Re Irish Distillers Limited; Penfolds Wines Pty Limited and the West Coast Cooler Company Pty Limited v S Smith & Son Pty Limited and the Vintners Company Pty Limited [1986] FCA 429 (5 December 1986)

FEDERAL COURT OF AUSTRALIA

Re: IRISH DISTILLERS LIMITED; PENFOLDS WINES PTY. LIMITED and THE WEST COAST
COOLER COMPANY PTY. LIMITED
And: S. SMITH & SON PTY. LIMITED and THE VINTNERS COMPANY PTY. LIMITED
No. G514 of 1986
Trade Practices

COURT

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

CATCHWORDS

Trade Practices - market for coolers - applicants' product "West Coast Cooler" - heavily advertised - association of coastal image with applicants' product - whether calling rival product "Coastal Cooler" misleading or deceptive conduct - whether mere confusion or uncertainty - disbelief of evidence entitling court to infer opposite - no intention to mislead or deceive.

Trade Practices Act 1974 ss.52,53

Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191.

Taco Company of Australia Inc v. Taco Bell Pty Ltd (1982) 42 ALR 177.

Steinberg v. Federal Commissioner of Taxation [1973] HCA 11; (1975) 134 CLR 640.

Cadbury Schweppes Pty Ltd v. Pub Squash Co Pty Ltd (1982) 32 ALR 387.

HEARING

SYDNEY
5:12:1986

Counsel for the applicant: Mr J.D. Heydon

Solicitors for the applicant: Dawson Waldron

Counsel for the respondent: Mr P.M. Jacobson

Solicitors for the respondent: Sly & Russell

ORDER

The application be refused.

The applicants pay to the respondents their costs of and incidental to the proceedings, including reserved costs, to be taxed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

These are proceedings in which the applicants seek relief in respect of alleged contraventions of s.52(1) of the Trade Practices Act 1974, of s.53 of the same Act, and in respect of passing off.

2. The applicants are engaged in manufacturing and distributing a brand of low alcohol fruit flavoured wine drink (or "cooler") under the name of "West Coast Cooler". The first applicant is an Irish company which is a subsidiary of Irish Distillers Group PLC which in early 1984 had developed the product which was test-marketed in Ireland under the name of "West Coast Cooler". The first applicant began manufacturing West Coast Cooler in early 1985 and has appointed licensees to manufacture, market and sell West Coast Cooler around the world. The second applicant, pursuant to an agreement dated 30th September 1985 between itself and the first applicant has an exclusive license to manufacture, market and sell West Coast Cooler in Australia and other South Pacific countries. The third applicant, a subsidiary of the second applicant, appears to be the actual manufacturer of West Coast Cooler in Australia.

3. West Coast Cooler was first offered for sale in Australia on 18th April 1985 in New South Wales and the Australian Capital Territory and at later dates in that year in the other States and the Northern Territory. It is sold in 250 ml. glass bottles each bearing a blue and white label.

4. The second respondent is a subsidiary of the first respondent, S. Smith & Son Pty Ltd. and in September 1986 the respondents began selling their own type of cooler under the name "Coastal Cooler". Coastal Cooler is sold in two litre casks which are brightly coloured in blue, yellow, orange, red and green with the words "Coastal Cooler" in white.

5. It may be said immediately that there is no similarity at all between the packaging and "get-up" of the two coolers.

6. The term "cooler" has come to be used in the market as a generic term describing a drink consisting of a blend of fruit, or fruit flavoured, juice and wine. "Coolers" were first offered for sale as such in the United States in 1981 and have since become popular in other parts of the world, early 1985 being the time when the first coolers were offered for sale in Australia. Coolers are of two varieties, namely carbonated, of which the applicants' cooler is an example, and still, of which the respondents' cooler is an example. This fact, to a certain extent, determines the packaging of the product as a carbonated cooler cannot be packaged in a cask and must be sold in a bottle.

7. The evidence establishes that coolers are heavily advertised and are very popular in Australia, the advertiser's target group being young adults of 18 to 24 years with television, radio and other advertising placing emphasis on images with which the target market is perceived to identify. As the first respondent's managing director and marketing director Mr Hill Smith deposed:-

"These images were based on hedonistic pursuits and in

particular upon sunshine, sand, sea, surfing and island
escapation."

The applicants in particular have indulged in extensive promotion of their product including television and radio advertisements featuring the words and phrases "Head for the Coast", "Heading for the Coast", and "Coast".

8. By about March 1986 when Mr Hill Smith decided that the respondents should enter the market with their own cooler, West Coast Cooler had achieved, as I accept, a substantial share of the market to which I have referred. It was acknowledged by Mr Hill Smith in evidence to have been the joint market leader.

9. I am also satisfied that there had been achieved in the mind of potential consumers in the market and those selling in the market (such as hotels, restaurants, drive-in bottle shops and liquor stores) an identification of the name West Coast Cooler with the applicants' product and also, by reason of the extensive promotion which had taken place, an association of images of sea, surf, sand and, more generally, beaches with the product West Coast Cooler. In that sense there was an association of a coastal image with the applicants' product. I do not accept, however, that there had been established such an identification with the applicants' product of the coastal "concept" - if I may be forgiven that shorthand expression - that to use the word "coast" or a derivative of it in the name under which a cooler was marketed was to mislead or deceive or to be likely to mislead or deceive potential wholesale or retail purchasers of cooler. In this regard the nature of the product is such that the promotion of it will almost inevitably be based in large measure on images of beaches, and that is evidenced by the names chosen by suppliers of cooler, other than those presently in question, so many of which are designed to evoke such images.

10. It is clear, of course, that some possibility of confusion or uncertainty will not suffice to prove misleading or deceptive conduct (Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191) and that in deciding the question raised by s.52(1) one must, in looking at a particular section of the public, treat it as including "the astute and the gullible, the intellegent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations" (Taco Company of Australia Inc. v. Taco Bell Pty Ltd (1982) 42 ALR 177 at 202).

11. I think that there is some possibility of confusion or uncertainty in the minds of some purchasers, by reason of the fact that there is some similarity in the names of the two coolers. I do not think, however, that this is likely to be significantly any greater than the confusion or uncertainty arising between say West Coast Cooler and say Island Cooler. I do not think that the confusion or uncertainty is due to misleading or deceptive conduct on the part of the respondent (see Taco Company of Australia Inc. v. Taco Bell Pty Ltd. (supra) at 203).

12. I may say that Mr Hill Smith gave evidence that it was he who, towards the end of April 1986, decided on the name Coastal Cooler. He denied in evidence that the success of West Coast Cooler played any part in his decision to choose the name Coastal Cooler. I do not accept his evidence on this point and the nature of the issue is such that I am entitled to infer from that disbelief that the success of West Coast Cooler did play a part in the selection of the name Coastal Cooler (compare Steinberg v. Federal Commissioner of Taxation [1973] HCA 11; (1975) 134 CLR 640 at 694). I am conscious of the fact that, as the Privy Council said in Cadbury Schweppes Pty Ltd v. Pub Squash Co Pty Ltd (1980) 32 ALR 387 at 396, where an intention to deceive has been found, it is not difficult for the Court to infer that the intention has been, or in all probability will be, effective. Making a finding of such an intention is not decisive of the ultimate issue, however (see the same case at 397).

13. In this case I think that Mr Hill Smith did not intend to mislead or deceive in the sense of acquiring any of the reputation of West Coast Cooler, or intending to pass Coastal Cooler off as West Coast Cooler. Rather I think that he recognized that the success of West Coast Cooler had shown that the term "coast" well encapsulated the marketing concepts upon which he wished to rely. One can well understand that approach being perceived by the applicants as "half-smart" rather than "smart", but that does not of itself give rise to a right to restrain the conduct.

14. In the result the claim under s.52 of the Trade Practices Act fails. It is accepted by the applicant that if that claim fails, the other claims must also fail.

15. The application is refused. I order that the applicants pay to the respondents their costs of and incidental to these proceedings, including reserved costs, to be taxed.