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Federal Court of Australia |
Last Updated: 13 January 2005
FEDERAL COURT OF AUSTRALIA
Pacific Publications Pty Ltd v IPC Media Pty Ltd [2003] FCA 104
TRADE MARKS – whether respondent’s mark is
deceptively similar to applicant’s mark – question of fact and
matter of impression
– whether expert evidence is admissible on such
matters of impression – weight to be given to such evidence –
unusual
syntax in applicant’s mark an essential part of that mark’s
capacity to distinguish the applicant’s goods –
respondent’s
mark lacking that unusual syntax not deceptively similar.
TRADE
PRACTICES – Trade Practices Act 1975 (Cth) – s 53 claim
subsumed in s 52 claim – the Court must consider the whole of the
respondent’s conduct
– respondent’s conduct, considered as a
whole, likely to mislead or deceive consumers.
Trade Marks Act
1995 (Cth)
Trade Practices Act 1974 (Cth) ss 52,
53
Anheuser-Busch Inc v Budejovicky Budvar (2002) AIPC 91 –
789 applied
Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51;
(1937) 58 CLR 641 applied
Berlei Hestia Industries Ltd v Bali Co Inc [1973] HCA 43;
(1973) 129 CLR 353 applied
Campomar Sociedad, Limitada v Nike
International Ltd [2000] HCA 12; (2000) 202 CLR 45 cited
Coca-Cola Co v All-Fect
Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107 cited
de Cordova v Vick Chemical
Co (1951) 68 RPC 103 cited
MID Sydney Pty Limited v Australian Tourism
Co Ltd (1998) 90 FCR 236 cited
Parker-Knoll Ltd v Knoll International
Ltd [1961] RPC 346 cited
Pianotist Company’s Application
(1906) 23 RPC 774 cited
Shell Co of Australia Ltd v Esso Standard Oil
(Australia) Ltd [1961] HCA 75; (1963) 109 CLR 407 applied
S & I Publishing Pty
Ltd v Australian Surf Life Saver Pty Ltd (1998) 88 FCR 354
cited
Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1953] HCA 73;
(1954) 91 CLR 592 cited
Taco Company of Australia Inc v Taco Bell Pty Ltd
(1982) 42 ALR 177 cited
Wingate Marketing Pty Ltd v Levi Strauss &
Co (1994) 49 FCR 89 cited
PACIFIC PUBLICATIONS PTY
LIMITED v IPC MEDIA PTY LIMITED
NO. N 1277 OF
2002
BEAUMONT J
24 FEBRUARY
2003
SYDNEY
|
PACIFIC PUBLICATIONS PTY LIMITED
APPLICANT |
|
|
AND:
|
IPC MEDIA PTY LIMITED
RESPONDENT |
|
DATE OF ORDER:
|
|
|
WHERE MADE:
|
THE COURT ORDERS THAT:
1. Dismiss the applicant’s claims for trade mark infringements.
2. Declare that the respondent’s conduct in publishing its November 2002 ("Summer 2002/3") edition of "25 BEAUTIFUL HOMES" contravened s 52 of the Trade Practices Act 1974 (Cth). Reserve liberty to the applicant to apply for further relief in this connection (including any claim for injunction, damages or loss of profits) on such notice (if any) as a Judge of the Court may allow.
3. No order for costs.
Note: Settlement and
entry of orders is dealt with in Order 36 of the Federal Court Rules.
INDEX
Trade Mark No. 74894336
Trade Mark No. 38028344
REASONS FOR JUDGMENT
BEAUMONT J:
1 This is a claim by Pacific Publications Pty Limited ("the applicant") made against IPC Media Pty Limited ("the respondent") in proceedings in tort for passing off, for breaches of ss 52 and 53 of the Trade Practices Act 1974 (Cth) ("the TPA"), and for breaches of ss 120(1) and (2) of the Trade Marks Act 1995 (Cth) ("the TMA") seeking the following final relief:
• An injunction restraining the respondent from using in Australia each of the applicant’s registered trade marks No. 380283 ("HOME BEAUTIFUL/Australian HOME BEAUTIFUL") and No. 748943 ("HOME BEAUTIFUL") or any substantially identical, or deceptively similar, mark in relation to the applicant’s marks; and specifically restraining the respondent from using the name "25 BEAUTIFUL HOMES" in relation to any Australian editions of magazines.
• An injunction restraining the respondent from publishing (etc.) in trade or commerce any Australian edition of a magazine entitled "25 BEAUTIFUL HOMES", or whose title includes any combination of the words "BEAUTIFUL" or "HOME", or any plural, shortened or derivative forms of "BEAUTIFUL" or "HOME"; or whose title is substantially identical with, or deceptively similar to, the title "HOME BEAUTIFUL".
• An injunction restraining the respondent from representing in trade or commerce that its magazine is the applicant’s magazine; that its magazine is made by the applicant, or with its licence, sponsorship or approval, or has some other association with the applicant; or that its magazine is a compilation of the "best of", or a selection from, the applicant’s "HOME BEAUTIFUL" magazines over a particular period.
• Other, consequential, relief.
2 The applicant has stated its claim essentially as follows:
The applicant publishes the magazine "HOME BEAUTIFUL" throughout Australia. "HOME BEAUTIFUL" was launched in 1925 and, since then, has been continuously published in Australia. The applicant has owned the exclusive publication rights to "HOME BEAUTIFUL" since 1986 and has, since then, published "HOME BEAUTIFUL" continuously as a monthly magazine having as its principal subject the decoration, design or renovation of homes, with a circulation of about 80,000 copies per edition, achieving a large sales revenue, and a substantial advertising revenue, which is promoted and marketed to consumers with high disposable incomes. (As an example of its format, the magazine’s cover page of the December 2002 issue is annexed to these reasons.)
Australian consumers are aware that it is common practice in the publishing industry to publish "compilations", or "best of", magazines, containing selections of articles and pieces from a particular title over a particular period of time.
The applicant has acquired a substantial and valuable reputation and goodwill attached to its magazine "HOME BEAUTIFUL".
Further, the respondent’s proposed publication (etc.) in Australia of an Australian magazine under the name "25 BEAUTIFUL HOMES"; or any name including any combination of the words "BEAUTIFUL" and "HOME" (including any plural, shortened or derivative version thereof; or any name substantially identical with, or deceptively similar to, the name "HOME BEAUTIFUL") will signify, or is likely to signify, to any consumers that the magazine is the applicant’s "HOME BEAUTIFUL" magazine; or is a magazine published by the applicant or with its licence (etc.); or is a compilation (etc.).
The respondent’s title "25 BEAUTIFUL HOMES" is substantially identical with, or deceptively similar to, the applicant’s title "HOME BEAUTIFUL"; and the respondent’s conduct, accordingly, constitutes a passing off of its magazine, or a threat to do so.
The claim of contravention of the TPA
The respondent’s conduct is, accordingly, misleading or deceptive, or likely to be so, and thus contravenes s 52 of the TPA.
Further, the respondent has represented that its goods have sponsorship or approval they do not have, in contravention of s 53(c) of the TPA; and has represented that it has a sponsorship, approval or affiliation it does not have, in contravention of s 53(d) of the TPA.
The trade marks infringement claims
The respondent uses, or proposes to use, its sign "25 BEAUTIFUL HOMES", which so nearly resembles either or both of the applicant’s trade marks that it is likely to deceive or cause confusion; that is, the respondent’s sign is substantially identical with, or deceptively similar to, either or both of the applicant’s trade marks. The respondent’s magazines are goods in respect of which the applicant’s trade marks are registered; or are goods of the same description as that of the goods in respect of which the applicant’s trade marks are registered within the meaning of the provisions of s 120(1) and (2) of the TMA respectively defining when a mark is infringed.
PARTICULARS OF THE TRADE MARKS REGISTRATION
3 This registration is of the following series of trade marks in Part A in respect of printed matter; newspapers and periodicals (in Class No. 16) –
4 The period of registration was seven years from 26 August 1982. The provisions of s 24(2) of the Trade Marks Act 1955 (Cth), requiring evidence of distinctiveness, were applied. Registration was expressed to "give no right to the exclusive use of the words "beautiful" and "Australian".
5 This is a registration of the trade mark "HOME BEAUTIFUL" for ten years commencing 18 November 1997 for, inter alia, books, magazines and printed matter (in Class 16). The provisions of s 41(5) of the TMA, applicable where the Registrar finds that the trade mark is to some extent inherently adapted to distinguish goods from the goods of others but is unable to decide, on that basis alone, that the mark is capable of so distinguishing the designated goods, were applied.
6 In its Defence the respondent denies liability in respect of each of the causes of action sued on. No special defence is pleaded. However, the respondent does make these admissions:
• The applicant’s magazine entitled "AUSTRALIAN HOME BEAUTIFUL" is "one of [its] leading magazines".
• This magazine currently has a total combined circulation of about 80,000 copies per edition in Australia, New Zealand and other countries; is marketed to consumers, some of whom have high disposable incomes; and has, as one of its subjects, the decoration, design or renovation of homes.
7 The applicant’s evidence, given by its Chief Executive Officer, Ian Fraser Meikle, and by a marketing consultant, Grahame Robert Dowling, was essentially to the following effect:
The evidence of Ian Fraser Meikle
8 In affidavit sworn 2 December 2002, Mr Meikle gave evidence explaining the background facts, which, so far as concerns the primary facts, are not in dispute, as follows:
• The applicant’s circulation is such that it is Australia’s second largest magazine publisher. "HOME BEAUTIFUL" is one of its leading magazine titles, having a monthly circulation of about 80,000 copies per issue and a current cover price of $5.90, GST included. Advertising revenue accounts for about one-half of the total revenue received from its publication. The magazine is a significant participant in the homemaker’s magazine market.
• "HOME BEAUTIFUL" is marketed to readers with above average disposable incomes who are interested in decorating, designing or renovating their houses.
• The magazine’s circulation, advertising revenue and longevity are such that its title "has become exclusively distinctive" within the Australian market; and it has acquired, over the past seventy-seven years, "a substantial reputation and goodwill throughout Australia".
• By reading an advertisement in a trade journal in November 2002, Mr Meikle learned that the respondent proposed to launch an Australian edition of a magazine entitled "25 BEAUTIFUL HOMES". (A copy of the advertisement is annexed to these reasons.
• On 25 November 2002, Mr Meikle was informed by the respondent that it had been importing into, and circulating within, Australia copies of the British version of "25 BEAUTIFUL HOMES", which was published primarily to the British market. Because import distribution costs are generally quite high, imported magazines tend to have a small circulation, and the applicant is prepared to "tolerate" limited import sales of this British version. Nonetheless, the launch of a "fully fledged" Australian version of "25 BEAUTIFUL HOMES" is "a matter of grave concern" to the applicant because it is likely to have a much wider circulation than the foreign imported version.
• Mr Meikle believes that "the class" of persons who read "HOME BEAUTIFUL" is "basically the same" as those who would read "25 BEAUTIFUL HOMES". It is common practice in the publishing industry, in order to "trade on" the reputation previously established by particular titles, to publish "one-shots", a compilation or "best of" style magazine, which "repurpose" or "re-package" the content of the magazine from which they are derived. Mr Meikle believes that "25 BEAUTIFUL HOMES" would be mistaken by readers of "HOME BEAUTIFUL" for a magazine incorporating twenty-five homes featured in previous issues of "HOME BEAUTIFUL".
9 By his affidavit sworn 4 December 2002, Mr Meikle gave this evidence:
• In November 2000, the applicant published a seventy-fifth anniversary birthday issue of "HOME BEAUTIFUL". A copy of its front page is annexed to these reasons. This issue is an example of the "best of" or "compilation" style of magazine.
• In all of its advertising, the applicant refers to "HOME BEAUTIFUL", and not to "AUSTRALIAN HOME BEAUTIFUL". The projected amount of expenditure by the applicant on its advertising in this financial year is about $500,000, a figure "consistent" with amounts spent in previous years.
• The publication of "HOME BEAUTIFUL" by the applicant and its predecessors in title has been "continuous" since 1925.
10 By a further affidavit, sworn 9 December 2002, Mr Meikle gave this evidence:
• The inaugural issue of "25 BEAUTIFUL HOMES" was published on 4 December 2002. (A copy of the cover page is annexed to these reasons). This issue contained twenty-five "picture spreads" or "stories", that is, a "feature segment" on a particular topic (here a particular home), made up of photographs and text, usually with a headline or "name". In his opinion, in a magazine like "HOME BEAUTIFUL", the photographs are a "creatively essential element" and are given "displayed prominence" over the presence of the text, given that the subject matter, home decorating, renovating (etc.) is "highly visual". The photographs featured in 20 per cent of the respondent’s inaugural "spreads" are "exactly the same" photographs as those featured by the applicant in its "spreads" in recent issues of "HOME BEAUTIFUL".
• "Readership" (as well as circulation) figures are important in his view, in identifying a magazine’s market penetration. Readership is larger than circulation figures, reflecting "pass on" or "multiple-reader" characteristics. Readership is sometimes indicated by variables such as responses to competitions run in a magazine, subscription drives and trials for the reformatting of a magazine. Research by Roy Morgan Research Pty Limited in respect of the period 1984 – 2002, indicates that "HOME BEAUTIFUL" readership figures range between 213,000 to 1,057,000 per issue.
11 In cross-examination, Mr Meikle’s attention was drawn to the "particular logo type" scheduled to the certificate of registration of trade mark A 380283. Mr Meikle agreed that this "typeface" is not the "current masthead".
12 When asked about any other magazines "in this segment" which were "tolerated" by the applicant, Mr Meikle mentioned an American, and an English, version of "HOUSE BEAUTIFUL". Of the "tolerated" publications, Mr Meikle said that there are "dozens of small niche players that sell maybe 2,000 copies across Australia. ... They come and they go. They don’t audit in Australia. They are not particularly in our radar. They don’t compete for advertising. They are highly specialist and they appeal to different niches in the market than [those] we are directly involved in".
13 Mr Meikle agreed that in its advertisements of "HOME BEAUTIFUL", the applicant displayed the "masthead" (the "essence of the cover") of the magazine.
The evidence of Professor G R Dowling
14 Professor Dowling gave opinion evidence, which was admitted subject to the respondent’s objection, and thus subject to its relevance being established (to which I shall return), as follows:
• Consumers "buy – and may form relationships with – brands rather than products per se". Brands provide a "shorthand" device or means to help simplify consumers’ product choice decisions. Consumers form associations between the names, logo and/or other branding elements of a brand on the one hand and, on the other, both tangible (e.g. product type) and intangible attributes of the brand.
• Brand recognition-based choice occurs for many people in many low-risk, low involvement, impulse consumer purchase situations, such as the purchase of a magazine. In a narrowly defined product category (like homemaker magazines) where a consumer buys on impulse, and many of the brands have similar names, there is the potential for the consumer to confuse brands with similar names – either by their inability to recall correctly a brand name prior to purchase, or to recognise it at the point of purchase. A new brand entering such a market might well capitalise on this situation by using a name that looks and/or sounds like a more established brand (a tactic of "false recognition").
• Brand extension (of either the line extension or the category extension type) is common, and are now familiar to consumers. In the music and publishing industries, one type of line extension is to create a "best of", or other form of compilation of, an artist’s or author’s previous works.
• Contemporary marketing practice is based on the central idea of offering different groups (segments) of customers a different "offer", as a blend of the product, price, promotion and sale location, depending on a combination of demographic, behavioural, and situational factors.
• Based on the circulation and readership figures, the applicant has established a "market-leading brand" in the Australian homemaker magazines market, namely "HOME BEAUTIFUL". This brand has developed a "very considerable reputation" ("brand equity") with Australian consumers, as the likely result of "a combination of a distinctive ‘banner’ title or masthead, extensive promotion, wide retail distribution, long-term sales and word-of-mouth effects".
• The "HOME BEAUTIFUL" brand is likely to be known and recognised by Australian consumers by reference to the following factors:
Its brand name "HOME BEAUTIFUL" or, alternatively "AUSTRALIAN HOME BEAUTIFUL".
The positioning of this name in prominent typeface in the upper section of the front cover, one word beneath the other (i.e. "HOME" above, "BEAUTIFUL" below) with greatest [sic] prominence given to the word "HOME".
The typeface being a sans serif font, in lower case, stretched vertically, especially in the case of the word "HOME".
The entire background of the front cover being comprised of a different photograph of a contemporary home interior for each issue, such image being likely to convey an impression of an affluent home owner.
Availability in most newsagencies, merchandised with other homemaker’s magazines and sometimes given relative prominence within this category by being placed in the high-volume stacks near the front of the relevant store section as well as being placed at or near eye level in racks.
A current retail price in the vicinity of $5.90.
• Upon the assumptions that the "25 BEAUTIFUL HOMES" magazine was launched into the Australian market on 4 December 2002 and is being sold widely throughout Australia in newsagencies, a significant number of consumers will perceive it to have a similar overall brand identity to that just described in relation to "HOME BEAUTIFUL", namely:
Its brand name "25 BEAUTIFUL HOMES".
The position of this name in prominent typeface in the upper section of the front cover, one word beneath the other (i.e. "BEAUTIFUL" above, "HOMES" below) with greatest [sic] prominence given to the word "HOME" and the number "25".
The typeface being a sans serif font, in upper case.
The entire background of the front cover below the white band being comprised of a photograph of a contemporary home interior, such image being likely to convey an impression of an affluent home owner.
Availability in most newsagencies, being merchandised with other home-maker’s magazines and, because it is a new magazine, it may be given relative prominence within this category by being placed in the high-volume stacks near the front of the relevant store section.
A current retail price of $6.95.
• A significant number of consumers already familiar with the applicant’s brand "HOME BEAUTIFUL" are likely, if exposed to the "25 BEAUTIFUL HOMES" magazine in its current get-up, to believe it to be a magazine from the same source as "HOME BEAUTIFUL", since –
The choice and range of magazines promoted for sale in Australia, including homemaker magazines, is almost overwhelming today.
Magazine choice is mostly a self-service activity and the role of the newsagent in the choice process is minimal.
Faced with a wide choice of magazines in a self-service environment, many consumers inevitably attempt to simplify the processing of information and decision-making.
Such consumers tend to look for magazine brands that they know, and, in doing so, they scan the store shelves for visual cues by which they recognise such brands. In this mode, consumers: (a) respond to the overall form of, or impression created by, a magazine’s packaging; (b) make inferences about a magazine based on the overall form or impression, rather than actively considering all detailed elements of the publication – for example, few consumers would check the actual publisher of the magazine, information about which is generally in small print several pages into the magazine; and (c) do not attend closely to, and hence may not perceive, elements that might not exactly fit into the impression they might have previously formed.
• Many consumers in this category are known as "variety seekers", who look forward to reading and viewing the contents of homemaker magazines for the range of new or innovative ideas presented each month or periodically. In response to such variety-seeking behaviour, publishers strive to vary their magazines each issue, often adopting different foci, styles and particular subject matters. Such variation in magazines from edition to edition, in combination with variety-seeking behaviour on the part of the consumers, means that consumers are forced to rely substantially on brand name and banner style as cues to recognise the brand of magazine they seek. Given the diversity of competing magazines and significant variation in content of each edition for each of these magazines, consumers cannot rely on the vast majority of the cover page of a magazine if they are to be able to recognise the magazine they seek. Furthermore, with shelf displays of so many magazines often overlapping, consumers when approaching the shelf are often only able to see the top banner section of each magazine, reinforcing the central importance of this part of the front cover in the consumer recognition process.
• Accordingly, given the obvious similarity in name and title layout of the two magazines, a significant number of consumers who are making a rushed magazine purchase may mistakenly believe the "25 BEAUTIFUL HOMES" magazine to be one and the same as the "HOME BEAUTIFUL" magazine.
• Additionally, magazine publishers commonly release special issues under the magazine title or a variation of it. There are various formulations of this evident in the market, including:
Special one-off issues, sometimes called collector editions, including premium content drawn from previous issues often referred to as "best of" collections.
Special semi-regular issues, such as Christmas or summer editions.
Permanent titles related in name, known in marketing as brand extensions, such as the fashion magazine "VOGUE" and its home-maker relation "VOGUE LIVING".
• Newsagents and consumers are aware of, and have come to expect, these special editions or brand extensions of well-known magazine brands. As such, they have become accustomed to looking for, and interpreting, relationships between titles, whether implicit or explicit.
• For both the more discerning, and the rushed, homemaker magazine buyer who sees both magazines in the same section of the newsagency, the "25 BEAUTIFUL HOMES" magazine title is likely, for a significant number of consumers, to be interpreted as a special edition of the "HOME BEAUTIFUL" magazine, possibly as a one-off "special", or "best of", edition of twenty-five of the best houses profiled in previous issues, or as a semi-regular seasonal or Christmas edition, whereby periodically a "best of" range will be profiled, assuming that the contents of "25 BEAUTIFUL HOMES" is similar, if not identical, to that of "HOME BEAUTIFUL".
• A range of different consumer segments and buying scenarios in which some consumers are particularly likely to be misled or deceived is indicated:
Where a significant proportion of readers read a copy of such magazines bought by other persons, and less frequently purchase magazines themselves, at which time they rely heavily on their memory of magazines previously read but not retained in their possession.
Where there is no opportunity for side-by-side comparison in a particular newsagency, or even where such opportunity exists but "clutter" at the shelf reduces the likelihood that consumers, particularly those in rapid purchase decision mode, will see the comparison
Where both the applicant’s magazine and the respondent’s are displayed in close proximity, increasing the likelihood of the consumer perceiving that the respondent’s magazine is a "best of" edition of applicant’s magazine.
Where consumers, particularly in the cases of newly released magazines such as the respondent’s, tend to "try before they buy" and leaf through such a new release, examining the contents; the content that is of the greatest significance is the display photographs of the "featured" homes and interiors; if the content they are perusing (of this nature in particular) is similar to that of the applicant’s past editions, or if similar or the same houses are featured, then the probability of confusion or error in assuming the two publications are of the same origin increases accordingly.
• This conclusion follows notwithstanding a number of differences present in the get-up of the "25 BEAUTIFUL HOMES" magazine, namely:
The use of the number "25" as a prefix, noting, however, the frequency with which numbers are displayed prominently on magazines in this category to indicate to prospective purchasers, or readers, the quantum of ideas or entries within the magazine. For example, the front cover of the April 2001 edition of "HOME BEAUTIFUL" boldly advertises "10 best ever colour combinations"; in the March 2002 issue there appeared on the front cover "101 kitchen & bathroom ideas"; in the April 2002 issue there appeared "218 homewares under $100"; and in the July 2001 issue it was "10 secret rules of decorating like a pro".
The reversal of the words "BEAUTIFUL HOMES" from "HOME BEAUTIFUL", with the effect that the respondent’s version is more descriptive and generic, whereas the applicant’s version is unusual and distinctive due to its reversed form, somewhat reminiscent of a poetic syntax.
The font used for the names differs, and is in upper case in the respondent’s magazine.
The use of a white solid background behind the magazine title in the respondent’s magazine.
A slightly higher price, although not so high as to place it in line with most imported magazines or collectors’ edition, noting in any event that an examination of the retail prices of such publications varies widely, and of itself is not a reliable guide in associating a given brand to a relatively fixed price.
Slightly different physical dimensions, being slightly larger page width and height in the respondent’s magazine.
• Any effect of these differences, in terms of the ability of consumers firstly to attend to, and secondly perceive, them, is more than outweighed by the substantial similarity of the brand names, and the overall impression of similarity. This is particularly so because of the important role that brand names play in the homemaker magazine market, and the relatively lesser importance of other features on the front cover within this market. This must also be seen in the long-term context. The words "HOME BEAUTIFUL", when used in connection with interior or homemaker magazines, and through extensive promotion and usage since the launch of the publication in 1925, have become associated with the applicant’s magazine. Against this backdrop of the applicant’s brand, the question to ask is whether the respondent has employed any element or combination of elements on its front cover which would signal to consumers that its magazine is not related in some way to the applicant’s magazine, but rather is separate. The answer for many potential consumers to this question would be "no".
• Two magazines are imported on a small scale from the United Kingdom under the titles "25 BEAUTIFUL HOMES" and "25 BEAUTIFUL KITCHENS". Such titles are also likely to have confused a proportion of consumers, albeit on a smaller scale, given the limited distribution, foreign content and higher prices charged for such magazines. But, mainly because of the limited distribution of the imported magazines, the applicant’s "HOME BEAUTIFUL" brand has not been significantly eroded.
• Some other magazines sold in the Australian market use "similar" names to "HOME BEAUTIFUL". The expression "similar" is meant to identify the names listed below.
• A range of magazines titles contains variants of one of the words "HOME" or "BEAUTIFUL" in combination with other words, for instance:
"BEAUTIFUL KITCHENS AND BATHROOMS"
"BEAUTIFUL NEW HOMES"
"BETTER HOMES AND GARDENS"
"BUILD HOME"
"CALIFORNIA HOMES:"
"CONTEMPORARY HOME DESIGN"
"COUNTRY HOMES"
"GOOD HOME"
"HOME STYLE"
"HOMES OF GRANDEUR"
"HOUSE & HOME"
"IDEAL HOME"
"LUXURY HOME DESIGN"
"ROMANTIC HOMES"
"TOP HOME"
"TRADITIONAL HOME"
"UNIQUE HOMES"
"WOMAN & HOMES"
"YOUR HOME"
"25 BEAUTIFUL KITCHENS"
• In each of the above titles, only one of the words "HOME" or "BEAUTIFUL" or variants of these are used, but not both. The use of the two words in combination by the respondent gives rise to the likelihood of confusion in this case.
• It is notable that the names listed mostly use generic and descriptive words. Although an attempt is made to differentiate each magazine through the use of a different typeface layout of the name and overall layout on the front cover of the magazine, it is more likely that the name remains the primary basis on which many consumers attempt to identify the brand they seek. In such a situation, given the similarity of many of the names listed above, this makes it difficult for less vigilant consumers.
• There are several scenarios, or purchase situations, in which the similarities between the identifying elements of the "HOME BEAUTIFUL" and "25 BEAUTIFUL HOMES" get-ups can easily lead to consumer confusion, for instance:
A consumer who is peripherally aware of "HOME BEAUTIFUL" visits a general newsagency that carries "HOME BEAUTIFUL", then sees "25 BEAUTIFUL HOMES" in a setting – such as a stand-alone display – in which he or she is unable easily to compare the magazines and takes "25 BEAUTIFUL HOMES" believing it to be "HOME BEAUTIFUL".
A relatively uninvolved magazine buyer – like a great many consumers – who has read "HOME BEAUTIFUL" at some time in the past and who, operating with imperfect recollection, responds to the "25 BEAUTIFUL HOMES" get-up, and purchases "25 BEAUTIFUL HOMES", believing it to be "HOME BEAUTIFUL", or a brand extension of it.
A consumer who, seeing "HOME BEAUTIFUL" and "25 BEAUTIFUL HOMES" displayed side-by-side or in close proximity to one another on a newsagency shelf, purchases "25 BEAUTIFUL HOMES" in the mistaken belief that "25 BEAUTIFUL HOMES" is a product from the same source as "HOME BEAUTIFUL", namely a "one-off", or special, or "best of", edition.
• Assuming that a number of magazines now available to consumers via newsagencies are also similar in one or more respects to the applicant’s magazine, including packaging, content, price and distribution, there is a risk that some consumers being exposed to those magazines may also become confused in a similar fashion to that in the case of "25 BEAUTIFUL HOMES". However, these other magazines do not bear as close a resemblance to the applicant’s magazine as does "25 BEAUTIFUL HOMES". Furthermore, it is less likely that these magazines have established sufficient consumer reputation as to have significantly eroded the applicant’s distinctive position in the minds of a great many Australian magazine buyers.
15 As mentioned, Professor Dowling’s evidence was admitted subject to the respondent’s objection to its relevance, a question dealt with below in the course of considering my conclusions on the ultimate issues. Without prejudice to its objection, the respondent’s Counsel, Mr Yates SC, in the course of challenging Professor Dowling’s opinion of the likelihood of confusion here, cross-examined Professor Dowling as follows:
"MR YATES: There is no way of telling from your opinion is there whether it’s likely or how likely persons making a rushed magazine purchase may mistakenly believe 25 BEAUTIFUL HOMES to be AUSTRALIAN HOME BEAUTIFUL magazine?---Your Honour, could I be permitted to give a slightly more long winded answer to this one?
HIS HONOUR: Yes?---And it’s in the early part of the affidavit. One of the fundamental principles of modern marketing is there is no such thing as an average customer so marketeers look at the world in terms of different segments of consumers and when one accepts that that is no such thing as an average customer and different people react in different ways in different purchase environments then a statement of somebody, time poor in a rushed environment mistakenly believing one magazine is as another fits the theory 101. It’s as simple as that. One of the foundations of modern marketing is that we don’t make generalisations about all customers all of the time ... .
MR YATES: Yes?---Is just highlighting one of the principles in terms of the segmentation of markets. ... [C]ustomers in different purchase situations can react quite differently.
MR YATES: Well now there is no way of telling is there whether a person making a rushed purchase is acting reasonably in his or her own interests?---What do you mean by reasonably? There is a whole psychology which underlies that.
There is no way of knowing is there the factors weighing on a purchaser’s mind when that person makes a rushed purchase?---As I said your Honour, in this court room today, no, but given a budget and a survey, yes at a later point in time.
Such a person could be acting under a variety of levels of distraction?---Your Honour that is what I have been saying, yes, they can react under a variety of stimuli."
16 Later in his cross-examination, Professor Dowling was asked about his analysis of the "one-off" or "best of" phenomenon. He said that he had not carried out any empirical study himself, and was unaware of anybody else’s work in this area.
17 The respondent adduced the following evidence in affidavit form:
The evidence of Renae Beth Suttor
18 Ms Suttor, solicitor, said:
19 On 9 November 2002 she visited Borders book store in Sydney CBD and purchased a copy of the following:
"HOME BEAUTIFUL" (October 2002 edition);
"HOUSE BEAUTIFUL" (November 2002 edition);
"HOUSE BEAUTIFUL Kitchens/Baths" (Winter 2002 edition);
"HOUSE BEAUTIFUL HOUSE & PLANS" (Winter 2002 edition).
20 Each of these magazines had between one and three copies available for purchase. Copies of the magazines were located either on the same shelf, or on the shelves directly below and above copies of the applicant’s magazine, "AUSTRALIAN HOME BEAUTIFUL".
21 On 9 November 2002, she also visited The Daily Planet newsagency in Sydney CBD, and purchased a copy of the magazine "BEAUTIFUL HOME IDEAS". This magazine had between about one and three copies available for purchase, located in close proximity to copies of the applicant’s magazine, "AUSTRALIAN HOME BEAUTIFUL".
22 This evidence was not challenged.
The evidence of Lucinda Maree Mitchell
23 Ms Mitchell, the respondents’ Publisher, explained the background from the respondent’s perspective. Again, the primary facts are not controversial; however, as will be seen, the inferences to be drawn from them are in dispute. Ms Mitchell said:
24 In addition to the applicant’s "AUSTRALIAN HOME BEAUTIFUL" magazine, other titles in the homemaker magazine market currently on sale at Australian newsagents include: "HOUSE BEAUTIFUL", "INTERNATIONAL HOMES", "TOP HOMES", "CONTEMPORARY HOME DESIGN", "TRADITIONAL HOME", "AUSTRALIAN INTERIORS", "BETTER HOMES AND GARDENS", "AUSTRALIAN HOUSE & GARDEN", "HOMES & LIVING", "MILLIONAIRE HOMES", "HOME", "INSIDE OUT – INSPIRING HOMES CLEVER IDEAS", "COUNTRY HOMES & INTERIORS", "COUNTRY HOME IDEAS", "AUSTRALIAN COUNTRY THEMES", "AUSTRALIAN COUNTRY LOOKS", "AUSTRALIAN COUNTRY COLLECTIONS" and "AUSTRALIAN COUNTRY STYLE".
25 Homemaker magazines (of which the above listed magazines are typical) are generally sold at retail by newsagents, bookshops and, in some cases, supermarkets. Typically they are placed in a stand with the magazines grouped together according to subject matter. Homemaker magazines constitute a discrete subject matter. Customers have open access to the stand and are able, at their leisure, to pick up, examine, and browse through the magazine or magazines of interest to them.
26 IPC Media (UK), the respondent’s UK parent company, first published in the United Kingdom a magazine under the name "25 BEAUTIFUL HOMES" (the "UK Magazine") in 1998. The UK Magazine is based on the concept of featuring full photographic layouts or "tours" of twenty-five beautiful homes for readers to browse through, without being "instructional, trend-setting or informational". This format is "unique". Its title, "25 BEAUTIFUL HOMES", reflects the content of the magazine. "25 BEAUTIFUL HOMES" has also generated a number of "spin-off" magazines published and distributed in the UK, namely "25 BEAUTIFUL KITCHENS", "25 BEAUTIFUL GARDENS" and "25 BEAUTIFUL WEDDINGS".
27 By 2002, the UK Magazine ranked eighth out of the top fifteen women’s home interest magazines in the UK, based on average net circulation.
28 The respondent began importing and distributing the UK Magazine in Australia in July 2000. Approximately twenty-seven different editions of the monthly UK Magazine have been distributed in Australia, selling in "small but not insignificant" numbers without objection or complaint. Copies of "25 BEAUTIFUL KITCHENS" and "25 BEAUTIFUL WEDDINGS" have also been imported into and distributed in Australia.
29 In late 2001, the editor of "25 BEAUTIFUL HOMES" in the UK, Jane Parbury, approached Ms Mitchell with the idea of launching an Australian version of the UK Magazine. Following the acquisition of the respondent by Time Inc in March 2002, Ms Mitchell reviewed a range of UK titles that could be launched with local (Australian) content and made recommendations based on whether the launch was likely to be low, medium or high risk in terms of its launch, sales and profit success. Ms Mitchell formed the view that the "25 BEAUTIFUL HOMES" title fell within the low risk category, having regard to its immediate sales success in the UK, its profitability from the first issue, its "unique concept" which sets it apart from all other UK and Australian homemaker titles, and the fact that the title had been distributed successfully in Australia since July 2000. In mid 2002, a decision (in which Ms Mitchell participated) was made by the respondent to publish the title in Australia with local content and local advertising. At no time did the respondent consider any alternative to using the UK name, since using that name allows the respondent "to build on its existing reputation and goodwill in the UK title", which it has distributed in Australia over the last two years. The UK magazine’s title, logo and concept are "unique"; no other consumer magazine in Australia, whether or not a homemaker magazine, uses a number as a dominant part of its logo.
30 The advertisement in the trade journal mentioned in Mr Meikle’s first affidavit, showing a UK cover of "25 BEAUTIFUL HOMES" placed on the right of "AUSTRALIAN HOUSE & GARDEN", on the left of "AUSTRALIAN HOME BEAUTIFUL" and to the left of "VOGUE LIVING" and "BELLE", is "simply a ... representation to newsagents of where IPC is positioning the magazine within the overall home-maker market". "25 BEAUTIFUL HOMES" was "positioned" where it was in that order, in between "AUSTRALIAN HOUSE & GARDEN" and "AUSTRALIAN HOME BEAUTIFUL", because "the target readership" for "25 BEAUTIFUL HOMES" is "most similar" to that of "AUSTRALIAN HOUSE & GARDEN". That target readership consists of a higher number of what are known in the industry as "AB" readers, being "well-educated professionals with high incomes", than for "AUSTRALIAN HOME BEAUTIFUL", but there is a lower proportion of "AB" readers than in the case of "VOGUE LIVING" and "BELLE". The respondent’s target readership also consists of people who are less likely than the readers of "AUSTRALIAN HOME BEAUTIFUL" to do their own home renovations.
31 Ms Mitchell is not aware of any custom of "tolerance" of the kind mentioned by Mr Meikle. It is an individual decision, in her view, whether or not one "tolerates" a title in the market. A decisions to "tolerate" a title in the market would indicate that the particular publisher is relatively unconcerned about confusion between the "tolerable" title and its own title. Most publishers in Australia would be aware that an international publisher is more likely to launch a local version of a successful overseas publication, than to launch a completely new publication, and would rely on the overseas import title as proof of trading in defending trade mark rights. Most Australian publishers would consider the import of a magazine with a title they consider close to one of their own titles as a serious threat, and would act at the time the importation begins.
32 On 4 December 2002, the first Australian edition of "25 BEAUTIFUL HOMES" went on sale in 4,448 outlets – newsagents, Coles supermarkets, some independent supermarkets and selected book stores, around Australia.
33 There are a number of differences between the "AUSTRALIAN HOME BEAUTIFUL" logo and the "25 BEAUTIFUL HOMES" logo, in particular –
o The "AUSTRALIAN HOME BEAUTIFUL" logo is written entirely in lower-case lettering while the "25 BEAUTIFUL HOMES" logo is written entirely in upper-case lettering;
o The "AUSTRALIAN HOME BEAUTIFUL" logo uses a rounded font whilst the "25 BEAUTIFUL HOMES" logo uses a square font;
o The logo of "25 BEAUTIFUL HOMES" is set against a white background whilst that of "AUSTRALIAN HOME BEAUTIFUL" is set over the image on the front cover;
o The "AUSTRALIAN HOME BEAUTIFUL" logo, in placing the noun before the adjective, is grammatically incorrect, whilst the "25 BEAUTIFUL HOMES" logo is a phrase or statement describing the content of the publication;
o The "AUSTRALIAN HOME BEAUTIFUL" logo consists of one colour, whilst the "25 BEAUTIFUL HOMES" logo consists of two colours on a white background; and
o The height or size of the three words in the "AUSTRALIAN HOME BEAUTIFUL" logo varies considerably, with the word "HOME " dominating the logo, whereas the height or size of the words in the "25 BEAUTIFUL HOMES" logo are similar, and the numeral "25" dominates the words "BEAUTIFUL" and "HOMES" in the logo.
34 There are also a number of differences between the first Australian edition of "25 BEAUTIFUL HOMES" and "AUSTRALIAN HOME BEAUTIFUL", including these –
o The magazines have different "qualifying straps" (statement or phrases which are part of the masthead, but do not form part of the logo) along the tops of their covers.
o The "AUSTRALIAN HOME BEAUTIFUL" logo includes the words "since 1925" while "25 BEAUTIFUL HOMES" states that it is "new".
o The two magazines are of different sizes, both in width and height, with "25 BEAUTIFUL HOMES" being larger.
o The magazines have significantly different cover prices, "25 BEAUTIFUL HOMES" being $6.95 and "AUSTRALIAN HOME BEAUTIFUL" being $5.90.
35 Readers would not mistake "25 BEAUTIFUL HOMES" magazine as an "AUSTRALIAN HOME BEAUTIFUL" "one shot". "One shots" launched "off the back" of a parent title almost always (if not always) carry the parent title’s full name in the form of the parent’s logo.
36 Publishers repackage, and do "one shots", without damaging sales of the parent title. The applicant itself publishes "one shots". It simply does not make sense to suggest that the applicant does so in the belief that it is damaging the circulation or advertising revenue of its parent title "AUSTRALIAN HOME BEAUTIFUL". A magazine with an "unique" concept, such as "25 BEAUTIFUL HOMES", is more likely to grow the homemaker magazine market than to take sales from other publications.
37 There are four standard means by which a magazine editor secures photographs for each edition:
(1) An editor may commission photographs from a freelance photographer. In this case, the photographer is given a specific brief of what photographs are required. The editor or magazine will dictate what home is photographed, provide a stylist to "de-clutter" rooms, and pay for the film and any reproduction of the images. The end result is that the editor obtains photographs "tailor-made" for the particular edition of their magazine. However, unless the photographer signs a contract signing over all copyright or qualified copyright, the photographer retains all copyright in the photographs, and the magazine only has the right to reproduce the pictures in that edition.
(2) An editor may obtain photographs provided to the magazine by a photographer "on spec" – i.e. a "non-commissioned submission". In this case, the photographs are "off the rack" rather than "tailor-made". The photographer has already taken the photographs, and the magazine has no control over the subject or number of rooms photographed.
(3) An editor may obtain photographs from a photographer’s existing material or portfolio – i.e. "second reproduction rights" photographs. An editor will use this kind of "second-hand" material if the editor does not wish to commission photographs due to time constraints, or budget limitations, or does not feel that to reproduce photographs which have already appeared in other magazines would be detrimental.
(4) An editor may obtain photographs from a photographic library or syndication agency. The editor will usually contact the library and give them a brief of the type of pictures they want to publish. Based on this brief, the library will provide the editor with a selection of photographs, including photographs never published ("world exclusives"), photographs never published in the country in question and where no other photographers have similar photos ("exclusives"), pictures which have never been published in the country in question, but may be similar to other photographs ("first reproduction rights") or photographs that have been published in the country in question ("second reproduction rights").
38 It is not uncommon for a magazine to contain a number of "second reproduction rights" photographs. Moreover, in her opinion, no homemaker magazine has such an "unique" way of photographing homes that its photographs could be described as "unique" to that magazine. The photographs of existing homes in most homemaker magazines are very similar, as there is little difference "styling" can make to photographing an existing home. Also, magazines often accept photographs from photographers which are not specifically commissioned by a particular magazine and, therefore, may have been or in the future may be published in another magazine without that magazine’s knowledge.
39 Mr Meikle’s statement that 20 per cent of the respondent’s inaugural spreads or stories are exactly the same photographs as the applicant has featured in spreads or stories which it ran in recent issues of "HOME BEAUTIFUL" is disputed. A review of the photographs and "spreads" shows –
o In almost each case, the photo "spreads" in "25 BEAUTIFUL HOMES" magazine contain fewer photographs of each home than photo "spreads" of the same homes in "AUSTRALIAN HOME BEAUTIFUL" magazine.
o The photographs are "not ‘exactly the same’" – in many cases the shots and angles are different.
o The focus of each "spread" or story is different, and reflects the different concept behind each magazine; for example, "The Entertainers" spread in the add on to the December 2002 edition of "AUSTRALIAN HOME BEAUTIFUL" magazine focuses on the owners’ renovations, including several "before" and "after" shots, and the cost of renovating, whilst the "spread" in "25 BEAUTIFUL HOMES" magazine focuses on the house as it is now.
40 Not only is the use of "second reproduction rights" photographs common within the magazine industry, but the use by "25 BEAUTIFUL HOMES" of pictures of houses which had appeared in "AUSTRALIAN HOME BEAUTIFUL" is "entirely coincidental".
41 Ms Mitchell’s opinions were challenged in cross-examination by the applicant’s Counsel, Mr Douglas QC.
42 Ms Mitchell agreed that the magazine "HOUSE BEAUTIFUL" mentioned in her affidavit, is a northern hemisphere publication of "long standing"; and that "BEAUTIFUL NEW HOMES" and "BETTER HOMES & GARDENS" were related, North American, publications. She would not regard "BEAUTIFUL NEW HOMES" (which retails at $17.95) as a competitor of the Australian edition of "25 BEAUTIFUL HOMES" because the name is "quite different", although "all homemaker titles in the newsagents are competitors".
43 Ms Mitchell agreed that "readership wise", the Australian edition of "25 BEAUTIFUL HOMES" is "intended to appeal" to readers of "AUSTRALIAN HOUSE & GARDEN" and "AUSTRALIAN HOME BEAUTIFUL", being a "target audience", together, of hundreds of thousands, much more than the 2,000 (about) who took a copy of the UK edition of "25 BEAUTIFUL HOMES" every month.
44 Ms Mitchell knew that "AUSTRALIAN HOME BEAUTIFUL" was "often" referred to as "HOME BEAUTIFUL".
45 Ms Mitchell agreed that the editorial for the first Australian edition of "25 BEAUTIFUL HOMES" made no mention of any relationship with the UK version. She did not consider that question at the time.
46 The UK version, published originally as a "one shot", included "a lot of secondary use material".
47 Ms Mitchell agreed that the "stylisation" of the name of a magazine (the "design" of the "logo") is "important", and a conscious decision was made not to adopt the font of the UK version, because she felt that the "logo" was "old fashioned".
The evidence of Christine Mary Hayes
48 By her affidavit sworn 10 December 2002, Ms Hayes, a magazine editor employed by the respondent and the "launch editor" of "25 BEAUTIFUL HOMES", gave her version of the events leading up to the launch as follows:
49 In consultation with Ms Mitchell, Ms Hayes decided, in August 2002, that "the design and tone" of the magazine would be based on "the British version" which, she thought, would "work well" in Australia. They also decided that the number "25" would be "prominent" in the magazine "title logo", since they believed it to be "a unique selling point".
50 On 27 August 2002, (as editor of the respondent’s "BRIDE TO BE" magazine), Ms Hayes sent an email to Deborah Hunt (a freelance writer recommended by Jane Parbury, formerly editor of the UK magazine) stating –
"... We are thinking we may do a supplement on setting up home and ... would like to feature a number (5 – 10) Australian/NZ homes. I ... wondered if you might know the best way for us to source similar stories here ... ."
51 Ms Hunt replied by email stating –
"... If you are looking ... to use houses which have already appeared in an Australian or NZ publication, I know several photographers who regularly shoot houses for various magazines who could show you some material. You do sometimes have to be careful about some magazines ... , Vogue Living and House & Garden will not be happy for houses to appear somewhere else, even after they’ve been in their own magazine. A bit tricky, but easy to negotiate your way around when you know! Secondary usage will obviously work out cheaper ... ."
52 Ms Hayes responded by email dated 29 August 2002, stating –
"... We would be looking for the most effective option, so secondary usage pictures would be best. Do you think you could let me know a rough overall costing of using 5 homes, to include the photographers fee and your writing fee, assuming the copy was about the same length as those you have written for (the UK magazines) ... ."
53 Ms Hayes provided Ms Hunt with further information by email dated 16 September 2002 –
"...
Content and format
Basically, very similar to the UK version. Each home will be used over 3–6 pages, with around 8–10 shots showing several rooms/aspects in/of the house – with one main shot that can go full-bleed . ...
800–900 words copy similar style to the UK version (third person)."
54 By email sent to Ms Hunt on 30 September 2002, Ms Hayes confirmed –
"... the launch of 25 Beautiful Homes, an upmarket magazine on sale for three months from December. The target audience is affluent women aged 25–54 ... . Based on the successful UK version, it will feature inspirational Australian (and NZ) homes. Perfect-bound and glossy, each home is shown in full and focuses on the owner’s vision for their house and how they made it happen. There is no DIY content, just gorgeous glossy photographs. ..."
55 In cross-examination, Ms Hayes agreed that her first editorial for "25 BEAUTIFUL HOMES" made no reference to any association with the UK magazine.
56 Ms Hayes said that when she was appointed as "launch editor" she was not aware of "AUSTRALIAN HOME BEAUTIFUL", but had become aware of it by the time her magazine was published.
57 Ms Hayes agreed that, initially (i.e. in August 2002) the respondent’s management had perceived that its magazine "would correspond closely" with "AUSTRALIAN HOUSE & GARDEN" and "AUSTRALIAN HOME BEAUTIFUL", but by the time of the launch, management believed that the magazine "would be nearer a more upmarket target (for example) Vogue Living".
58 Ms Hayes agreed that the applicant’s magazine was referred to "in general" both as "HOME BEAUTIFUL" and "AUSTRALIAN HOME BEAUTIFUL".
59 Ms Hayes agreed that, in the "banner" for the UK magazine, the name appears in "serif" script, with ornamentation at the top and bottom of the numerals and letters, whereas the capitals used on the Australian version of "25 BEAUTIFUL HOMES" are sans serif, a "much cleaner form of print with no ornamentation".
60 She agreed that the respondent’s instructions to newsagents were to ensure that its magazine was as close to the applicant’s magazine as possible, but she denied that this was intended to suggest to customers that there may be some association between the magazines.
The evidence of Catherine Louise Muscat
61 By her affidavit affirmed 10 December 2002, Ms Muscat, freelance photographer, said that she took photographs of a house in Kambah, ACT in 2001 "on spec", that is, without being commissioned to do so. She showed the photographs to the management of the applicant who, for a fee, published them in the May 2002 issue of "AUSTRALIAN HOME BEAUTIFUL", and returned the negatives. In October 2002, Ms Muscat was approached by Ms Hunt and they agreed to publication of the photographs in "25 BEAUTIFUL HOMES". Ms Muscat has received no complaint from the applicant about this.
62 This evidence was not challenged.
The evidence of Lavinia Jeanne Strachan
63 By her affidavit sworn 10 December 2002, Ms Strachan, market researcher, gave the following evidence:
64 Ms Strachan agrees with Professor Dowling’s explanation of basic marketing principles, specifically those concerning the role of brands, brand information processing and the importance of powerful brand cues.
65 She also agrees that "AUSTRALIAN HOME BEAUTIFUL" is a successful magazine and a brand with significant brand equity likely to be recognised by Australian consumers; and with Professor Dowling’s analysis of the way in which "AUSTRALIAN HOME BEAUTIFUL" is likely to be recognised, and of the importance of the typeface and appearance in which the word "HOME" is written with greater prominence over the words "BEAUTIFUL". She also notes that there is "quite a distinctive styling" in the font used for "HOME".
66 She further agrees with Professor Dowling’s point that exposure of a consumer to a few powerful brand cues, perhaps even one, may be sufficient to trigger activation of the entire linked network of brand associations.
67 She does not, however, agree with Professor Dowling’s opinion that consumers will perceive "25 BEAUTIFUL HOMES" to have a similar overall brand image to that described in relation to "AUSTRALIAN HOME BEAUTIFUL". The fact that "25 BEAUTIFUL HOMES" is prominently positioned in the upper section of the front cover is "almost generic to the entire magazine category", for the reasons that Professor Dowling outlines elsewhere. Because of the way magazines are displayed, it is often only the top quarter of the magazine which is visible; hence, that is where all magazines prominently write their brand name.
68 In Ms Strachan’s opinion, the appearances of the two banners – "25 BEAUTIFUL HOMES" and "AUSTRALIAN HOME BEAUTIFUL" are very distinct. Colour plays a very important part in brand recognition, and "25 BEAUTIFUL HOMES" does not use a single colour. The number "25" is a critical (and a very prominent) part of the banner for "25 BEAUTIFUL HOMES". The word "HOMES" is written below the word "BEAUTIFUL", whereas on "AUSTRALIAN HOME BEAUTIFUL", the word "BEAUTIFUL" is written below the word "HOME". "BEAUTIFUL" on "AUSTRALIAN HOME BEAUTIFUL" is written in lower case, and the word "BEAUTIFUL" in "25 BEAUTIFUL HOMES" is written in black lettering, using upper case. The dominant communication from "25 BEAUTIFUL HOMES" is "25" and "HOMES", whereas the dominant communication from "AUSTRALIAN HOME BEAUTIFUL" is the word "HOME" with "BEAUTIFUL" in a secondary role.
69 "AUSTRALIAN HOME BEAUTIFUL" is in itself a brand name, and the unusual position of "BEAUTIFUL" after "HOME" – the adjective after the noun – is an important part of the brand recognition. "BEAUTIFUL HOMES" sounds completely different from "HOME BEAUTIFUL" and, in her opinion, would be perceived by consumers to be so. "AUSTRALIAN HOME BEAUTIFUL" is a different retail price – "significantly more expensive" than "25 BEAUTIFUL HOMES". Whilst price is not in general a major brand recognition cue, consumers are aware of prices for products like magazines and a dollar is a "significant" difference. (As will be seen, Ms Strachan later corrected this evidence.)
70 Although the Australian magazine market is "cluttered", it has been cluttered for many years, and consumers have shown themselves particularly adept in selecting the products they want from among this "clutter". ("Clutter", in this connection, indicates that the consumer can choose from a lot of magazines.) Consumers enjoy looking at the range of products offered to them, and making their decisions accordingly.
71 In Ms Strachan’s opinion, the words "AUSTRALIAN HOME BEAUTIFUL" in the particular and individual style as presented on the magazine, would act for consumers as one such recognition cue.
72 There are many magazines with the word "HOME" in the marketplace. The fact that publishers choose names which include the word "HOME", indicates that the use of that word in the title is not a barrier to consumer recognition in distinguishing between titles containing that word. Magazine purchasers have a long history of purchasing in a marketplace where key words in the brand name are similar. That a major part of the cover of both products "AUSTRALIAN HOME BEAUTIFUL" and "25 BEAUTIFUL HOMES" shows a photograph of a contemporary home interior is not only common to "AUSTRALIAN HOME BEAUTIFUL" and "25 BEAUTIFUL HOMES" but to most of the magazines in the category.
73 Variety-seekers – if they exist as a category – seek variety by reading and browsing and examining the titles carefully. Whether or not magazine editors seek to vary the appearance of their magazines is not relevant. One aspect of their magazine cover which they do not vary is the way they present the brand name. Consumers understand this and, as Professor Dowling points out, they rely upon the top banner section of each magazine to recognise the brands with which they are familiar, or to identify a new product.
74 Ms Strachan sees almost no similarity between the two banners. The dominant communication from "25 BEAUTIFUL HOMES" is the number "25". This and the fact that it is written on a light background to separate the banner form the rest of the magazine makes it completely different from the overall appearance of "AUSTRALIAN HOME BEAUTIFUL". Professor Dowling makes the point, agreed by Ms Strachan, that consumers are very adept in recognising brand extensions, but she can see nothing, however, to justify his conclusion that "25 BEAUTIFUL HOMES" is likely to be interpreted as a special edition of "AUSTRALIAN HOME BEAUTIFUL".
75 As Professor Dowling points out, "AUSTRALIAN HOME BEAUTIFUL" is a strong brand in the Australian market with significant brand equity. If "25 BEAUTIFUL HOMES" was an extension of "AUSTRALIAN HOME BEAUTIFUL", the marketing staff "should be dismissed for incompetence" in that none of the key brand recognition cues for "AUSTRALIAN HOME BEAUTIFUL", as accepted in the principles of marketing, are reflected in "25 BEAUTIFUL HOMES". As Professor Dowling points out, the full name for "AUSTRALIAN HOME BEAUTIFUL" is just that – "AUSTRALIAN HOME BEAUTIFUL". The "AUSTRALIAN" is written vertically down the side of the "H". Consumers know and expect this to be there. They may not read it every time they look and purchase a copy of "AUSTRALIAN HOME BEAUTIFUL", but they are aware that it is part of the "gestalt" with which they recognise their brand name. Even just the font style and unusual way of writing the "H" is a part of their brand recognition cues. The fact that the "AUSTRALIAN HOME BEAUTIFUL" is not positioned on a discrete white banner or any other colour, but superimposed over whatever the room setting is, would also be a part of the brand recognition cues. The success of a brand extension relies upon the consumer’s ability to carry forward the values with which they associate the parent brand – in this case "AUSTRALIAN HOME BEAUTIFUL". If "25 BEAUTIFUL HOMES" were a brand extension of "AUSTRALIAN HOME BEAUTIFUL", how would a consumer recognise this? How would he or she carry forward the brand values? The word "HOME" is not there. "HOMES" does not mean quite the same thing as "HOME". "BEAUTIFUL" is written in a different font style and different colour. "AUSTRALIAN" is not mentioned. And there is a prominent distinguishing feature in the number "25". There is no evidence of the parental logo at all. Over the last two years, the logo has adopted one of two forms.
76 In Ms Strachan’s opinion, the brand name "AUSTRALIAN HOME BEAUTIFUL" is so strong that anybody reading a copy of "AUSTRALIAN HOME BEAUTIFUL" picked up in a doctor’s surgery, or anywhere else, would be well aware of the title. Because the brand name is so well known as "AUSTRALIAN HOME BEAUTIFUL", she finds it very difficult to imagine that any consumer having been exposed to the magazine market, did not have a similar high recognition of the "AUSTRALIAN HOME BEAUTIFUL" logo; and it is "equally incomprehensible" for "AUSTRALIAN HOME BEAUTIFUL" to publish a brand extension without reproducing the logo somewhere on the front cover. The whole point of the special edition, or a brand extension, is "to capitalise upon the values inherent in the parent brand". In this instance, there is "obvious equity locked up" in the brand name "AUSTRALIAN HOME BEAUTIFUL". If the brand recognition cues are so subtle that consumers do not recognise the special edition or brand extension, there would be "no value or point in the extension".
77 As Professor Dowling observes, in the case of newly released magazines, respondents tend to try before they buy. In other words, it is not an indifferent or "low involvement" purchase, and they take the time to flick through and look. Such consumers would certainly also look at the title and observe that it was a new title.
78 Ms Strachan disagrees with Professor Dowling’s dismissal of the importance of the number "25" within the title. That magazines do have "450 Best Ideas" or "10 Best Ever Colour Combinations" is certainly true, but she has never seen a copy of "AUSTRALIAN HOME BEAUTIFUL", "COUNTRY HOME" or "BETTER HOMES & GARDENS" where they place the number in front of the magazine title within the brand recognition banner. Such taglines are almost always written lower down on the magazine cover and, as Professor Dowling points out, this part of the magazine cover is very often not visible at all at the point of purchase.
79 She agrees with Professor Dowling that the phrase "HOME BEAUTIFUL" is unusual and a distinctive part of the brand values of the title "AUSTRALIAN HOME BEAUTIFUL".
80 Ms Strachan also agrees that the role of the brand is particularly important in the home magazine market. But the more important the recognition of brand is, the more likely it is that consumers give sufficient attention to ensure that they are choosing the right brand.
81 She accepts that a large number of magazines in the category contain the word "BEAUTIFUL" and "HOME" or "HOMES". In her opinion, consumers would be aware of this, and they would thus be very unlikely to associate the word "home" or "beautiful" as the exclusive property of any one brand. The titles of these magazines are, as Professor Dowling points out, generic and descriptive words – exactly as is "25 BEAUTIFUL HOMES". "AUSTRALIAN HOME BEAUTIFUL" stands out alone as being one magazine which uses these common words where an attempt has been made to differentiate through the unusual reversal of the two words, which as Professor Dowling says, is "almost poetic".
82 Disagreeing entirely with the "scenarios" provided by Professor Dowling, Ms Strachan says that a consumer who is peripherally aware of "AUSTRALIAN HOME BEAUTIFUL" would have noted the reversal of the two words, and would see "25 BEAUTIFUL HOMES" as a much more generic and descriptive title. Further, "AUSTRALIAN HOME BEAUTIFUL" is a very strong brand name through juxtaposition of the two words. Moreover, consumers are "experts" at "logo recognition" and it would be "very surprising indeed" for a consumer to assume that one product, when viewed side by side with another, was connected with another, when it failed to reproduce the logo of the parent brand, even in small font.
83 In her opinion, consumers will "readily distinguish" the two magazines and "would not think" that "25 BEAUTIFUL HOMES" was the same as, or connected with, or from the same source as, "AUSTRALIAN HOME BEAUTIFUL".
84 In cross-examination, Ms Strachan said that, whilst she agreed with Professor Dowling’s explanation of general marketing principles, she did not necessarily accept the way he applied them.
85 Ms Strachan said that the applicant’s magazine is "more often" referred to as "HOME BEAUTIFUL" than "AUSTRALIAN HOME BEAUTIFUL"; and that, in the stylisation of its logo or banner, "AUSTRALIAN" is given "a very subdued appearance", or "a very minor part". At the same time, the numerical description of the homes the subject of the respondent’s magazine means that its whole title is "very descriptive and generic". Later, Ms Strachan said that the number "25" is "a very strong part" of those three words; "25" is "very clear and loud in that banner".
86 In her opinion, the "inversion" in the title "HOME BEAUTIFUL" is "intrinsic" to what makes it a brand name, "as opposed to a descriptive phrase, if that is the essence of the branding", so that "a lot of the distinctiveness" of the brand name "HOME BEAUTIFUL" is based upon the unusual juxtaposition of the words, putting the adjective after the noun, rather than, in the general descriptive sense, before the noun.
87 The difference of one dollar in the pricing of the two magazines is, in her view, "significant". Magazines are regarded by consumers as an "indulgent" purchase, about which many consumers "actually feel a bit guilty". However, Ms Strachan conceded that in her affidavit (as noted above) she had been misinformed when she said that the applicant’s magazine was more expensive. She also accepted that the price of magazines which the respondent regarded as competitive ranged between $4.85 and $7.50.
88 Whilst Ms Strachan agrees with Professor Dowling that the role of the newsagent here is "minimal", she disputes his view that consumers inevitably attempt to simplify the process of information and decision-making.
89 Ms Strachan accepted that if the respondent was seeking in its Australian magazine to draw upon the "heritage" of the UK magazine, then one would assume that the respondent would "make some reference to it in some way – either by reproducing a logo or a similarity in the name ... ".
90 Ms Strachan said that when she looks at the title "HOME BEAUTIFUL", she sees it "as a brand name ... [which] refers to ‘home’ in the singular, as in this particular home and [it] is there to give [her] ideas as to what [she] can do in [her] home". On the other hand, when she sees the "descriptive title" of "25 BEAUTIFUL HOMES", she expects the content of that magazine "to be a photographic portrayal of 25 particular homes". Moreover, in her view, consumers would not assume "common ownership" or a "compilation" here; first, because consumers would also expect there to be (expressed) somewhere on that compilation, a link back to the initial publication; and, secondly, because consumers know that the homes are not owned by the magazines "so seeing common content would not necessarily cause them to assume that there was a link between the publications". However, if consumers recognised all of the twenty-five beautiful homes as homes they had seen in "HOME BEAUTIFUL", some consumers "would wonder" whether there was some connection. If, say, five out of the twenty-five previously came from "HOME BEAUTIFUL", only "a very small number" would wonder.
ADMISSIBILITY OF THE EXPERT EVIDENCE
91 As has been mentioned, objections were taken to the admissibility of the expert evidence. However, as the litigation progressed (and it was prepared for a final hearing with commendable expedition and care), it emerged that, in truth, the parties, through their respective experts, were agreed on the "general principles of marketing", and that the area of real dispute was their application; that is to say, the ultimate issue.
92 Because there was (understandably) no time for either party to carry out any empirical tests here, and because, as will be seen, the adjudication of the present claims are essentially matters for the Court’s impression, even if I were to admit the expert’s views in that area to be admissible (a question I need not now rule upon), I would give those views no more than nominal weight, bearing in mind their "impressionistic" and unscientific method.
CONCLUSIONS ON THE TRADE MARKS INFRINGEMENT CLAIMS
93 It will be convenient to consider each of the applicant’s marks in suit in turn.
94 The rights given by the TMA by the registration of a trade mark ("TM") include the right of the registered owner to obtain relief under the TMA if the TM has been infringed (s 20(2)).
95 Under the TMA, a person infringes a registered TM if the person "uses as a [TM] a sign that is substantially identical with, or deceptively similar to, the [TM] in relation to goods ... in respect of which the TM is registered" (s 120(1)); or in relation to "goods of the same description as that of goods ... in respect of which the [TM] is registered. ... However, the person is not taken to have infringed the [TM] if the person establishes that using the sign as the person did is not likely to deceive or cause confusion" (s 120(2)).
96 For the purposes of the TMA, a TM is taken to be "deceptively similar" to another TM if it "so nearly resembles the other [TM] that it is likely to deceive or cause confusion" (s 10).
97 It will be recalled that the applicant’s claim is that –
• The respondent is using as a TM the sign "25 BEAUTIFUL HOMES".
• The sign (a) so nearly resembles the applicant’s TM that it is likely to deceive or cause confusion; and (b) is substantially identical with, or deceptively similar to the applicant’s TM.
• The respondent’s magazines are goods in respect of which the applicant’s goods are registered, or of the same description as that of the goods in respect of which the applicant’s TM is registered.
98 It will further be recalled that, although nothing of significance appears to turn on the distinction here, infringement under both s 120(1) and s 120(2) is claimed.
99 However, as I followed the applicant’s argument, the applicant does not now seriously (or perhaps at all) pursue its plea that the respective marks were "substantially identical". In my opinion, that concession is properly made (see, e.g., Anheuser-Busch Inc v Budejovicky Budvar (2002) AIPC 91 – 789 per Allsop J at [135] – [190]).
100 However, in support of its claims of "deceptive similarity", the applicant contends:
The respondent, as it admits in its defence, is using the mark "25 BEAUTIFUL HOMES" as a TM use; that is, the respondent uses the title of its new magazine (to pick up the language of s 17 of the TMA) "to distinguish goods ... dealt with ... in the course of trade by [the respondent] from goods so dealt with ... in the course of trade by any other person".
The respondent’s mark is, in terms of s 120(1) "deceptively similar" to the applicant’s mark, because [within s 10] it "so nearly resembles that other [TM] that it is likely to cause confusion" in the sense explained by the High Court in the frequently cited passage in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1953] HCA 73; (1954) 91 CLR 592 at 608 (in the context of an application for registration under the 1955 Act), that is: "... a real risk that ‘the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source’." (Emphasis added)
Here, a number of persons would be caused to wonder whether the respondent’s magazine is a "one shot", or "best of", compilation of the applicant’s magazine. In making this assessment, the Court should take into account, as was held in MID Sydney Pty Limited v Australian Tourism Co Ltd (1998) 90 FCR 236 at 244 - 247, any "normal and fair use" of the applicant’s mark (see also Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107 at 122), which is unrestricted and covers magazines (Class 16), so that it is within the ambit of that registration for the applicant to publish a "one-shot", or "best of", under its TM in order, as Mr Meikle’s evidence indicated, to trade on the reputation previously established by the applicant’s particular title, as is common practice in the industry.
In assessing whether there is "deceptive similarity", as was held in the frequently cited passages in Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51; (1937) 58 CLR 641 at 658, and in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd [1961] HCA 75; (1963) 109 CLR 407 at 415, the marks are not compared side by side; rather, an attempt should be made to estimate the effect, or impression, produced on the mind of potential customers by the applicant’s mark, which recollection is necessarily the basis of any mistaken belief that the respondent’s mark is the same, upon the footing that potential buyers are not to be credited with any high perception of habitual caution, whilst exceptional carelessness or stupidity may be disregarded. Here, the applicant’s and the respondent’s goods will each be sold through the same trade channels to consumers in the same "homemaker" market, the principal target being, as Mr Meikle said, readers with high disposable incomes. The respondent’s management so viewed its magazine’s target readership; and its executive team brief on the launch of its magazine stated (Ex E p 2):
"Readership-wise, ["25 BEAUTIFUL HOMES"] corresponds with Better Homes & Gardens but most closely with Australian House & Garden and Australian Home Beautiful, who also have a high percentage readership in the AB quintile bracket. Their readers also tend to be older (35 plus) with higher than average incomes ... ."
Moreover, the respondent has instructed newsagents to display its magazine between these titles. Both magazines have a similar price point, which is within the range of homemaker magazines offered in Australia.
The essential idea of the applicant’s mark, that is, of beautiful homes, is conveyed also by the respondent’s title, through the use of almost identical words; and the respondent’s addition of the number "25" is unlikely to be sufficient to distinguish its magazine; rather, it is entirely consistent with the idea of a "one shot", or other compilation of twenty-five homes chosen from issues of the applicant’s magazine; and the first issue of the respondent’s magazine chose five homes, and reproduces twenty photographs from past issues of the applicant’s magazine. Nor is the mere reversal of the title words likely to prevent confusion in the minds of consumers, assuming "imperfect recollection".
Consumers’ decisions to purchase these magazines is influenced at the point of sale by a narrowly defined product category, sold at a relatively low cost (allowing scope for impulse-buying), in an environment where a number of products are offered under various names which, although not the same, possess some similarities and convey a similar concept, viz. the design and decoration of homes. In such a market, as Professor Dowling explained, there is potential for a consumer to confuse names, to recall incorrectly a brand name; and a new brand might well capitalise on this by using a name that looks and/or sounds like a more established brand.
This is what the respondent intended to do here (with as little investment as possible – hence its management’s description of the project as a "breakeven model" and Ms Hayes’ proposal to acquire cheaper secondary usage photographs.
Because no other Australian magazine combines the words "HOME" and "BEAUTIFUL", it is no answer for the respondent to contend that there were other magazines on offer for instance, foreign magazines of limited circulation, using "HOME" and/or "BEAUTIFUL" in their titles.
It should be inferred that the respondent intended that some such association would be perceived by consumers, and, in accordance with the well known observations in Australian Woollen Mills at 657, this provides a "reliable and expert opinion" as to the likely result of the respondent’s acts, the bases for the inference being:
o The change in the respondent’s type face to delete the serif, and to simplify the overall look of the title.
o The absence of any mention of the UK magazine in the editor’s note in the respondent’s first issue, despite the evidence of Ms Mitchell that the use of the name was intended to build on the UK title’s existing reputation.
o The instruction to newsagents to position the respondent’s magazine alongside the applicant’s.
o The decision to publish five stories on homes featured in the applicant’s previous issues of "HOME BEAUTIFUL" and to use the same photographs. Given the close rivalry for readership in the homemaker market, the Court should not accept that this was done in ignorance of the applicant’s previous issues. As Ms Hayes agreed, the expression "secondary usage pictures" in relation to the photographs used by the respondent meant that they had been published elsewhere. Her interpretation of the warning she was given about such usage should not be accepted. Further, Ms Mitchell agreed that readers recall photographs they have seen published elsewhere.
o The respondent’s close focus on "HOME BEAUTIFUL" (amongst other titles in the homemaker market in Australia) as evidenced by the respondent’s documentation of the "Launch Proposal" in particular. These documents reveal intense study by the respondent of the participants in the homemaker market in Australia, including "HOME BEAUTIFUL", their content position, readership trends over five years, details of frequency of publication, price and circulation; and
o The respondent’s knowledge that its likely readership corresponded most closely with "AUSTRALIAN HOUSE & GARDEN" and "HOME BEAUTIFUL", and the fact that this was its target market.
101 I have difficulty accepting the applicant’s arguments.
102 The general principles to be applied in this area of "deceptive similarity" are now well established, relevantly as follows:
• The primary comparison must be between the applicant’s registered mark on the one hand, and the mark as used by the respondent on the other. (Contrast a passing off action where a plaintiff points to the goodwill built up around the mark by reason of prior use and then points to the defendant’s conduct as leading to deception (or confusion) and consequent damage to the plaintiff’s goodwill) (Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 per Gummow J at 128 and the cases there cited).
• Whilst evidence of trade usage is admissible, the comparison is between any normal use of the applicant’s mark and that which the respondent actually does on its magazine, but ignoring any matter added to the allegedly infringing trade mark, so that, for instance, the Court disregards as presently irrelevant any disclaimer, price differential or differences in use by the parties of colour or display method or in the respective sections of the public to whom the magazines are sold (Wingate at 128 – 129). In other words, whilst, as Parker J observed in Pianotist Company’s Application (1906) 23 RPC 774 at 777, the Court is to take into account "all the surrounding circumstances", this is to be understood as a reference to the general context, or setting in which the marks are to be compared. As the respondent submitted, this is not an invitation to compare the respective contents of the parties’ own magazines.
• In making an aural comparison of the marks, the Court is ordinarily concerned with what appears to be the natural and ordinary pronunciation, although evidence is admissible that those in the trade and consumers pronounce the respective marks in a way that departs from the normal fashion (Wingate at 129).
• Evidence of cases of deception or confusion may be taken into account (Wingate at 129).
• Although not decisive, evidence is admissible that a defendant adopted a mark "with a view to sailing close to the wind" (Wingate at 129).
• The respective marks are not (as in a claim of "substantial identity" or "abstract similarity") looked at side by side; rather the comparison is between the impression based on the recollection of the plaintiff’s mark which persons of ordinary intelligence and memory would have, and the impression that such persons would obtain from the allegedly infringing use by the defendant (Wingate at 129); for, as Lord Radcliffe observed in de Cordova v Vick Chemical Co (1951) 68 RPC 103 at 106:
"The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him ... . It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole."
103 In my opinion, applying the terms of s 10 of the TMA, the applicant has not demonstrated that the respondent’s use of its mark "25 BEAUTIFUL HOMES" "so nearly resembles" the applicant’s mark "HOME BEAUTIFUL" that the respondent’s mark "is likely to deceive or cause confusion", for these reasons:
The likelihood or unlikelihood of deception or confusion "is a question of fact but it is very much a matter of impression" (per Barwick CJ in Berlei Hestia Industries Ltd v Bali Co Inc [1973] HCA 43; (1973) 129 CLR 353 at 357).
Although it may bear upon the other causes of action sued upon, the actual content of the respondent’s magazine is immaterial for immediate purposes, since the present inquiry is whether the respondent’s use of its mark is likely to deceive or confuse. That is, for TM purposes (as distinct from the position under the TPA) the Court cannot take into account extrinsic circumstances such as the respondent’s use of photographs previously used by the applicant, and the respondent’s failure to mention that the respondent’s magazine is a local version of its UK magazine.
Although registration of the applicant’s mark proceeded upon the footing that it was, at least some extent, inherently adapted to distinguish, its separate elements – "BEAUTIFUL" and "HOME", as the respondent submitted, are simple, ordinary English words with no inherent capacity to distinguish; likewise, since the expression "BEAUTIFUL HOMES" is entirely descriptive, it has no inherent capacity to distinguish.
Indeed, as the respondent submitted, a reason why the applicant’s TM has at least some inherent capacity to distinguish is because it reverses the usual and expected syntactical order, so that the adjective "BEAUTIFUL" is placed after the noun "HOME" to create something which is unusual and unexpected, with the consequence that the words lose, to an extent, their "ordinariness"; in truth, the combined words take on a unity of expression which they would not otherwise have. As the respondent’s Counsel submitted, on analysis, two ordinary words are used and –
"... the overall impression in use – whether visual or aural – is one of a new, compound expression – ‘HOME BEAUTIFUL’ ... [and] ... within these limits ... the [TM] has its monopoly. If one were to disengage that particular ‘reverse order’ combination, then the result would be an ordinary English expression, which all are free to use - ... [including] ... the completely descriptive plural expressions BEAUTIFUL HOMES."
104 It must follow, in my opinion, that the descriptive title "25 BEAUTIFUL HOMES" is not deceptively similar to the applicant’s TM.
105 For completeness, I should add that, whilst the evidence shows that the respondent wished to "target" the "readership" of several magazines, including the applicant’s, I am not satisfied that the management of the respondent is guilty of any fraudulent intention to appropriate the applicant’s TM when it decided to launch the UK version here. In any event, even if the respondent intended to "sail close to the wind", this is not a decisive consideration for TM purposes.
106 It will be recalled that this TM comprises not only "HOME BEAUTIFUL" but is prefaced by the word "Australian". It must follow, in my view, that for at least the reasons given in respect of TM 748943, this claim of infringement must fail also.
CONCLUSIONS ON THE CLAIM OF PASSING OFF AND FOR CONTRAVENTION OF THE TPA
107 In support of these claims, the applicant submits, and I accept, that the Court’s conclusion on s 52 would necessarily carry with it a conclusion on s 53(c) and (d) under the law of passing off).
108 The applicant submits, and I accept, that it has established a substantial reputation in the title of its magazine, by virtue of the following:
It is not seriously disputed that the magazine has been distributed throughout Australia by the applicant or its predecessors in title since 1925.
In its solicitor’s correspondence, the respondent has acknowledged that the applicant’s title "... is a long-standing, successful and well known magazine in the homemaker segment"; and Ms Strachan acknowledged that the title is a distinctive mark with valuable brand equity.
Nor is it seriously disputed that the magazine is generally known as "HOME BEAUTIFUL" rather than "AUSTRALIAN HOME BEAUTIFUL".
This reputation is well established, given a monthly circulation of about 80,000 copies and substantial advertising revenue in addition to direct sales revenue.
109 The general principles in this area are now well settled. As Allsop J said in Anheuser-Busch, above (at [239]):
"It is a question of fact to be judged in all the circumstances as to whether the conduct of the first respondent engaged in, and threatened, is, or would be, misleading or deceptive or likely to mislead or deceive: S & I Publishing [Pty Ltd v Australian Surf Life Saver Pty Ltd (1998) 88 FCR 354] at 363, [Taco Company of Australia Inc v] Taco Bell [Pty Ltd (1982) 42 ALR 177] at 202, referred to with approval by the High Court in Campomar [Sociedad, Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45] at [100].
110 In my opinion, essentially for the reasons given in dismissing the trade marks infringement claims, the mere use by the respondent of the title "25 BEAUTIFUL HOMES" is not, itself, likely to deceive or mislead as a matter of fact. However, s 52 requires the Court to consider objectively the whole of the conduct of the respondent in all of the surrounding circumstances.
111 Here, the evidence demonstrates that in the only edition published thus far, the respondent has included a significant proportion (20 per cent) of photographs previously included in the applicant’s publication.
112 In my opinion, given the other common features involved, especially the same target readership ("homemakers"), the use of the same words in their respective titles (albeit in reverse order) and the respondent’s instructions to newsagents to locate its product near the applicant’s, the respondent’s use of the applicant’s photographs, and the failure to mention the respondent’s connection with the UK magazine in the editorial, is likely to create an impression in the minds of consumers that, contrary to the fact, there is some connection between the respondent’s magazine and the applicant’s, which, unless corrected (and it was not corrected in the November 2002 edition), would thus be likely to mislead or deceive, in contravention of s 52.
113 It follows, in my view, that the Court should restrain the future publication by the respondent of a magazine using the format of the November 2002 edition (that is, utilising photographs which had previously appeared in the applicant’s magazine and failing to mention that the respondent’s magazine is a local version of its UK magazine) without clearly distinguishing its magazine from the applicant’s (see, e.g. Parker-Knoll Ltd v Knoll International Ltd [1961] RPC 346 at 362).
114 In the present circumstances, I think that the appropriate orders to be made now are to declare that the respondent’s conduct in publishing its November 2002 edition contravened s 52 of the TPA, but not at this stage to enjoin future unlawful conduct, reserving, however, liberty to the applicant to apply in that connection should the respondent threaten to engage in such conduct in the future.
115 Since each party has had some measure of success, there should be no order for costs.
116 I make these orders:
1. Dismiss the applicant’s claims for trade mark infringements.
2. Declare that the respondent’s conduct in publishing its November 2002 ("Summer 2002/3") edition of "25 BEAUTIFUL HOMES" contravened s 52 of the Trade Practices Act 1974 (Cth). Reserve liberty to the applicant to apply for further relief in this connection (including any claim for injunction, damages or loss of profits) on such notice (if any) as a Judge of the Court may allow.
3. No order for costs.
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I certify that the preceding one hundred and sixteen (116) numbered
paragraphs are a true copy of the Reasons for Judgment herein
of the Honourable
Justice Beaumont.
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Associate:
Dated: 24 February 2003
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Counsel for the Applicant:
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F Douglas QC
S Goddard |
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Solicitor for the Applicant:
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Gray & Perkins
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Counsel for the Respondent:
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D Yates SC
M J Darke |
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Solicitor for the Respondent:
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Minter Ellison
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Date of Hearing:
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11 – 13, 16 December 2002
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Date of Judgment:
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24 February 2003
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2003/104.html