also appeared in person (by leave - as a director of the corporate respondents), gave evidence that he heard what the fifth respondent said to Mr. Costello in a telephone conversation. He denied that the fifth respondent then informed Mr. Costello that the first respondent was the only organisation which had the right to sell computers under the 'SEIKO" label. Whatever be the position so far as concerns that conversation, Mr. Costello said that he spoke to the fifth respondent on more than one occasion and Mr. Bovill did not suggest that he overheard more than one conversation with Mr. Costello. In the circumstances, I accept the evidence of Mr. Costello on the point. In fairness to all concerned, however, it should be noted that, in cross-examination, Mr. Costello, understandably enough, had real difficulty in understanding how any valid distinction could be drawn by the fifth respondent between use of a business name on the one hand and use of brand names on the other, in the present context. Mr. Costello saw them as indistinguishable for present purposes. I will return to this aspect later.

18. On 28 November, 1983, the date of publication of the article in the "Australian Financial Review", the applicant's solicitors wrote to the first respondent alleging a contravention of s.52 of the Trade Practices Act, 1974 and seeking undertakings along the lines of the relief now sought. The first respondent replied in these terms:

"The inference behind your letter of 28th
November is unclear. Are you saying
that your client wishes to purchase
certain registered business names?"

19. Finally, in his affidavit, Mr. Bovill said that the second respondent has granted a conditional licence to the first respondent for the use of the name "Seiko Computers". I also note that the respondents proffer an undertaking that they will not sell or offer or advertise for sale any products as being manufactured or assembled by the Hattori Seiko group that were not so manufactured or assembled. In an endeavour to overcome their inability to acquire "SEIKO" products, Mr. Bovill gave evidence that he has made an arrangement with an overseas supplier for the supply of "SEIKO" computer products to the respondents at cost.

20. So far as concerns the claim made under s.52, the applicant submits that the conduct of the corporate respondents must be viewed as a whole (see Parkdale Custom Built Furniture Pty. Limited v. Puxu Pty. Limited [1982] HCA 44; (1982) 42 ALR 1 per Gibbs, C.J. at p 7). The applicant relies upon the fact, conceded by Mr. Bovill, that the word "SEIKO" is a household name, at least in relation to watches; the evidence of Mr. Bovill that the experience of the respondents was that the name "SEIKO" was a "door opener" in the marketing of products; and the fact that, in the period between February 1983 and June 1983, some at least of the corporate respondents had a business association with the applicant and hence with its products.

21. The applicant argues that the conduct of the first and second respondents consisting of:

(a) the use of the names "SEIKO" and "Seikosha" in a
manner so as to suggest a connection in the course
of trade between their business and the products
manufactured by the Japanese Hattori Seiko group;

(b) false statements to the press suggesting a
continuity between the model "8600" "SEIKO"
computer and the computers marketed by those
respondents; and

(c) false statements to the press suggesting that the
"SEIKO" model "8600" computer had been replaced and
superseded --

constitutes conduct which is misleading or deceptive or likely to do so in contravention of s.52.

22. The applicant further contends that the corporate respondents have contravened s.53(d) in that either the first or second respondent is representing that it has a sponsorship approval or affiliation that it does not have. It relies in this regard upon the well established nature of the "SEIKO" name; the previous, but now determined, business association between the applicant and the first respondent; the nature of the goods and services which the corporate respondents are now offering for sale; and the "new model" announcement, which implies, the applicant says, a continuity between the model "8600" series and the goods now marketed by the corporate respondents.

23. Based on these alleged contraventions, the applicant seeks injunctions against the corporate respondents in the terms stated. Further, the applicants urge, the fifth respondent should be enjoined also by virtue of his being aware of the relevant facts (cf. Yorke v. Lucas (1983) FCR 377).

24. As has been mentioned, the respondents have appeared in person. As I understand it, they raise two principal defences: they rely upon the undertaking proferred and say that this will eliminate not only any confusion but also any likelihood of "consumers" being misled or deceived; secondly, as a discretionary defence, they claim that the applicant's conduct in certain respects is such that relief should be withheld. In particular, the respondents complain that:

"(1) The model 8600 computer assembled
by Seiko Hattori suffered from
degradation in response time when
initially released by the applicant to
the first respondent in a multi terminal
configuration.

(2) That this degradation in response
time was overcome by the supply of
software and proms.

(3) That these enhancements were not
made available to the respondents.

(4) That the supply of these
enhancements made the machines easier to
sell.

(5) That the model 8600 computer was
held out as having a communications
facility when no approval had been
obtained for it from Telecom.

(6) That Mr. Aihara (as managing
director of the applicant) knew or
should have known that

(a) operating systems as described in
(a pamphlet published by the applicant)
were not available when the computers
were sold to the first respondent.

(b) That there was degradation in
response time when used in a multi
terminal configuration which would
militate against sales."

25. I turn first to consider the applicant's claim so far as it is based upon s.52. Although the applicant clearly has standing to seek relief, s.52(l) is not concerned as such, with "any unfairness of competition in trade as between two traders" (see Hornsby Building Information Centre Pty. Limited v. Sydney Building Information Centre Limited [1978] HCA 11; (1978) 140 CLR 216 per Stephen, J. at p 226). "It is not enough that conduct damages a rival trader; it must mislead or deceive or be likely to mislead or deceive members of the public in their capacity as consumers" (Puxu, supra, per Mason, J. at p.9). For this purpose, the consumers or potential purchasers should be considered to be "reasonable persons behaving with as little or as much vigilance as is commonly displayed by those who buy goods of the description in question in the ordinary course of affairs" (Jafferjee v. Scarlett [1937] HCA 36; (1937) 57 CLR 115 per Dixon, J. at p 124; Puxu, ibid). Thus, the section must be regarded as contemplating the effect of the conduct on "reasonable" members of the class. The burdens which the section creates cannot have been intended to be imposed "for the benefit of persons who fail to take reasonable care of their own interests" (see Puxu, per Gibbs, C.J. at p.6).

26. It is clear that a statement may be literally true but at the same time be misleading and deceptive:

"To announce an opera as one in which a
named and famous prima donna will appear
and then to produce an unknown young
lady bearing by chance that name will
clearly be to mislead and deceive. The
announcement would be literally true but
none the less deceptive, and this
because it conveyed to others something
more than the literal meaning which the
words spelled out. Thus, in passing
off, a newly incorporated defendant
company may not use, in its newly
established business, its true corporate
name if it be deceptively similar to
that of a plaintiff with an established
reputation .... What has been said of
passing off actions applies equally in
the present case; as Buckley L.J.
remarked in John Brinsmead & Sons Ltd.
v. Brinsmead ..., a statement which is
literally true and accurate may
nevertheless carry with it a false
representation. Lord Morris expressed
much the same notion in Parker-Knoll
Ltd. v. Knoll International Ltd. ... The
same will apply in relation to s.52(l)."
(Hornsby per Stephen, J. at p 227.)

27. Although the respondents have registered the business names "Seiko Computers" and "Seikosha" under the New South Wales Business Names Act, such registration can be no defence to proceedings under s.52 (see B.M. Auto Sales Pty. Ltd. v. Budget Rent A Car System Pty. Ltd. (1976) 12 ALR 363 at p 369; Turner v. General Motors (Australia) Pty. Ltd. [1929] HCA 22; (1929) 42 CLR 352 at pp 364-5; Westinghouse Electric Corporation v. Thermopart Pty. Ltd. (1968) WAR 39 at pp 42-3 and 48).

28. The alleged contraventions of s.52 are distinct and may be considered separately. I shall deal first with the conduct of the corporate respondents consisting of the use of the name "Seiko Computers" and the threatened use of the name "Seikosha" in connection with the marketing by those respondents of computer equipment not that of the applicant. The use of these names in connection with the marketing of other computer equipment is, in my opinion, a representation to potential customers, contrary to the fact, that the equipment is that of the applicant or the Hattori Seiko group or at the least, that a business or trade connection subsists between the applicant or the Hattori Seiko group and the corporate respondents.

29. It may be accepted that, generally speaking, a consumer of this type of product would make specific enquiries as to the source of the product before completing a transaction but the anterior conduct may still contravene s.52 (see Taco Company of Australia Inc. v. Taco Bell Pty. Ltd. [1982] FCA 136; (1982) 42 ALR 177 at pp 197-9). In my opinion, the decision in Puxu, supra, may be distinguished in this respect. There, the relevant representation consisted of the presentation of a product which was physically similar to another product but which carried a label distinguishing it from the other product. It was held that any misleading impression conveyed by the physical similarity of the two products would be eliminated by an inspection of the label which it was reasonable to anticipate would take place. In other words, there, the marketer of the product was really making two representations: first, by implication from physical similarity, that the respective products were the same; secondly, by express representation in the form of the label, that the products were of different origin. The representations were made more or less at the same time and it was reasonable to expect that a potential customer would read the label and in that way any misleading impression flowing from the circumstance that the products looked substantially the same would be dispelled immediately.

30. In the present case, the position is different: one would assume a considerable lapse of time between the making of the false representation of a relevant connection between the parties and their products and the actual point of sale, by which time any misleading impression may well have been corrected. But, as was held in Taco Bell (supra, at p.199), there is no reason of principle why such anterior conduct cannot contravene s.52, independently of the position at the point of sale.

31. The distinction between Puxu and Taco is well illustrated by the circumstances of the present case. In my opinion, a potential customer reading the press release of the corporate respondents dated 21 October, 1983 would readily assume, contrary to the fact, that some business or trade connection then subsisted between those respondents and the Hattori Seiko group and their respective products. The fact that "SEIKO" is a household name, at least in respect of watches, confirmed by the experience of the respondents that the name "SEIKO" has been a "door opener" in marketing terms, indicates that a potential purchaser of computers may well commence to deal with the respondents in circumstances where he would not have done so if the respondents had made no mention of "SEIKO" in its trade or business name and in advertising. In my view, to induce the introduction of such a dealing is conduct which contravenes s.52, even if, ultimately, the consumer becomes aware that the equipment he is purchasing is not that of the Hattori Seiko group, the deception having occurred at an earlier stage: what is relevantly induced is the dealing or the negotiations, as distinct from the subsequent purchase itself. As Taco held, there is no reason why s.52 cannot apply to the earlier inducement, even if, as Puxu held, the conduct in respect of the purchase itself does not offend s.52 because, by then, the consumer knows or ought to have known that he is purchasing a product other than that of the Hattori Seiko group. For this reason alone, the undertaking now proffered by the respondents is no answer to the applicant's claim. It follows that, subject to any discretionary defence, the applicant has established its claim for relief under s.52 in the terms sought in paras. l and 2 of the relief claimed, supra.

32. The applicant alleges another contravention of s.52 in the form of the misrepresentation made in the press release to the effect that the "Model 8640" and "Model 8680" computers marketed by the corporate respondents are the products of the Hattori Seiko group. In my opinion, a false impression to that effect is created by a reading of the release. The reference, in the release, to the "current" or "previous model" could only be interpreted as the model "8600" computer of the Hattori Seiko group, especially when the announcement purports to be made by "Seiko Computers". The attempt, in the note on the last page of the release, to finesse by distinguishing between "Seiko Computers" and "SEIKO", does not, as Mr. Costello's evidence indicates, correct the erroneous impression conveyed by the text of the release itself. It follows, in my view, that, subject to any discretionary defence, the applicant has established a further contravention of s.52 in this respect and that it is entitled to the relief claimed in para.3(a), supra.

33. Finally, the applicant again challenges the release as misleading or deceptive or as likely to be so, contrary to s.52, in respect of the representation, express or implied therein, to the effect that, whilst not the fact, model "8600" computer of the Hattori Seiko group has been replaced or superseded by the model "8640" or model "8680" computer marketed by the corporate respondents and not the products of the Hattori Seiko group. The release speaks of "replacement" of the "current" model. It refers also to software compatibility by reference to "the previous model". This language alone, supported, if need be, by the context in which the announcement was made, amply vindicates the applicant's complaint on this score. Again, in my opinion, subject to the discretionary defence, the applicant has demonstrated its claim for relief in para.3(b), supra.

34. The discretionary defence remains for consideration. In essence, the defence seeks to impugn the conduct of the applicant by claiming that the model "8600" computer, when initially released by the Hattori Seiko group, was deficient in certain respects and that the applicant failed to supply to the corporate respondents the enhancements which were needed to overcome the deficiency. The evidence on the point is not at all specific but, in my view, even if the respondents were able to lay a factual foundation for their assertions (and I make no findings in this respect), such conduct could not constitute a defence to a claim for injunctive relief under s.80 based on a contravention of s.52, given the public interest involved (see Puxu at p.10; Taco Bell at p.207; World Series Cricket Pty. Ltd. v. Parish (1977) 16 ALR 181 per Bowen, C.J. at pp 189-190). Even if the traditional equitable defence that "clean hands" are required was available in a statutory context such as s.52, the conduct here relied on does not have the "immediate and necessary" relation to the cause of action sued for (see Halsbury's Laws of England, 4th Ed. Vol. 16 p.875; Meagher, Gummow & Lehane, Equity - Doctrines and Remedies (1975) at p.68). In my opinion, the defence fails.

35. In the circumstances, I need express no view on whether any contravention of s.53(d) has occurred.

36. I propose to grant injunctive relief as sought by the applicant, except so far as concerns the third respondent. Although there is evidence that this respondent is a member of the group of companies controlled by Messrs. Foot and Bovill, there is nothing else to suggest that it has been involved in any of the conduct now complained of. So far as it is concerned, I propose to reserve to the applicant liberty to apply for relief should that become necessary. On the other hand, I propose to enjoin the fifth respondent by reason of his involvement in the matter, having regard to his knowledge of the facts constituting the contraventions.

37. I make the following orders:

1. Order that the first and second respondents, and each of them, by themselves, their servants and agents, be restrained from engaging in conduct that is misleading or deceptive or likely to be so by using the name "Seiko Computers" or the name "Seikosha" in the course of any business which offers for sale computers or computer equipment not those of the applicant or of Hattori Seiko Company Limited.

2. Order that the first, second, fourth and fifth respondents, and each of them, by themselves, their servants and agents, be restrained from engaging in conduct that is misleading or deceptive or likely to be so by making any statement that or to the effect that:

(a) the first or the second respondent has any

business or trade connection with the group of companies known as the Hattori Seiko group;

(b) Model "8640" or model "8680" computers

offered for sale by the first and second respondents are products of the applicant or of Hattori Seiko Company Limited;

(c) Model "8600" computer of Hattori Seiko

Company Limited has been replaced by or superseded by model "8640" or model "8680" computers offered for sale by the first and second respondents.

3. Reserve liberty to the applicant to apply, on three days' notice, for such relief against the third respondent as it may be advised.

4. Order that the respondents other than the third respondent pay the costs of the applicant.