Re Rent-A-Ute Pty Limited v Golden 44 Pty Ltd; Kenneth John Petersen and Allan Douglas Perry [1987] FCA 229 (15 July 1987)

FEDERAL COURT OF AUSTRALIA

Re: RENT-A-UTE PTY. LIMITED
And: GOLDEN 44 PTY. LTD.; KENNETH JOHN PETERSEN and ALLAN DOUGLAS PERRY
No. QLD G101 of 1987
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.

CATCHWORDS

Trade Practices - s.52 - passing off - protection of business name - use of very similar name - evidence of confusion - name comprised of descriptive words only - interlocutory injunction refused.

Trade Practices Act, s.52

HEARING

BRISBANE
15:7:1987

Counsel for the Applicant: Mr W.T. McMillan

Solicitors for the Applicant: Samuel Leonard & Associates

Counsel for the Respondents: Mr A. Heyworth-Smith

Solicitors for the Respondents: Peterson Cutler & Co.

ORDER

The application for an interlocutory injunction be dismissed;

The applicant pay the respondents' costs of and incidental to the application to be taxed.

Note: Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

DECISION

This is an application for an interlocutory injunction to restrain use of a business name, brought in reliance upon provisions of the Trade Practices Act.

2. The applicant's business is well established and uses the name Rent a Ute (or, sometimes, Rent-a-Ute). The respondent's has started recently and uses the name Handy Rent A Ute. The history of the applicant's business, which has been quite successful, is as follows. Mr M. M. Bone and his father operated a service station in 1983 and began to rent out motor utility vehicles for short and long periods. During the same year a few agents were appointed to conduct the same business. In February 1985 Mr Bone formed the view that he should franchise his business, and approached a number of service station proprietors, inducing them to pay money to participate in the enterprise. More accurately, each franchisee ran a separate business under the guidance of, and with some assistance from, the applicant and made payments to the applicant. There are now 43 franchisees in Queensland, 42 in New South Wales and 22 in Victoria and smaller numbers elsewhere. There is a total of over 250 depots; some franchisees have more than one depot.

3. The applicant has, to some extent, advertised its services "either as the direct supplier or latterly as the franchisor". In 1986 and 1987, its total expenditure on advertising is said to have been $115,729. That is a substantial amount, but plainly not enough to make much impact across the nation. There is no evidence that consumers or prospective consumers of the relevant kind know the name "Rent a Ute" as a source of utilities for hire.

4. In February 1987, the applicant appointed the third respondent as a franchisee in the Tweed Heads area and began discussing with him the possibility of his taking a franchise in Western Australia and Tasmania. Since that would have involved a large payment by the third respondent, he discussed the position with the second respondent, a solicitor, and the thought occurred to them that it might be easier and cheaper to set up a competing business. They did so, and the first respondent came into being.

5. There is evidence that they cast about for a suitable name and lit upon "Handy Rent a Ute". An innocent explanation has been advanced for the selection of the name. I do not find it entirely convincing but am not prepared to decide the case on the basis that there is any likelihood that the selection would be held a dishonest one, at the trial. The third respondent is now out of the business, but the first respondent, owned by the second respondent, is attempting to expand its operations.

6. There is evidence of confusion and I accept that there has been some. Indeed, even in the absence of evidence, one would assume that the use of such similar names by two traders would create confusion. The word "Handy" is not particularly memorable, and the signs used by the first respondent are such that some who see them might take it that "Handy" is a mere word of praise rather than part of the trade name.

7. There is also evidence that the first respondent has copied some of the applicant's documents and on the material presently available it seems obvious that it has done so. However, that seems to me peripheral.

8. I have had placed before me photographs of the signs used by the contending parties at depots and on their vehicles. They look very different. The applicant has a white sign on a red background, with some yellow and black lettering and figuring. The first respondent uses a yellow sign with a large red "Handy", a black "Rent A Ute" and the price in yellow outlined in black. The style of printing is dissimilar and the first respondent's sign has a symbol of a pointing mailed fist, which has no counterpart in the applicant's sign. Mr McMillan, who argued the case well for the applicant, pointed out that the prices shown on the signs are of similar style (and the same in amount); nevertheless the signs, as I have said, are dissimilar in appearance.

9. The word "ute" as a contraction of "utility" has come into very common use and many, perhaps most, people use the contraction more commonly than the full word. The combination of words "Rent a" followed by the name of an object is also fairly common in the business community, "Rent a Car" being extremely common. The main point taken on behalf of the first respondent is that "Rent a Ute" is essentially descriptive and can only be protected in unusual circumstances. As Stephen J. said in Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. [1978] HCA 11; (1978) 140 CLR 216 at p 229:

"There is a price to be paid for the advantages
flowing from the possession of an eloquently
descriptive trade name. Because it is descriptive
it is equally applicable to any business of a like
kind, its very descriptiveness ensures that it is
not distinctive of any particular business and
hence its application to other like businesses will
not ordinarily mislead the public. In cases of
passing off, where it is the wrongful appropriation
of the reputation of another or that of his goods
that is in question, a plaintiff which uses
descriptive words in its trade name will find that
quite small differences in a competitor's trade
name will render the latter immune from action ..."

10. It is much easier to find examples of application of this principle than counter-examples. Mr McMillan relied particularly upon the decision of the High Court in B.M. Auto Sales Pty. Ltd. v. Budget Rent A Car System Pty. Ltd. (1977) 51 ALJR 254. There, the respondent managed to achieve protection of its name, the Court rejecting such an argument as was here advanced against the applicant. Gibbs J. said at p.257:

"... it was argued on behalf of the appellants that
the word 'Budget' was an ordinary descriptive word
in common use, and that there was no evidence
sufficient to establish that the name Budget Rent A
Car had become distinctive of the respondent's
business. It is true that 'budget' is an ordinary
word, which nowadays is sometimes used to mean
'inexpensive'. The phrase 'rent a car' contains
three ordinary words, and is commonly used to
describe a business of a particular kind. However
it is clear law that a name composed of descriptive
words may become distinctive of the business of a
particular person, and if a plaintiff shows that
the name in fact distinguishes his business and
that the use of the name by the defendant is
calculated to deceive persons into supposing that
the business carried on by the defendant is that of
the plaintiff, and is likely to cause damage to the
plaintiff's business, he will be entitled to relief
... In the present case there was ample evidence
from which it could be inferred that the name
Budget Rent A Car had become distinctive of the
respondent's business in various parts of Australia
by the year 1968."

11. The principal point of the Budget Rent A Car case, as I read it, was that Budget succeeded in protecting its name in the Northern Territory although it had only a small presence there. It won because it had made the name nationally well-known.

12. There are of course numerous authorities in this area and assistance is able to be gained from studying them as examples of the application of the basic principle. But it is unnecessary to analyse a number of authorities, since there is little doubt as to the side of the line on which this matter falls. A marginal case, decided a little later than the Budget case, is City Link Travel Holdings Ltd. v. Lakin (1979) FSR 653. That concerned the use of the business name "City Link" as describing the trade of express delivery of parcels. Whitford J. was of course confronted with the argument that the name was merely or largely descriptive and said at p.663:

"Although there is no doubt a strong element of
descriptiveness in the words 'city link' in
relation to a parcels delivery service, or indeed
in relation to other services involving a link
between cities, it is not, I think, quite so strong
as the link between 'cellular clothing' and
'clothing' of a cellular construction, or indeed
'office cleaning' and the cleaning of offices. So
that I would not say it was a case where it would
be impossible to establish a secondary meaning, a
reputation."

13. His Lordship's references were to the two cases of The Cellular Clothing Company, Limited v. Maxton and Murray Ltd. (1899) AC 326 and Office Cleaning Services Ltd. v. Westminster Window and General Cleaners Ltd. (1946) 63 RPC 39. I think that "Rent a Ute" is just as descriptive as, for example, "cellular" applied to a particular sort of cloth. There is an onus in such a case on the applicant to establish his right to exclusive use of the description of such a business by satisfying the test referred to - i.e., to quote again from the Budget Rent A Car case, by showing that the name has "become distinctive of the business of a particular person".

14. It was argued on behalf of the applicant that I should find there is a serious question to be tried on that issue. There seems to me to be no evidence upon which it could possibly be found that the name "Rent a Ute" has become distinctive of the applicant's business. It is probable, in view of the hundreds of depots there are scattered throughout parts of the eastern states, that many people will have seen the sign, but it is quite unlikely that anyone seeing a sign associated with the respondent's competing business would be deceived "into the belief that he was getting the goods of A. when he was really getting the goods of B." - Reddaway v. Banham (1896) AC 199 at 210 per Lord Herschell.

15. So far I have considered the matter as arising in a passing off suit. The applicant relied, of course, upon the assertion that there has been misleading conduct within the meaning of s.52 of the Trade Practices Act. The extent to which passing off principles restrict the Court in exercising its jurisdiction to grant relief in respect of breaches of s.52 is, perhaps, still an open question. But simply applying the words of s.52 in their natural meaning, it does not appear to me that the applicant has advanced a case that the respondents' conduct is misleading or deceptive, or likely to mislead or deceive, although there is, as I have said, some evidence of confusion. That evidence is of instances in which some person intending to deal with the first respondent has mistakenly contacted the applicant, and incidents of a similar kind. They will inevitably arise if two people choose to use very similar names for their businesses, but that cannot produce the result that names merely descriptive of a business are necessarily protected.

16. Sections 53 and 53A of the Act were also mentioned by the applicant's counsel, but do not require any separate treatment.

17. Having chosen a merely descriptive name, the applicant must show that its name has come, in the course of time, to acquire "a secondary meaning so as to indicate a particular trade source" - Ricketson, "The Law of Intellectual Property" p.541. Here, in my view, it is quite unlikely that the name "Rent A Ute" has acquired such a meaning, in the community generally.

18. Since the applicant has chosen a descriptive name, "Rent A Ute", and there appears to be no ground for thinking that it will, at the trial, prove that the name has during its short life become distinctive of the applicant's business, the application must be dismissed, with costs.