Betta Foods Australia Pty Ltd v Betta Fruit Bars Pty Ltd [1998] FCA 257 (23 March 1998)

Last Updated: 25 March 1998

FEDERAL COURT OF AUSTRALIA

TRADE PRACTICES - misleading or deceptive conduct - elements of action - use of similar business names - whether applicant used name or mark of "Betta" on confectionary packaging or advertising material in a way which would make them distinguishable to customers - whether descriptive word distinctive - sufficiency of evidence to establish distinctiveness and reputation with members of the public - whether a misrepresentation - differences in logos and get up - whether conduct misled or likely to mislead public - whether confusion or uncertainty existed in public - sufficiency of evidence - to be consumer's confusion not people in the trade of selling products.

INTELLECTUAL PROPERTY - passing off - elements of action - whether reputation established - whether a misrepresentation

BETTA FOODS AUSTRALIA PTY LTD v BETTA FRUIT BARS PTY LTD

VG 715 of 1995

GOLDBERG J

MELBOURNE

23 MARCH 1998

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 715 of 1995

BETWEEN:	BETTA FOODS AUSTRALIA PTY LTD (ACN 006 278 299) Applicant
AND:	BETTA FRUIT BARS PTY LTD (ACN 065 951 395) Respondent
JUDGE:	GOLDBERG J
DATE OF ORDER:	23 march 1998
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The application filed 21 August 1995 be dismissed.

2. The applicant pay the respondent's taxed costs of the application and the hearing including reserved costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 715 of 1995

BETWEEN:	BETTA FOODS AUSTRALIA PTY LTD (ACN 006 278 299) Applicant
AND:	BETTA FRUIT BARS PTY LTD (ACN 065 951 395) Respondent

JUDGE:	GOLDBERG J
DATE:	23 MARCH 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

Introduction and background

The applicant seeks to restrain the respondent permanently from manufacturing, offering for sale or selling fruit bars or any confectionery products by reference to the word "Betta".

The applicant and persons associated with it have been manufacturing and selling ice cream cones for over thirty years. They have used the word "Betta" in a number of manifestations since 1977 and the applicant, under its present name, was incorporated on 24 May 1984 and took over the business previously carried on by the interests associated with it. Since May 1984 the applicant has been engaged in the business of manufacturing and wholesaling a range of confectionery items including ice cream cones, wafer biscuits, chocolate-coated bars and marshmallow products. It is an issue in the proceedings as to the nature of the items sold at any particular time and the manner in which the applicant has displayed and packaged its confectionery items. The applicant initially carried on its business in Thomastown but subsequently moved to premises in Broadmeadows although the date of that move was not clearly identified in the evidence. The applicant also had manufacturing facilities in New Zealand.

The managing director of the applicant, Mr Patrick Salera, gave evidence that the applicant sold approximately seventy confectionery items and referred to a brochure which he said showed the applicant's "complete product range". That brochure does not identify seventy items but does identify various types of ice cream cones, chocolate bars, rolled chocolate wafers, snowballs and various marshmallow products and shows the applicant's Thomastown address. The applicant carries on a substantial business as it employs approximately 200 people and includes among its customers major supermarkets and retail outlets throughout Australia and it also supplies a number of overseas customers. According to the evidence, the applicant manufactures 35 million packets of ice cream cones for sale in supermarkets each year and 1,980,000 trays of snowballs. Amongst the applicant's products are Kick chocolate bars, Coco Mallow bars, Strawberry Mallow Bunny bars and Monster Logs.

In 1990 the applicant registered the trademark "Betta" displayed in a parallelogram logo in the following form:

Click here for Picture

The respondent company was incorporated on 5 August 1994 at the instigation of Mr John Denehey and Mr John McAuley. They decided to form a company to manufacture and distribute fruit bars and in or about July 1994 their wives prepared a list of twelve to fifteen proposed names for their company which included names such as "J & Jaegers Fruit Bars", "Aussie Fruit Bars", "Better Fruit Bars", "Betta Fruit Bars" and "Classic Fruit Bars". When they attended the office of the Australian Securities Commission in August 1994 to reserve the name for their proposed company they were told they could not use the name "Aussie" without a special check being done in Canberra. Mr Denehey said that in the course of the process of choosing the name at the Australian Securities Commission, names were being rejected and eliminated and the name "Betta Fruit Bars" was the name which was discussed and which was not eliminated. The name "Betta Fruit Bars Pty Ltd" was acceptable to the Commission so this name was used. At that time Mr Denehey said he only had a vague knowledge of Betta Foods Australia Pty Ltd as being a business involving ice cream, as a result of his previous employment by Peters Ice Cream in South Australia. Mr McAuley had no knowledge at that time of the applicant. Mr Denehey said that the existence of the applicant played no part whatsoever in the selection of the name Betta Fruit Bars Pty Ltd and, although he was challenged in cross-examination on this evidence, I accept that the existence of the applicant's name did not in fact play any part in the selection of the name of the respondent.

In late 1994 Mr Denehey arranged for the respondent's Betta Fruit Bars logo to be designed and this logo has been used on the respondent's packaging and stationery. The logo consists of a circle with an inner circle. Within the two circumferences the words "Betta Fruit Bars" appear and inside the small circle there is a colour depiction of a number of items of fruit. It is in the following form:

Click here for Picture

The respondent purchased machinery and commenced manufacturing fruit bars in February 1995 and its business has grown substantially. It only manufactures four products in a variety of flavours being:

(a) fruit bars;

(b) choc-coated fruit bars;

(c) fruit chunks;

(d) choc-coated fruit chunks.

Its products are sold throughout Australia and overseas. It supplies a number of major supermarket chains which are also supplied by the applicant. It does not undertake any substantial media advertising or marketing and uses food brokers to distribute its products, some of whom also act as food brokers for the applicant.

The applicant through its managing director, Mr Salera, first became aware of the existence of the respondent and its activities in March 1995 when Mr Salera was contacted by Mr Tagisen, the secretary of the Confectionery Manufacturers' Association of which the applicant is a member. In a conversation with Mr Tagisen, which was admitted subject to objection (to which I will return) Mr Tagisen said to Mr Salera that he had a problem with his packaging where he was putting on the packaging "chocolate-coated" which was misleading because the coating was not chocolate but was compound. Mr Salera asked Mr Tagisen which product he was talking about and he was told Betta Fruit Bars. Mr Salera said that they did not manufacture Betta Fruit Bars.

The applicant pleaded that since May 1984 it has been engaged in manufacturing and wholesaling approximately 100 confectionery items including ice cream cones, wafer biscuits and marshmallow products and that since 1991 it has been manufacturing and wholesaling chocolate-coated bars, under and by reference to the name "Betta". It particularised these bars as being:

(a) Bunny bars (choc-coated strawberry marshmallow bars);

(b) Coco Mallow bars (choc-coated marshmallow bars with coconut flakes);

(c) Kick bars (choc-coated wafer).

The applicant's particulars of the way in which it used the mark "Betta" in connection with the manufacture and sale of its products relied upon, stated that "the packaging and wrapping for most of the lines ... and its advertising material" carried the mark "Betta". There was then a reference to three annexed brochures for three products - Bunny Bar which did not show "Betta" on the front of the packaging or on the display box; Coco Mallow which did not show "Betta" on the front of the packaging or on the display box (although the brochure displayed the name "Windsor Confectionery" at the top) Kick which did not show "Betta" on the front of the packaging or on the display box.

Mr Salera said that at the present time the applicant did not manufacture and had not manufactured fruit bars.

Evidence of use of name "Betta"

It was a contested issue before me as to whether the applicant had ever used the name or mark "Betta" upon these chocolate-coated bars. Mr Salera said in evidence-in-chief that in February 1995 approximately seventy to ninety products were marketed with the Betta logo on them and in response to the question "what products generally were marketed with the Betta logo?", he answered "chocolate bar lines" which he identified as being "mallow bars, anything to do with chocolate bars, anything to do with chocolate-coated or choc-coated bar lines ... our wafer and biscuit lines, our cone, ice cream cone lines". However, the actual products, packaging and marketing material put in evidence was to the contrary. None of the chocolate bars particularised by the applicant and identified by Mr Salera bear the name or mark "Betta", either in the marketing material, point of sale material or outer wrapping of the material. The name of the company does appear on the underside of the Bunny Bar wrapping and the rear of the Bunny Bar and Coco Mallow point of sale boxes but not in a manner where they are displayed or shown to potential customers.

In the course of cross-examination Mr Lyons QC, who appeared with Ms Schoff for the respondent, put to Mr Salera that the wrapping for the Kick bars which was in evidence did not show the name "Betta". Mr Salera accepted that the wrapping did not have a Betta mark or logo on it and said that what he was shown was the inner wrapping. He said that the product could not be sold without the outer wrap as the Kick bars were not sold individually but in packs with the company logo on the packs. He could not remember what was on the outer wrap of the Kick bars. No such outer wrapping was produced by the applicant. The only evidence of the outer wrapping of the Kick bars was shown in a brochure but this pack or wrapping was no different from the inner wrapping. It was coloured red, displayed the name "Kick", described the product as "delicious choc coated wafer" and specified the weight of the product. There was no other name, logo or mark on the front of the pack.

Mr Salera said that the applicant had an annual advertising budget of approximately $2,500,000.00 of which about $500,000.00 was spent on direct point of sale material. Mr Salera identified the principal brochure relating to the applicant's products which was placed before me as being one which displayed the applicant's products and was distributed to buyers around Australia. He said that the applicant had more products than were shown on the brochure but this evidence was not elaborated on in any detail. He did not suggest that the brochure was distributed to consumers and there was no evidence that it was so distributed. Apart from this brochure and the brochures or sheets depicting the Strawberry Mallow Bunny bars, the Coco Mallow bars, the Kick bars and three sheets and boxes relating to ice cream cones, there was no material put before me to identify and demonstrate the extent and nature of the applicant's advertising and marketing materials.

None of the Kick chocolate bars, Coco Mallow bars, Strawberry Mallow Bunny bars and Monster Logs products (all shown in the brochure) are identified, marked or packaged by reference to the name "Betta". The point of sale material and packaging in evidence did not display any name in relation to the Kick, Coco Mallow or Strawberry Mallow Bunny bar products. The point of sale material in relation to the Monster Logs displayed the name "WINDSOR Confectionery" which name was used on a trade brochure relating to Coco Mallow bars.

Mr Lyons put directly to Mr Salera that the Monster Logs, Coco Mallow bars and Strawberry Mallow bars had never been sold under the mark "Betta" and Mr Salera in each case said that he could not answer the question and did not know. The brochure showed that these products were not displayed or marketed under or by reference to the "Betta" name, although on some of the packaging the name and address of the applicant appeared in small print on the underside of the packaging. It is clear from the evidence that the "Betta" mark has been used for some time in relation to ice cream cones and some snowball products but there is no evidence at all, and indeed the evidence is to the contrary, that the mark "Betta" has been used on any of the chocolate-coated or choc-coated bars manufactured and sold by the applicant. The "Betta" mark has been used on the "POCO" rolled wafer chocolate product but that product does not fall into the category of bars.

In cross-examination, when asked which of the products in the principal brochure were choc-coated, Mr Salera said they included the Coco Mallow bars, the Strawberry Mallow Bunny bars, the Choco Mallows and the Poco rolled wafers which were sold to airlines and McDonalds. He said that this latter product was made as a bar line but no depiction as a bar line was produced in evidence.

There was some dispute as to the date or period of time during which the principal brochure relied upon by the applicant had been current. It was originally propounded as showing the applicant's complete product range but not by reference to any particular date. The brochure bore the name of the applicant's agents Ausfine Foods International Pty Ltd and Mr Salera said that they had not used Ausfine Foods International Pty Ltd for five years. The Thomastown address on the brochure was also said by Mr Salera to be the incorrect address but Ms Timms the applicant's national sales manager retail said that when she came to work for the applicant in September 1995 the premises were at Thomastown and it was one week after she commenced with the applicant that it moved premises Broadmeadows. It therefore does not follow from the evidence that the principal brochure must have been at least five years old as Mr Salera contended. I am satisfied that the principal brochure was in use during the first half of 1995 and that it shows the manner in which the applicant packaged and displayed the proceedings identified in it during the first half of 1995. Mr Lyons submitted that there was no evidence which identified how the "Betta" mark had been used prior to February 1995.

The respondent produced what Mr Denehey described as a food service price list from the applicant dated July 1995. This list showed a number of cone products described by reference to the name "Betta", some of the snowball items were so described, none of the wafer items were so described and none of the confectionery items were so described. Some of the confectionery items were described by reference to the name "Windsor". Mr Salera could not say whether the price list was the applicant's price list or what the document was but he did say that all the products on the price list were the applicant's products. It bore a facsimile transmission mark bearing the name of the applicant. I find that the document referred to by Mr Denehey as the applicant's food service price list was the applicant's food service price list and emanated from the applicant.

Evidence of confusion

The applicant relied on a number of incidents of what it said was confusion between its products and the respondent's products. Mr Lyons objected to the admissibility of the evidence in relation to these incidents and submitted that they were not rendered admissible by the relevant provisions of the Evidence Act 1995 (Cth). He relied upon Vieright Pty Ltd v Myer Stores Limited (1995) ATPR |P41-405 at 40,486. The first incident was the telephone conversation between Mr Salera and Mr Tagisen in March 1995. The second incident involved Mr Swinden, the applicant's national and sales marketing director, who said that in the early part of 1996 he received a telephone call from John Staples the sales manager of Buspak Advertising Queensland which sells advertising on transit vehicles. Mr Staples told Mr Swinden that he wanted to contact Better Foods (the name was not spelled out in the conversation), the company he was working for to see about advertising a range of products in Western Australia. Mr Staples said he had seen advertising for Betta Fruit Bars advertised on a vehicle in another state and he asked Mr Swinden whether that was the company that he was working for and would there be an opportunity to do business in Western Australia. Mr Swinden told him the company had no connection with Betta Foods Australia Pty Ltd. Mr Denehey said that his company had never advertised Betta Fruit Bars on any transit vehicles such as trams and buses. On the basis of this evidence I cannot be satisfied as to the circumstances which generated the phone call and, even if the evidence was admissible, I would regard it as having little weight on an issue as to confusion. At the most Mr Staples had been caused to wonder whether what he had seen was the applicant's product because he asked whether the company advertising the product was the company for which Mr Swinden worked.

The third incident involved Karen Timms, the applicant's national sales manager retail, who said that prior to June 1996 Steve Wootten, the bulk confectionery buyer and assistant buyer at Coles Supermarkets, had telephoned her and asked her why they were out of stock of strawberry Betta Fruit bars. She explained to Mr Wootten that they were not the manufacturers of Betta Fruit bars and that ended the conversation. She also said that she had received an advertising claim from K Mart addressed to the applicant which referred to Betta Fruit bars and a credit claim from Grocery Holdings Pty Ltd (a subsidiary of Coles Myer Ltd) claiming a credit in respect of squashed cartons of apricot fruit bars. The credit note was addressed to Betta Fruit Bars (which Ms Timms only identified and did not say that she received it). Mr Wootten said that he telephoned Ms Timms, with whom he dealt as the account manager for the applicant, and from whom he bought confectionery, and asked her whether the applicant sold Betta Fruit bars. He had seen them on the shelves at one of Coles supermarkets. At the time of the telephone conversation his company was out of stock of one of the lines of Betta Fruit bars and he telephoned Ms Timms in the belief that the applicant supplied his company with the product that was out of stock. He has not been engaged in buying fruit bars.

The fourth incident involved Ms Fowler, a field sales manager with a food brokerage company which represents different companies in the food market industry. She said that part of her job was to call on supermarkets to make sure that distribution in the store was correct. She was walking down the confectionery aisle of a supermarket when she saw a bag of chunks of fruit which she called fruit leather. She picked it up and saw that the bag had a logo on it which was one of the companies which she represented. She looked at the address on the back which was not familiar to her and she purchased a couple of packets of the product so she could talk to her account manager about not letting her know that there was a new product that they were handling. She said she thought it was the applicant's product because of the logo, that is the "Betta" on the bag. She identified the logo as the same as the logo on one of the respondent's products which was in evidence.

Use of "Betta" name

The evidence placed before the Court satisfies me that from May 1984 the applicant has been manufacturing and wholesaling confectionery items including ice cream cones, wafer biscuits, chocolate-coated bars and marshmallow products. However the applicant has not packaged or sold all its products by reference to the name or mark "Betta" or by reference to the Betta logo. Indeed no name was displayed on the confectionery products which Mr Salera said were its chocolate bar products, namely Coco Mallow, Strawberry Mallow Bunny bar and Kick choc-coated wafer. Insofar as any name was applied to any of these products it was only applied by reference to trade material and even then only the name of "Windsor Confectionery" was used on the trade brochure for the Coco Mallow choc-coated marshmallow bars. The significance of this evidence is that it diminishes the extent to which the applicant can be said to have an established or distinctive reputation in the minds of consumers in relation to its products by reference to its name or mark "Betta".

Apart from Mr Salera's generalised statements about the use of the name "Betta", which were not supported by documentary evidence of the use of the name "Betta", there was no evidence of the use which had been made of the brochure prior to September 1995 or of the use of the name "Betta" in relation to confectionery products prior to February 1995. I am therefore not satisfied that there was at, or prior to, February 1995 any significant use by the applicant of the name "Betta" in relation to its confectionery products so far as members of the consuming public were concerned. To the extent to which there was any such use it related only to ice cream cones and snowballs. In any event the evidence in relation to chocolate-coated bars shows that there was no mark or name "Betta" displayed on the front of the packaging or display boxes of these products.

It is also apparent from the evidence produced by both sides that the name "Betta" has been used by many companies and firms in their trade and business name. The applicant produced an Australian Securities Commission extract which disclosed 104 company names with the name "Betta" in the title. The respondent also produced trade brochures for Monster Logs displaying the names "Betta Confectionery" and Australian Securities Commission searches which showed over 400 company and business names registered in Australia using the name "Betta". As Mr Lyons pointed out, a number of these companies contained names which suggested they carried on business in the provision of food stuffs. For example he referred to Betta Health Foods Pty Ltd, incorporated in Western Australia, Betta Pies Pty Ltd, incorporated in Tasmania, Betta Snax Pty Ltd, incorporated in New South Wales and also to a considerable number of companies and firms using the name "Better".

The evidence did not disclose that the respondent had ever used the name of "Betta" in isolation. Rather, in all the evidence before me the respondent's name was always set out as Betta Fruit Bars Pty Ltd and when the name was used in conjunction with the pictorial logo it was displayed as "Betta Fruit Bars".

Reputation of the applicant in the name "Betta"

Mr Marantelli, who appeared for the applicant, submitted that the applicant was the largest manufacturer of ice cream cones in the southern hemisphere and had used the mark "Betta" since the mid 1980s. He contended that the mark had been used in relation to confectionery items including choc-coated items but the evidence did not support the submission. In the course of argument he was pressed on a number of occasions to point to the evidence that the "Betta" mark had been applied to chocolate-coated items. He could only point to the two trade fliers or sheets for the Strawberry Mallow Bunny bars and the Coco Mallow marshmallow bars, neither of which bore or displayed the name "Betta" in their packaging. Counsel could not say that the "Betta" mark had become sufficiently distinctive of Bunny bars, Coco Mallow bars or Kick bars. Indeed the brochure which was used for trade sales displayed the name "Windsor Confectionery" in relation to the Coco Mallow bars. Although Mr Marantelli submitted that the "Betta" mark had, prior to the beginning of 1995, become sufficiently distinctive of the applicant's products such a conclusion is only applicable, on the evidence, to ice cream cones and snowballs but not to chocolate or choc-coated bars. Although Mr Marantelli submitted that the applicant had spent about $5,000,000.00 in the last ten years on advertising and promoting its mark and product profile in the market place there was little evidence, apart from the assertions of Mr Salera, to support this submission. Products were tendered in evidence which identified the "Betta" mark by reference to ice cream cones and snowballs but I was not shown any advertising or promotional material, apart from one brochure, which was said to relate to the period prior to February 1995. Mr Lyons challenged that that particular exhibit related to any particular period prior to February 1995 and there is no evidence as to the extent or period during which it was used. The evidence only enables me to find that it was in use at or around the beginning of 1995.

The applicant did not call any evidence from members of the public to the effect that the name or mark "Betta" was one which they associated with the applicant or with products whose source was the applicant. Perhaps that is not surprising because the applicant's chocolate bar products such as Coco Mallow bars, Strawberry Mallow Bunny bars and the Kick choc-coated wafers were not marketed or displayed to members of the public under, or by reference to, the name or mark "Betta" or any other name or mark. Further, other products such as the Monster Logs were marketed or displayed to members of the public under, and by reference to, the name "Windsor Confectionery" as were other products.

I therefore find that such reputation as the applicant had in early 1995 in relation to the name or mark "Betta" was limited to ice cream cones and snowballs. The evidence does not satisfy me that the applicant had in early 1995 acquired a reputation, substantial or otherwise, with members of the public, in relation to other confectionery products or that the name "Betta" distinguished or identified the applicant's confectionery products (other than ice cream cones and snowballs) in the mind of the consuming public.

In the case before me the evidence does not satisfy me that the applicant had given its confectionery products a distinctive character by reference to the mark "Betta" which has been accepted by the market. There was a paucity of evidence in this respect and such evidence as was placed before me discloses only the use of the name "Betta" in relation to ice cream cones and snowballs but not in relation to a number of confectionery items.

Having reviewed all the evidence I am satisfied and I find that the applicant did not use the name "Betta" exclusively on the packaging of all its products. In relation to some products it used the name "Windsor" and in relation to other products it bares no identifying name at all on the outer packaging. The evidence does not establish a good-will or reputation in the name "Betta" in relation to chocolate or choc-coated bars and there is limited evidence in relation to the use of "Betta" in relation to other items of confectionery. The evidence does not support the proposition that the name "Betta" when applied to confectionery products, and in particular chocolate coated bars, has come to be regarded by the public as distinctive of the applicant's goods. The applicant has not established a reputation in relation to confectionery products and in particular chocolate-coated bars under or by reference to the name.

Relevant legal principles

The applicant puts its case on the basis of common law passing off and misleading or deceptive conduct in breach of s 52 of the Trade Practices Act 1974 (Cth) ("the Act"). Although it has been said that the precise definition of the elements of the tort of passing off is elusive: Conagra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 33 FCR 302, 355 per Gummow J; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261, 268, the authorities show there is a need to establish reputation, misrepresentation and the likelihood of damage: Conagra Inc v McCain Foods (Aust) Pty Ltd (supra); Reckitt and Colman Products Limited v Borden Inc (1990) 17 IPR 1, 7; Vieright Pty Ltd v Myer Stores Limited (supra) 40,486. What is accepted as the authoritative statement of the necessary elements to establish the cause of action of passing off is found in the judgment of Lord Diplock in Erven Warnink Besloten Vennootschap v J Townend & Sons (Hull) Limited [1979] AC 731 (the Advocaat case) where at 742 his Lordship stated the five characteristics which needed to be present as:

"(1) a misrepresentation

(2) made by a trader in the course of trade

(3) to prospective customers of his or ultimate consumers of goods or services supplied by him

(4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and

(5) which causes actual damage to a business or goodwill of a trader by whom the action is brought or (in a quia timet action) will probably do so".

This statement has been accepted in Australia: Moorgate Tobacco Co Limited v Philip Morris Limited (No 2) [1984] HCA 73; (1984) 156 CLR 414, 443 - 444 per Deane J; Conagra Inc v McCain Foods (Aust) Pty Ltd (supra) 308 - 310. Although the law of passing off has been said to be capable of summary in one short general proposition - no man may pass of his goods as those of another: Reckitt and Colman Products v Barden Inc (supra) at 7, it is necessary as Lord Oliver said in that case, to establish three elements for passing off action - first goodwill or reputation attaching to the relevant goods in the mind of the purchasing public by association with the identifying get-up, such that the get-up is recognised by the public as distinctive specifically of the applicant's goods; secondly a misrepresentation leading, or likely to lead, the public to believe that the respondent's goods are the goods of the applicant or a particular source; thirdly the suffering, or likely suffering, of damage by reason of the erroneous belief engendered by the misrepresentation. As the Full Court observed in Vieright Pty Limited v Myer Stores Limited (supra) 40,493 those elements gave rise to three questions:

"(1) Has the applicant proved that the get-up under which its [confectionery products] have been sold since [1984] has become associated in the minds of substantial numbers of the purchasing public specifically and exclusively with the applicant's [confectionery products]?

(2) If the answer to that question is in the affirmative does the get-up under which the respondent markets its [fruit bars] amount to a representation by the respondent that the [fruit bar]s which it sells are the applicant's products?

(3) If the answer to that question is in the affirmative, is it, on a balance of probabilities, likely that, if the respondent is not restrained a substantial number of members of the public will be misled into purchasing the respondent's [fruit bars] in the belief that they are the applicant's [confectionery products]."

In Equity Access Pty Ltd v Westpac Banking Corporation [1989] FCA 506; (1989) 16 IPR 431 Hill J at 440 - 442 set out a number of propositions which applied in relation to the ingredients of a cause of action under s 52 of the Act. The propositions can be summarised as follows:

(a) for conduct to be misleading or deceptive conduct it must convey, in all the circumstances, a misrepresentation;

(b) there will be no contravention of s 52 unless the error or misconception which occurs results from the conduct of the corporation and not from other circumstances for which the corporation is not responsible;

(c) conduct will be likely to mislead or deceive if there is a "real or not remote chance or possibility" of misleading or deceiving regardless of whether it is less or more than 50%;

(d) conduct causing confusion or uncertainty in the sense that members of the public might have been caused to wonder whether the two products or services might have come from the same source is not necessarily co-extensive with misleading or deceptive conduct;

(e) the applicant must establish that it has acquired the relevant reputation in the name, that is that the name has become distinctive of the applicant's business or products.

The respondent has submitted that the term "Betta" is a descriptive term which is not capable of distinguishing the applicant's products in any way. The fact that a word is a descriptive term does not of itself mean that it cannot be used to distinguish a trader's products. The answer to that question depends upon the strength of the evidence. The issue was put succinctly by Burchett J in The Kettle Chip Co Pty Limited v Apand Pty Limited (formerly CCA Snack Foods Pty Limited) [1993] FCA 546; (1993) 46 FCR 152 at 165 - 166:

"Of course, the mere fact that a word is descriptive does not warrant a trader in using it if it has also acquired a secondary meaning so as to distinguish the products of a rival. As Lord Radcliffe said in de Cordova v Vick Chemical Co (1951) 68 RPC 103 at 106:

`To say that it is descriptive would not be enough for ... there is no absolute incompatibility between what is descriptive and what is distinctive. A distinctive word, such as `Sheen', can be recognised in law as distinctive of the evidence clearly shows that it is distinctive in fact.'

I cited a number of the authorities in LSK Microwave, and I shall not repeat the discussion which is set out there. Since a descriptive word may be distinctive, the contexts and circumstances of its use must be considered."

Mr Lyons submitted that the name "Betta" was inherently incapable of being exclusive or distinctive of any one trader because it was, in essence, a descriptive or laudatory word. He submitted that the evidence did not disclose that the name had acquired a secondary meaning unlike the circumstances in Reddaway v Banham [1896] AC 204.

Mr Lyons submitted that it is inevitable where a descriptive or laudatory name is selected that there will be some confusion but he submitted that the cause of the confusion is not the respondent's conduct but the applicant's choice of a descriptive or laudatory term. He relied upon a line of cases which establishes that, in such circumstances, if there is confusion in relation to a descriptive word, such confusion should be seen to arise as a result of an erroneous assumption rather than on the basis of a misrepresentation. Mr Lyons submitted that in any event where a descriptive or laudatory expression is used very small differences in a word or mark will avoid liability.

Whenever descriptive words are used in a name or mark it will require significant evidence to establish the relevant reputation. In Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (supra) at 269 the Full Court, adopted the following passage from the judgment of Hill J in Equity Access Pty Ltd v Westpac Banking Corporation (supra) at 445:

"Just as the distinction between descriptive and fancy names is not a distinction of law so too it is wrong to see the distinction in black and white terms. The reality is that there is a continuum with at the extremes purely descriptive names at the one end, completely invented names at the other and in between, names that contain ordinary English words that are in some way or other at least partly descriptive. The further along the continuum towards the fancy name one goes, the easier it will be for a plaintiff to establish that the words used are descriptive of the plaintiff's business. The closer along the continuum one moves towards a merely descriptive name the more a plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff (if the name admits of this - a purely descriptive name probably will not) and the easier it will be to see a small difference in names as adequate to avoid confusion."

The Full Court went on to observe that even descriptive words may become distinctive of a person's business but that issue is one of fact and in the case before the Full Court, the Court said that substantial evidence was necessary to establish the characterisation of distinctiveness. That was because of the descriptive words "Solar Tint" used by the applicant. The same position applies in this case.

The core issue confronting the applicant was the necessity to establish that notwithstanding the descriptive name it had chosen namely "Betta", it had nevertheless acquired a reputation by reference to that name. Although the word it has chosen is a corruption of the word "Better" I consider that it should be regarded as being descriptive unless, and until, it can be established that it has acquired a secondary meaning. I do not understand the applicant to claim a monopoly in the word "Betta". Indeed, it could not do so having regard to other uses of the same name and the nature of the word itself. As Stephen J pointed out in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216 at 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 distinct of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases 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 the small differences in the competitor's trade name will render the latter immune from action."

Stephen J adopted the statement of Lord Simonds in Office Cleaning Services Limited v Westminster Window and General Cleaners Limited (1946) 63 RPC 39 at 42 where he said the possibility of blunders by members of the public will always be present when names consist of descriptive words:

"So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be".

The problem which arises when a descriptive name is used is that a risk of confusion must be accepted as otherwise the person who uses the descriptive word is given "an unfair monopoly in those words": Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (supra) 229. In such circumstances any confusion or deception which might arise is not because the name itself is misleading but because there has been an intrusion into the descriptive area occupied by another company: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd(supra) 230.

These observations by Stephen J in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd were adopted by the Privy Council in Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd (1980) 2 NSWLR 851 at 857. The Privy Council emphasised that it was necessary for the plaintiff to prove that it had built up an "intangible property right" in the advertised descriptions of its products and had given its products a distinctive character accepted by the market.

It is important to remember the balance, identified by the Privy Council in Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd (supra) at 863, which is to be maintained between protection of the applicant's investment in its product and the protection of free competition. As Lord Scarman said at 863:

"It is only if a plaintiff can establish that a defendant has invaded his 'intangible property right' in his product by misappropriating descriptions which have become recognised by the market as distinctive of the product that the law will permit competition to be restricted. Any other approach would encourage monopoly".

Was there a misrepresentation?

Mr Lyons submitted that there was no misrepresentation by the respondent by the use of its name or logo because the applicant had not established that it had a distinctive and exclusive representation in the word "Betta". He submitted further that there was no evidence to support the proposition that the applicant's name or mark "Betta" had acquired a secondary meaning as denoting specifically and exclusively the applicant or its relevant product.

Mr Marantelli submitted that there was a misrepresentation made to prospective customers of the applicant and the ultimate consumers of its products which was constituted by:

(a) the respondent using the word "Betta" in the naming, labelling and packaging of its product range;

(b) similarities between the applicant's and respondent's products such as packaging logo and physical appearance, the key element being the association of the mark "Betta" food stuffs;

(c) both parties operated in the same field of activity namely confectionery;

(d) both parties' products were sold to retailers and then ultimate consumers;

(e) the ingredients of the applicant's and the respondent's products were different as no one would expect the manufacturer to make two identical products.

The difficulty facing the applicant in this submission was that the evidence did not support the representation relied upon by the applicant. The respondent always uses the name "Betta" in conjunction with the words "Fruit Bars" so that customers see the respondent and its products as Betta Fruit Bars and Betta Fruit Bars Pty Ltd. This is in contradistinction to the manner in which the applicant packages displays and sells its products, sometimes without any reference to any name and on other occasions by reference to the name "Windsor". It seems to me that by packaging its products as "Betta Fruit Bars" the respondent is describing its product and not stating or claiming it is a product emanating from the applicant. The applicant does not seek to package all of its products in such a way as to identify them to consumers as "Betta" products and the similarities sought to be relied upon by the applicant do not in fact exist. The logos used are quite different in terms of their get up or trade dress, the packaging is quite different and there is no similar physical appearance of any in the products. It is not necessary to have a common field of activity between applicant and respondent before passing-off or misleading or deceptive conduct can be established but the extent to which there is or is not a common field of activity is relevant in determining the likelihood of damage and the likelihood of deception.

It is also relevant in my view that the name "Betta" and "Better" are used by hundreds of companies and firms in Australia. This fact supports Mr Lyons' submission that the mark "Betta" is to be regarded as descriptive or laudatory and in such circumstances small changes between marks or names using the word "Betta" will be sufficient to negate any suggestion of misrepresentation.

Mr Denehey, the respondent's managing director, may have had vague knowledge of the applicant prior to the respondent entering into the market but there was no evidence before me upon which I could infer that there had been an intention by the respondent to use or ride on the applicant's good name. Indeed, the evidence to which I have referred was to the contrary and was not shown in cross-examination to be improbable.

I am satisfied that the respondent has not made a misrepresentation to prospective customers by the use of its name or logo. The form and structure of the respondent's logo is significantly different from the logo of the applicant.

Were people misled?

It is in the forefront of the applicant's submissions that people in the trade had been misled into thinking that the respondent's goods were those of the applicant, or in some way connected with them, and I was invited to infer that consumers had also been misled. The applicant relied upon the evidence of Ms Fowler, Mr Wootten, Ms Timms, Mr Swinden, an adjustment note received from Safeway, a credit claim received from K Mart and a credit claim sent by Grocery Holdings Pty Ltd. Evidence from persons that they have been misled by the use of the relevant name may be relevant in a case such as this but such evidence does not necessarily conclude the matter: Vieright Pty Limited v Myer Stores Limited (supra) Mr Lyons submitted that the evidence relied upon by the applicant was not admissible and did not fall within any of the exceptions to the hearsay rule in the Evidence Act. He relied upon Vieright Pty Limited v Myer Stores Limited (supra). I do not consider that the evidence relied upon by the applicant does in fact establish that the people in the trade who gave evidence were in fact misled but to the extent that it did, it does not follow that they were entitled, as a matter of objective fact to conclude that there was a connection or association between the respondent's products and the applicant. The conversation between Mr Salera and Mr Tagisen is equivocal as to what had gone through Mr Tagisen's mind and one can only speculate as to what had motivated Mr Tagisen to make the telephone call.

Mr Staples' conversation with Mr Swinden was one in which Mr Staples asked Mr Swinden whether the Betta Fruit Bars company was the company for which he was working. At best there was confusion or a cause to wonder but not a circumstance in which Mr Staples was misled. Mr Wootten's conversation with Ms Timms falls into the same category as he telephoned Ms Timms and asked her "whether the company Betta Foods sold Betta Fruit Bars". Ms Fowler's evidence is the closest one gets to a person being misled but she was, in her mind, particularly thinking of the applicant and its products because of her business proceeded on the basis of an assumption which was not justified. She assumed that Betta Fruit Bars' logo was the logo of the applicant. She said she knew the logo but in fact what she meant was that she knew the name "Betta". In my view the conclusion she reached was coloured by the nature of her employment and is of little assistance in considering the impact of the respondent's logo on consumers generally. It is ultimately a question for the Court whether the relevant conduct constitutes a misrepresentation or misleading or deceptive conduct and although evidence that some person has in fact formed an erroneous view is admissible, it is not essential or conclusive (McDonald's System of Australia Pty Ltd v McWilliam's Wines Pty Ltd (1980) 28 ALR 394; Taco Company of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177, 202).

The two credit claims from the supermarkets are equivocal and I can draw no conclusion from them in the absence of knowing the circumstances under which they were sent.

Notwithstanding Mr Lyon's submission that the applicant's evidence of actual deception was inadmissible I consider that it is admissible so far as Ms Fowler and Mr Wootten are concerned because it is evidence of their state of mind as to the distinctiveness of the applicant's name or mark in relation to its products: Vieright Pty Ltd v Myer Stores Limited (supra) at 40,494. Otherwise I regard the remaining evidence as inadmissible as it is, in effect, relied upon to give hearsay evidence of the circumstances in which the other person was either confused or misled as to the source of the respondent's products.

If I am wrong in respect of any of this evidence, it does not affect the ultimate conclusion I have reached having regard to my finding that the respondent, by using its logo with the Betta Food Bars words, has not made any relevant misrepresentation.

Mr Marantelli submitted that it was not necessary for the applicant to produce evidence of consumers who were duped and that I was entitled to infer that such a situation had occurred because of the fact that people in the trade were misled. However there is no evidence of any consumer that he or she was misled by the use of the respondent's logo or name and there is insufficient evidence upon which I would be entitled to infer that such misleading was likely to occur. Mr Marantelli relied upon Global Sportsman Pty Ltd v Mirror Newspapers Limited [1984] FCA 180; (1984) 2 FCR 82, 87, Glorie v WA Chip & Pulp Co Pty Ltd [1981] FCA 224; (1981) 55 FLR 310, 321 and Happy Landings Pty Ltd v Magazine Promotions Australia Pty Ltd (1984) ATPR |P40-459 at 45,314 in support of the proposition that I should infer from the evidence that the consumers were duped. However, those cases do not assist the applicant in the circumstances of this case. Although they establish that evidence of erroneous conclusions is admissible to establish that conduct was misleading or deceptive, they must be read in the light of the reasoning in McDonald's System of Australia Pty Ltd v McWilliam's Wines Pty Ltd (supra) and Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 that is to say, there is no breach of s 52 unless the misconception or error into which the consumer falls or is likely to fall, results from conduct of the respondent, that is from a misrepresentation. In the ultimate analysis it is for the Court to determine whether the alleged conduct is likely to mislead or deceive and whether there has been a misrepresentation. The Court is not bound to accept evidence of actual deception as conclusive of the issue.

Conclusion

It follows from what I have said that the respondent has not engaged in any conduct which is misleading or deceptive or likely to mislead or deceive. It has not been established that the name "Betta" is distinctive in the minds of the public in relation to and as identifying the applicant's confectionery products, in particular its chocolate-coated bars. There has been no misrepresentation by the respondent and the cases to which Mr Marantelli referred (Paragon Shoes Pty Ltd v Paragini Distributors (NSW) Pty Ltd (1988) ATPR |P40-919; George Laurens (WA) Pty Ltd v Laurens & Co Australia Pty Ltd (1994) ATPR |P41-329; Targetts Pty Ltd v Target Australia Pty Ltd (1993) ATPR |P41-231; Mips Computer Systems Inc v Mips Computer Resources Pty Ltd (1990) ATPR |P41-050 and The Kettle Chip Co Pty Limited v Apand Pty Limited (formerly CCA Snack Foods Pty Limited) (supra) are particular examples of particular fact situations where injunctions were granted. None of those cases assist the applicant in the present case. Ultimately I am not satisfied there is any likelihood of deception and there is no evidence of any loss or damage either suffered or which is likely to be suffered by the applicant. The applicant submitted that loss and damage was presumed at common law once passing off was proved and that equity required the establishment of either damage or the probability of damage (Radio Corporation Pty Ltd v Henderson (1960) NSWR 279, 283 - 284). On the evidence before me, especially having regard to the nature of the products manufactured by both parties and the lack of evidence of the applicant's use of the name "Betta" in relation to confectionery products and, in particular, chocolate-coated bars, I do not consider that the applicant has established any probability of harm even if the relevant misrepresentation in passing off had been established. In short, as there was no evidence of actual damage, any claim under s 82 of the Act must fail and in my view there is no evidence of any tangible evidence so that the passing off claim must fail (Erven Warnink Besloten Vennootschap v J Townend & Sons (Hull) Limited (supra) at 742).

I am not satisfied, and the evidence does not support, the proposition that the name "Betta" has become associated in the minds of substantial numbers of the purchasing public specifically and exclusively with the applicant's confectionery products. As I noted earlier the respondent's logo and name does not amount to a representation by the respondent that its products are the products of the applicant.

The application will be dismissed with costs.

I certify that this and the preceding twenty-one (21) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg

Associate:

Dated: 23 March 1998

Counsel for the Applicant:	Mr S E Marantelli
Solicitor for the Applicant:	McDonald & Associates
Counsel for the Respondent:	Mr J F Lyons QC and Ms G Schoff
Solicitor for the Respondent:	Minter Ellison
Date of Hearing:	11, 12, 13 March 1997
Date of Judgment:	23 March 1998