Re Bentley Fragrances Pty Limited and Charles of the Ritz Group Limited v Gdr Consultants Pty Limited and Alimeast Pty Limited [1985] FCA 189 (7 June 1985)

FEDERAL COURT OF AUSTRALIA

Re: BENTLEY FRAGRANCES PTY LIMITED and CHARLES OF THE RITZ GROUP LIMITED
And: GDR CONSULTANTS PTY LIMITED and ALIMEAST PTY LIMITED
No. 135 of 1985
Trade Practices
(1985) ATPR para 40 - 589

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.

CATCHWORDS

Trade Practices - Misleading or deceptive conduct - Representation that goods have a particular standard or quality - Misleading conduct in relation to characteristics of goods - Fragrance advertised as "like" certain well known perfumes - Statements made that even an expert could not tell difference - Evidence to show a prima facie basis that aroma of fragrances was unlike that of the perfumes - Use of packaging describing the fragrances as "like" the perfumes - Application for interlocutory injunction.

Practice - Application for orders requiring respondents to disclose information regarding source of supply of fragrances and their packaging.

Norwich Pharmacal Co v The Customs and Excise Commissioners [1973] UKHL 6; (1974) AC 133 applied.

Trade Practices Act 1974 ss.52, 53(a), 55.

HEARING

SYDNEY
7:6:1985

ORDER

1. The respondents, each of them, their servants and agents be restrained until further order from engaging in conduct in trade and commerce that is misleading and deceptive or likely to mislead or deceive by:

(a) using or causing to be used the names

"L'Air du Temps", "Oscar de la Renta" and
"Opium" or any of them in any brochure,
literature, advertisement or writing or
in any container or packaging used for or
in connection with the manufacture,
distribution or sale of any perfume,
perfume concentrate, parfum de toilette
or eau de toilette; or

(b) representing whether orally or in writing
that the product manufactured,
distributed or sold by the respondents or
either of them is indistinguishable in
perfume or fragrance or has a close
likeness in perfume or fragrance to any
perfume, perfume concentrate, parfum de
toilette or eaux de toilette distributed
in Australia by the first applicant under
the name or under a name which includes
the name "L'Air du Temps", "Oscar de la
Renta" or "Opium" or any of them.

2. That each of the respondents by one of its directors within seven (7) days file and serve on the applicants an affidavit which states in respect of each of the three packaged bottles of fragrance which constitute Exhibit B in these proceedings whether:

(a) the respondent acquired the package, the
bottle and the fragrance from three
different suppliers;

(b) the respondent acquired the fragrance in
the bottle from one supplier and the
package from another supplier; or

(c) the respondent acquired the fragrance in
the bottle in the package from one
supplier,

and if in respect of all or any of the three
packaged bottles of fragrance the answer to (b) or
(c) is in the affirmative, states in respect of
each of the three packaged bottles of fragrance

(d) the name of the supplier or suppliers of
the fragrance in the bottle or the
fragrance in the bottle in the package,
as the case may be, to the respondent;

(e) the address of the supplier or suppliers;

(f) the quantity of like goods acquired from
the supplier or suppliers; and

(g) the date of each supply.

3. The costs of this application be the applicants' costs in the principal proceedings.

4. Stand the matter over until Tuesday 25 June 1985 at 9.30 a.m.

5. Liberty to any party to apply on twenty-four hours' notice. That liberty is in respect both of the orders that have been made or the matter of directions for further steps in the proceedings

NOTE: Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

DECISION

This is an Application for interlocutory injunctions in relation to the distribution of what are called in the evidence "fragrances". The applicants are two companies. The first applicant, Bentley Fragrances Pty Limited, is a company incorporated in New South Wales which has for a number of years distributed within Australia three perfumes or fragrances which appear to have a considerable reputation, both in Australia and elsewhere. The affidavit of Mr Bruce Moonie, the supply director of the first applicant, indicates that the company is the sole distributor of those fragrances within Australia. Distribution has taken place over varying times in respect of each of the three fragrances. The company has distributed a fragrance manufactured by a company called Nina Ricci and styled "L'Air du Temps" since at least 1967, a fragrance produced by Oscar de la Renta Limited and called "Oscar de la Renta" since 1981 and, since 1977, a fragrance styled "Opium" which is apparently produced by Yves St Laurent and distributed by Charles of the Ritz Group Limited, a United States company which is the second applicant. The evidence indicates that each of the three names is the subject of a trademark registered in Australia, the trademark in respect of "Opium" being registered in the name of the second applicant.

2. Mr Moonie's affidavit sets out the net wholesale value after sales tax of the Australian sales by Bentley Fragrances for each of the fragrances. The sums are considerable, currently ranging from $2.7 million per year in the case of "Opium" to $651,000 in the case of "Oscar de la Renta". Mr Moonie also establishes that substantial sums were spent during 1984 by the first applicant in advertising each of the three perfumes, those sums running into hundreds of thousands of dollars. It appears to be clear that the first applicant as distributor and the second applicant as the overseas supplier and owner of the trademark "Opium" have a considerable interest in maintaining the reputation of the three fragrances and in maximizing sales in Australia of those fragrances.

3. There have recently appeared in magazines of wide circulation, namely "Womans Day" and "TV Week", advertisements placed by or on behalf of one or both of the respondents. The advertisements for practical purposes are in the same terms. They show a reproduction of a bottle of a fragrance styled "Joy de Jean Patou, Paris", and a reproduction of a bottle styled "like/tel Joy by Joanne". The bottles are of similar volumetric capacity but the designs of the bottles are quite dissimilar. The advertisement compares the cost of what I will call the original product with the cost of the likeness and the difference is marked $125 in the case of the original and $19.95 in the case of the likeness. In prominent printing the advertisement includes the words, "and your nose can't tell the difference". It then goes on to announce: "New from Joanne - stunning likenesses of -" and it lists 12 well-known perfumes. They include "L'Air du Temps", "Opium" and "Oscar de la Renta". The advertisement goes on to state that Joanne believed that the world's top perfumes are too expensive and that they have an alcohol base that dries the skin, "so Joanne assembled a team of clever young scientists to develop a new range of true likenesses of the world's 12 top perfumes". It includes the words, "and they succeeded". After commenting on the difference in the base the advertisment includes these words:

"Now you can envelop yourself in the romantic,
million dollar aura of whichever Joanne
likeness you choose for just a few cents a
day. You'll be the envy of your friends ...
because only you will know its Joanne and not
the brand costing perhaps hundreds of dollars
more. Not even experts could tell the
difference."

I think it is quite clear that the advertisement is conveying to readers that what is offered for sale by Joanne is not the same as the original fragrance. This appears not only because of the repetition of the word likeness both in the body of the advertisement and in the mail order coupon at its foot but also because of the very description of how it came about that Joanne is able to offer these products for sale.

4. However, the applicants complain that a reader of the advertisement would be led to believe that the fragrances offered for sale by Joanne are indistinguishable in point of aroma from the original perfumes of which they are likenesses. In his affidavit Mr Moonie, who has been employed in the industry for 14 years and who claims to be competent to distinguish fragrances on the basis of smell, states that he has compared by smelling each of the three original fragrances with the product advertised and sold by the respondents and that each of the relevant original perfumes is distinctly different from the likeness marketed by the respondents. Mr Moonie's evidence was not challenged either by cross-examination or by evidence in reply. I therefore proceed on the basis that, for the purposes of this application, it is established that there is in fact a distinct difference between the original perfume and the relevant "likeness"; at least in so far as the three perfumes with which this application is concerned.

5. There was some question as to whether Mr Moonie should be regarded as an expert. It seems to me that he does have expertise. The art of distinguishing fragrances is something which I would have thought was best learned on the job by people who work in the industry. No doubt there are matters of scientific learning which may be used in support of an opinion on that matter but I would not have thought it was necessary to have scientific or academic qualifications in order to say that there was a distinct difference between the perfumes. However, it does not seem to me to matter very much whether Mr Moonie should be regarded as an expert or not. The fact is that the advertisement makes two claims in respect of not telling the difference. Firstly it makes a claim in effect that non-experts cannot tell the difference; it does this in two ways, both by the bold heading to which I have referred -- "and your nose" -- and also by the reference to "your friends" not appreciating the difference. This seems to me clearly to indicate that ordinary people will not be able to distinguish between the original and the imitation. However, the advertisement goes on to say that "not even experts could tell the difference". So whether or not Mr Moonie is regarded as an expert or, for present purposes, an ordinary person, his evidence indicates that the statement in the advertisement is false.

6. Under those circumstances it seems to me that there is at the very least a serious question to be tried as to whether the publication of the advertisements constitutes misleading or deceptive conduct within s.52 of the Trade Practices Act 1974 and also whether there is a false representation that goods have a particular standard or quality within the meaning of s.53(a) of the Trade Practices Act and probably also as to whether the respondents have not engaged in conduct that is liable to mislead the public as to the characteristics of goods within the meaning of s.55 of the Trade Practices Act. I do not think that the gravamen of the applicants' case is, or indeed could be, that the products look alike or that it is represented that the respondents' product is the applicants' product. As I have said the get-up is quite different and the advertisement makes it quite plain that the products are not the same.

7. However, the most significant characteristic of perfume no doubt is the aroma that it gives off, and to say that the aroma of one is indistinguishable from another, if in fact that statement is not true, seems to me to involve an arguable case in relation to each of the three sections of the Trade Practices Act to which I have referred. In referring to an arguable case I have in mind at least the standard of "a serious question to be tried", although I would have thought on a prima facie basis the strength of the case could be put much higher. There seems to me to be quite a strong case under those sections.

8. The evidence indicates that the advertisement was seen by an employee of the first applicant, Josephine Rigon, who thereupon went to the address shown on the order coupon shown in the advertisement at Kingsgrove, a suburb of Sydney. She there purchased a bottle of each of the three fragrances, marked by the respondents as being "like Opium", "like L'Air du Temps" and "like Oscar de la Renta". It is the contents of those bottles which were compared by Mr Moonie with the original products. The packaging in respect of each of those three bottles is similar. The bottles are in a shape which is quite dissimilar from the shape of the bottles of the original perfumes. The package bears on the outside of it words both in the English language and French language, the English version being: "Essence oil perfumed by Joanne; ingredients fragrance, dipropolene, glycol; fragrances like/tel Opium" and, on the bottom, "Generic Perfumes International, 128 1 Delta BC 34 M T3 TC - made in Canada".

9. In relation to the conduct of the respondents in marketing the products packaged in that way, the applicants rely heavily upon the use of the relevant names, "Opium", "L'Air du Temps" and "Oscar de la Renta", both on the outside of the package and on the bottle. Those names are used, but in the context of the following the words, "like/tel" with the addition of the words, "by Joanne".

10. Counsel for the applicants argues that the words "like/tel" will not necessarily inform the person who sees the package or the bottle that the contents are different from the original. He points to the comparative size of the letters of those words as against the letters of the name and suggests that people are likely to be merely confused. He emphasises that the names have considerable reputation and that not all persons who purchase will appreciate that the get-up is different.

11. Alternatively, counsel puts the submission that a statement that a product is "like" the original must be read in this context as a statement that it is like it in terms of aroma, being the most relevant characteristic of a fragrance. In short, he seeks to put the matter two ways, depending on the view that is taken as to whether the purchaser appreciates the fact that the package and the bottle are making a statement that this is not the original but merely like the original.

12. In relation to this claim, it seems to me that there is a serious question to be tried, within the meaning of that phrase as used in the authorities. It may be that the claim in respect of this matter is not as strong as in respect of the advertisement, but I think it is correct, as counsel suggests, that whether or not the purchaser appreciated the significance of the word "like" he or she is likely to be mislead. If he or she did appreciate that significance, then I think he or she would understand it to mean that it was like the original in terms of the aroma of the product; and that, on the evidence, is an incorrect statement. If, on the other hand, one assumes that this was not appreciated because of the size of the lettering, then the person is likely to be in a position of having his or her understanding dominated by the use of the name, causing a belief that this is indeed the same product.

13. I come then to the balance of convenience in respect of the granting of interlocutory relief along the lines of that sought in para.1 of the amended Application. I have indicated that the evidence establishes a considerable trade in the original perfumes by the applicants and a considerable investment in their reputation as a result of advertising. There is no evidence as to the position of the respondents. It appears to be a fair inference that they have incurred the expenditure of two magazine advertisements -- how much that would amount to in dollar terms I do not know -- and there is nothing to indicate any other expenditure. I do not know whether they have laid in any stock of the products or outlayed capital in any other way.

14. Under those circumstances I think I have to approach the matter on the basis that if the respondents are allowed to continue to sell their products, pending the final disposal of the matter, the applicants will be confronted, or may be confronted, with competition by products which sell at something like 20 per cent of the cost of their products and which are stated to be indistinguishable in terms of the only significant characteristic of the products. If people believe that statement and choose to purchase the respondents' products instead of the applicants' products, they suffer the loss of sales. If people believe the statement and purchase the respondents' products, being people who would not have been prepared to spend five times as much to purchase the applicants' products, then it can be said that the applicants have lost nothing in terms of sales. However, if the position is that the products are unlike that of the applicants, and if it is a fragrance which does not attract the approval of purchasers, then it seems to me that there is a real potentiality for damage to the reputation of the products marketed by the applicants.

15. I think that it is a reasonable apprehension of any vendor of a product of high reputation that the reputation of the product, and therefore its commercial value, would be damaged by the marketing of a cheaper product which is falsely stated to have the same relevant characteristic. If such damage occurs, then it is almost impossible for the applicants to prove the facts to quantify the extent of their damage. If, on the other hand, an injunction is granted, the position will be that the respondents are precluded from proceeding with the marketing of these products. If, in the end, it turns out that the Application fails, the respondents would at least be able to point to some material to indicate the extent of the response that they have had from the initial advertisement. It would not be easy to assess their damages, but I think that there is some basis upon which the Court could assess a figure which was likely to provide proper compensation for them.

16. I think that considerations of the balance of convenience point to the granting of injunctions and I propose to grant injunctions broadly in terms of para.1 of the amended Application. I think it is correct to say, as has been argued on behalf of the respondents, that as at presently framed it is too wide in that it refers to products other than those referred to in para.3 of Mr Moonie's affidavit. I will come back to the precise form of the order in due course.

17. There is a further aspect of the matter. In para.7 of the Application, the applicants sought an order that the respondents, by one of its directors, within seven days file and serve on the applicants an affidavit which, in relation to each of the relevant perfumes, supplies certain information. The basis upon which that application was made was the decision of the House of Lords in Norwich Pharmacal Co v. The Customs and Excise Commissioners [1973] UKHL 6; (1974) AC 133. During the course of argument, I indicated to counsel for the applicants that the orders sought in para.7, appeared to be too broad. They seemed to have been drawn on the assumption that the products marketed by the respondents were packaged and imported in that form. It may well be that this is so, but there is no evidence of that fact. The respective packages do state that the products were made in Canada, but that is not inconsistent with the possibility that it was imported into Australia in bulk, and not under any particular brand name, and here packaged by the respondents or one of them, or some other person.

18. Counsel then sought and obtained leave to amend the Application so as to proffer an alternative form of order, contained in para.6A of the amended Application. That order would require the respondents to file and serve affidavits stating whether the respondents acquired the package, the bottle and the fragrance from three different suppliers; whether the respondents acquired the fragrance in the bottle from one supplier and the package from another supplier, or whether the respondents acquired the fragrance in the bottle in the package from one supplier and, if in respect of all or any of the three packaged bottles or fragrances the answer to either of the last two questions was in the affirmative, to state in respect of each of the three packaged bottles of fragrance, the name of the supplier or suppliers, the address of the supplier or suppliers, the quantity of like goods acquired from the supplier or suppliers and the day of each supply.

19. Counsel for the respondents resists the making of any order along these lines, saying that the request amounts to a fishing expedition designed to provide material for some other action against some other respondent. I think that there is no doubt that the applicants hope to obtain information which will enable them to consider whether they should take action against other parties, but I do not think that that is a legitimate objection to the type of order which is sought. In Norwich Pharmacal, the application was brought against the Customs and Excise Commissioners in order to obtain information as to the person involved in importing a particular chemical compound into the United Kingdom in breach of the rights of the appellants. The Commissioners were not suggested to have acted wrongly in any way, but they were involved in the transaction as a government agency and it was held that this was enough to entitle the appellants to an appropriate order. In that case it was made to appear to the court that some person was acting wrongfully. The purpose of the proceedings was to find out who was that wrongdoer in order that proceedings might be taken against him. I can see no difficulty in principle in making an order such as that made in Norwich Pharmacal against a respondent who is himself both a wrongdoer and a person who can cast light on the identity of some other wrongdoer. The present applicants could have brought a separate action simply seeking relief along the lines of that sought in para.6A or 7 and without seeking any other relief against the present respondents. It cannot be a proper objection that they have chosen to do the two things in the one Application. There is, of course, this distinction between the present case and the Norwich Pharmacal case, namely that in the Norwich Pharmacal case it was made to appear to the court that there definitely was some other person who had acted wrongfully. In the present case this is not clear. It is conceivable that, as I have said, the fragrances were only packaged by the respondents and that they are the only people who have acted in any way in contravention of the Trade Practices Act or in breach of any trademark rights. It is for that reason that I think that the relief to be granted should be restricted to finding out the facts about the nature of the packaging and it should not go on to require the information sought in para.7.

20. However, it seems to me that the modified claim for relief contained in para.6A is relief to which the applicants are entitled. The applicants, through their counsel, have given to the Court the usual undertakings as to damages. Having regard to that fact and for the reasons that I have set out, I make the following orders: I order that the respondents, each of them, their servants and agents be restrained until further order from engaging in conduct in trade and commerce that is misleading and deceptive or likely to mislead or deceive by:

(a) using or causing to be used the names
"L'Air du Temps", "Oscar de la Renta" and
"Opium" or any of them in any brochure,
literature, advertisement or writing or
in any container or packaging used for or
in connection with the manufacture,
distribution or sale of any perfume,
perfume concentrate, parfum de toilette
or eau de toilette; or

(b) representing whether orally or in writing
that the product manufactured,
distributed or sold by the respondents or
either of them is indistinguishable in
perfume or fragrance or has a close
likeness in perfume or fragrance to any
perfume, perfume concentrate, parfum de
toilette or eaux de toilette distributed
in Australia by the first applicant under
the name or under a name which includes
the name "L'Air du Temps", "Oscar de la
Renta" or "Opium" or any of them.

21. I further order in accordance with para.6A of the amended Application. The proper order for costs is that the costs of this application be the applicants' costs in the cause. I stand the matter over until Tuesday, 25 June at 9.30 am and I will give any party liberty to apply on twenty-four hours' notice. That liberty is in respect both of the orders that have been made or the matter of directions for further steps in the proceedings.