Tooheys Pty Limited v Coopers Brewery Limited [2003] FCA 148 (7 March 2003)

Last Updated: 10 March 2003

FEDERAL COURT OF AUSTRALIA

Tooheys Pty Limited v Coopers Brewery Limited [2003] FCA 148

INJUNCTION - Interlocutory injunction sought - respondent recently launched new range of draught and light beers - use of expressions "NEW DRAUGHT" and "NEW LIGHT" - applicant alleges respondent's use of word "NEW" is misleading and deceptive - evidence of substantial promotion by applicant of the word "NEW" in connection with its flagship beer - respondent seeking to inform consumers of its new beer products - respondent's intention to use the word "NEW" for limited time - whether serious question to be tried in respect of use of the word "NEW" - balance of convenience - evidence regarding hardship - whether balance of convenience warrants grant of interlocutory injunction

Trade Practices Act 1974 (Cth) s 52

Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 cited

Trade Practices Commission v Santos Ltd (1992) 38 FCR 382 cited

American Cyanamid Co v Ethicon Ltd [1975] 2 AC 396 referred to

Twentieth Century Fox Film Corporation v The South Australian Brewery Co Ltd (1996) 66 FCR 451 referred to

Oxford English Dictionary (2^nd ed., 1989)

TOOHEYS PTY LIMITED v COOPERS BREWERY LIMITED

N 153 of 2003

TAMBERLIN J

SYDNEY

7 MARCH 2003

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	153 OF 2003

BETWEEN:	TOOHEYS PTY LIMITED (ACN 000 002 598) APPLICANT
AND:	COOPERS BREWERY LIMITED (ACN 007 871 409) RESPONDENT
JUDGE:	TAMBERLIN J
DATE OF ORDER:	28 FEBRUARY 2003
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application for interlocutory relief is dismissed.

2. Costs are reserved.

3. The parties address the issue of costs at the directions hearing on 21 March 2003.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	153 OF 2003

BETWEEN:	TOOHEYS PTY LIMITED (ACN 000 002 598) APPLICANT
AND:	COOPERS BREWERY LIMITED (ACN 007 871 409) RESPONDENT

JUDGE:	TAMBERLIN J
DATE:	7 MARCH 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 This application was heard by me on Wednesday 26 February 2003. In view of the urgency of the matter I made an order on Friday 28 February 2003 dismissing the application but did not then publish my reasons and reserved the question of costs for argument. I now publish my reasons for making those orders.

2 The applicant ("Tooheys") seeks to restrain the respondent ("Coopers") until further order from selling or marketing any beer in Australia by reference to packaging containing the words "NEW" and/or "NEW DRAUGHT" and/or "NEW LIGHT", subject to an exception that the order not prevent the use of the word "NEW" otherwise than as part of a "brand" name.

3 Tooheys is a long established Sydney brewery. It has been producing and selling beer by reference to the adjective "NEW" since 1931 and the word was originally adopted to differentiate its lighter lager beer from its established black ale which became known as "Tooheys Old". According to the evidence of Tooheys, the name "NEW" has been retained and extensively promoted and used over seventy years. The Tooheys NEW beer is the "flagship" beer of Tooheys' products. It is Australia's second largest selling beer and it is the top selling tap beer in New South Wales. Since 1998 Tooheys has sold over seven hundred million litres of Tooheys NEW in Australia.

4 Tooheys' case is that it has expended large sums in promoting its beer by reference to the word "NEW". This promotion has taken the form of media advertising, signage, consumer promotions, point of sale promotions, public relations activity and sponsorship of major sporting events.

5 Since 1998 Tooheys has extensively promoted Tooheys NEW draught beer in connection with various slogans which play on the word "NEW" both as an adjective and as a noun which is said to denote the origin of the product as a Tooheys product. It has been featured in radio, television and print advertisements and on every carton of Tooheys NEW sold since 2000. The Tooheys slogans use the double meaning of the word "NEW" to indicate both a description and also a product that is associated with national celebrations, sponsorship of horse racing and football teams. Tooheys does not market a light beer in association with the word "NEW". The Tooheys light beer is known as Tooheys "BLUE".

6 Coopers has very recently begun to market and sell beer by reference to the names "NEW DRAUGHT" and "NEW LIGHT". Tooheys became aware of this on or about 12 February 2003. Examples of the cans and bottles in which the packaged beer is marketed by Tooheys and Coopers are set out below:

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7 Both the Coopers and Tooheys products are sold nationally, although on the evidence, the Coopers products are principally sold and most widely known in South Australia, while Tooheys NEW is most widely known in New South Wales. The beer of both companies is distributed through substantially similar channels which include hotels, pubs, clubs, liquor retailers, restaurants and bars. The evidence indicates that both Tooheys and Coopers beer can be found at the same types of outlets.

8 The case brought by Tooheys that it is inherently likely that Coopers "NEW DRAUGHT" and "NEW LIGHT" will, unless restrained, be distributed and retailed across Australia, including New South Wales where Tooheys NEW has its principal market, to the substantial detriment of Tooheys.

9 Having regard to the fact that interlocutory relief has been sought promptly by Tooheys, the issue of delay does not arise.

10 Although Tooheys intends to rely on registered trade marks to support its case, this application for urgent interlocutory relief is primarily based on s 52 of the Trade Practices Act 1974 (Cth) ("the Act"), on the ground that Coopers, by using the word "NEW" in the context of selling and marketing its products, has engaged in misleading and deceptive conduct which has caused and will be likely to cause detriment to Tooheys and such detriment is not capable of being remedied by an award of damages.

RELEVANT PRINCIPLES

11 There is no contest as to the relevant principles. Tooheys must establish that there is a serious question to be tried, that the balance of convenience favours the grant of interlocutory relief and that damages will not be an adequate remedy: see Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 at 153-154; Trade Practices Commission v Santos Led (1992) 38 FCR 382. In considering the balance of convenience the relative strength of the applicant's case on the merits can be taken into account.

SERIOUS QUESTION TO BE TRIED ON THE s 52 QUESTION

12 Tooheys contends that it has a strong case in that it has established a significant reputation and goodwill in the word "NEW" over many years in relation to beer in the light of its extensive promotion and sales of the product since 1931.

13 The first serious question said to be raised on the interlocutory application is whether the word "NEW" has acquired a secondary meaning that is distinctive of Tooheys' beer product. The word "NEW" is descriptive in character but in respect of beer I am satisfied on the detailed evidence presented that there is a serious question as to whether the word "NEW" has acquired a secondary meaning, although there is an argument to the effect that generally the word "NEW" is primarily an adjectival expression.

14 According to the examples set out in the Oxford English Dictionary (2^nd ed., 1989), the word "new" is a word predominantly used as an adjective, except in a relatively few expressions, such as for example "The News". There are instances where the expression appears to be used as a noun as, for example, in the title of a book such as "The Shock of the New" by the art critic, Robert Hughes. However, even in that example, "New" is used as an adjective describing new art forms, and not strictly as a noun in its own right. It is generally not used in a substantive sense to designate an article or object. Often, the word "new" may be understood as referring to an original or fresh product or a fresh ingredient, element or quality. It indicates that some element or some fresh characteristic has been added or that the noun which is qualified is original or significantly different from that which preceded it. In the case of Coopers "NEW DRAUGHT" and "NEW LIGHT" beers, having regard to its composition and processing, the expression can also be reasonably understood as describing the new elements in the reformulated and processed product and its different ingredients and potency.

15 In addition to the body of evidence adduced by Tooheys relating to expenditure on advertising and the promotion of the word "NEW" in connection with its beer, there is direct evidence that if a person in a bar simply asked for a "NEW" then they would be given the Tooheys product by the bartender. However, perhaps understandably in view of the very recent launch of the Coopers product, there is no direct evidence to the effect that a person in any of the beer drinking outlets or situations referred to above, would be given a Coopers "NEW DRAUGHT", for example, if they simply asked for a "NEW".

16 In light of the applicant's evidence as to its extensive and sustained promotion, I am also satisfied that there is a serious question to be tried as to whether the word "NEW" in relation to draught beer has been established by Tooheys as a "brand" in the sense that it would indicate an association with or provenance of the beer with the Tooheys' enterprise.

17 There is in this case, as in many cases brought under s 52 of the Act, competing evidence between two marketing experts as to the effect of the marketing of Coopers' "NEW DRAUGHT" and "NEW LIGHT" on the perceptions of consumers or prospective consumers. Generally, the Court does not resolve conflicts in the evidence before it on an application for an interlocutory injunction. As stated by Lord Diplock in American Cyanamid Co v Ethicon Ltd [1975] 2 AC 396, at 407:

"It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial."

18 By reason of the interlocutory nature of this application there has been no detailed cross-examination of these experts. At this stage of the matter it is not possible to make any ruling as between this conflicting expert evidence on the aspect of public perception.

19 There are some visual differences between the labels on the bottles produced by the two companies. In the case of the Coopers product, the expressions "NEW LIGHT" and "NEW DRAUGHT" on the bottles are adjacent to the word "Coopers" and the word "Coopers" appears prominently on the neck label of the bottle describing the beer as "NEW LIGHT" and on the cap. On the Tooheys bottles and cans the word "NEW" is considerably more prominent and the labelling colours are different. The Tooheys product also has the "Stag" image featured prominently. In relation to beer sold on tap, the "tap-tops" also reflect these differences.

20 As counsel for Coopers submits these are significant distinguishing features in the labelling of the two products.

21 On the present state of the evidence, while I consider that there is a serious question to be tried in respect of the use of the word "NEW", I do not think that Tooheys' case can be described as unanswerable, but in its present state, it is sufficient to cross the relatively low threshold necessary to enliven a consideration as to whether an interlocutory injunction should be granted.

22 Counsel for Tooheys point out that some of the advertising by Coopers has used bottles which have the expressions "NEW LIGHT" and "NEW DRAUGHT" as a brand name in that there has been a play of words on the expression "NEW". For example, there are catchwords such as "GREAT NEWS FROM COOPERS" under which are depicted bottles of Coopers "NEW LIGHT" and Coopers "NEW DRAUGHT". One inference is that these are new beers and that they originate from Coopers. It is arguable that the word is not used simply in the sense of a descriptor but also as a noun which can be said to convey the association with Coopers as a source.

23 Although the submissions for both parties to some extent included detailed analyses of the relative appearance of the bottles, comparing their labelling and features side by side, it is common ground that this is strictly not the main question, but it can provide a useful starting point on the question of misleading conduct. The question to be addressed on the s 52 claim is basically one of the overall impression which could be conveyed to beer drinkers, purchasers, bartenders and retailers, and the overall impression which would be conveyed by the use of the word "NEW" in the context of the marketing, selling or distribution of beer.

24 There is direct evidence as to association by those serving and supplying beer to the effect that if a request is made using the expression "NEW", an immediate association would arise with the product of Tooheys especially where an oral request made is simply for a "NEW". There is no evidence before me to the effect that a member of the public would in fact be confused by virtue of being supplied with the Coopers beer. Nor is there any evidence at this stage of the proceeding of any sale or any transaction or situation in which a person asking for "NEW" has been given Coopers beer.

25 On the present state of the evidence and without the benefit of cross-examination and further discovery or documentation, it seems to me that there is a serious question to be tried on the application. However, it is not a sufficiently strong of itself, to compel the exercise of the discretion on the balance of convenience in favour of the applicant.

BALANCE OF CONVENIENCE

26 Dr Tim Cooper, the Managing Director of Coopers has given evidence that the Coopers beers in issue are in fact new products, with the company using a different hop treatment to the earlier products resulting in a new taste and a variation of the alcohol content. To convey that message to consumers, Coopers have revamped their packaging and labelling. Dr Cooper's evidence was that Coopers would be removing the word "NEW" after an introductory period of approximately twelve months once the message has been conveyed to the consuming public that new varieties of the Coopers products are being sold. He stated that his position was that the word "NEW" was intended for use as a description to attract consumers to the different product and not as a "brand" taking advantage of the Tooheys reputation in respect of Tooheys NEW. However, on cross-examination he conceded that some of Coopers' advertising, especially that conveying double meanings, might be seen as using the expressions "NEW LIGHT" and "NEW DRAUGHT" to convey a sense of provenance or association with Coopers as the name of a product. On the present state of the evidence I accept that Coopers' intent is to phase out the references to "NEW" and revert to expressions "Coopers Light" and "Coopers Draught" over a twelve month time-frame.

27 As to detriment, Dr Cooper's evidence was that by a large margin, Coopers' principal market was South Australia and that he did not believe Tooheys had a significant market share or a substantial reputation in South Australia. He has detailed in his evidence the expenditure of advertising and point of sale costs committed by Coopers for production of the "NEW LIGHT" and "NEW DRAUGHT" products and said this would be lost if Coopers were ordered to cease advertising and promoting such products. He said that packaging material would have to be redesigned and that a substantial sum of money would be thrown away. He referred in a Confidential Exhibit to the amount of beer packaging which had already been produced using the word "NEW" and pointed out that the value of the stock was very substantial. He also referred to the inability to replace current stock for a period of one to two months. He stated his belief that production may have to cease for one or two months to enable redesign and relabelling of the cans and bottles. He also referred to difficulties in obtaining shrink-wrap film from overseas and the wastage of several months volume of shrink-wrap with artwork. Urgent delivery of new shrink-wrap from France would take a substantial period and it would necessitate for the production of substantial new art work for the cardboard packaging. He adverted to the resultant problem with crown seals, cans, cartons and the impracticability of a recall of the product having regard to the adverse effect of a recall on the reputation of the company. He also gave evidence as to the possible impact on some of the products which would be unsaleable as the relabelling would increase the amount of stock bearing an earlier "best before date" and it would therefore be seen as not "fresh". Furthermore, he contended there would be no likelihood of significant damage to Tooheys having regard to the disproportionate strengths of that company in the New South Wales and South Australian markets where its competitive positions and market share were in converse proportions. Dr Cooper estimates that the possible quantifiable loss which Coopers may suffer as a consequence of an injunction would be in excess of one million dollars, in addition to the adverse impact on the reputation of the company and subsequent loss of sales. On the material presently before me Coopers has presented a substantial case on hardship and balance of convenience.

28 Tooheys' case on balance of convenience is that the preservation of the status quo favours the granting of interlocutory relief and says that its valuable reputation in the use of the expression "NEW" would be damaged. It also relies on evidence that Coopers intends to use the word "NEW" only for a limited time and says that the respondent does not seek to defend the use of the word "NEW" as a trade mark and consequently there can be no claim of damage by delay in the launch of the product as a result of which it hopes to establish a permanent and ongoing reputation which will be adversely affected. It is also said that Tooheys has a strong case regarding infringement and that if interlocutory injunctive relief is not granted Tooheys will suffer significant prejudice which is irremediable by an award of damages. It is said that it is notoriously difficult to quantify damages in such a case and thus damages would not be an effective remedy. Tooheys submits Coopers would be adequately protected by Tooheys' proffered undertaking as to damages. It is also said that when determining to adapt the word "NEW" Coopers must have been aware of the position of Tooheys and that they took a calculated risk in relation to it, so that it is not reasonable to now claim undue hardship if an order is made.

29 In my view the balance of convenience favours refusal of the injunction sought. The evidence before me does not satisfy me that Tooheys would suffer substantial damage to its reputation nor any other detriment which are not compensable in damages or which outweighs the hardship to Coopers if an immediate injunction is not granted.

30 Tooheys' evidence, at this point, as to detriment is generalised and to some extent speculative whereas the Coopers' evidence on this aspect is specific. The expert evidence on both sides is untested. The demarcation between use of the expression "NEW" as a "brand" or as a descriptor of a newly developed product is a fine difference and I do not consider that Tooheys' case must necessarily succeed. There is no submission in this case that the product is inferior in quality so that the reputation of the Tooheys' beer would be diminished: cf Twentieth Century Fox Film Corporation and Another v The South Australian Brewery Co Ltd and Another (1996) 66 FCR 451, where there was evidence that marketing and sales of "Duff Beer" by Lion Nathan could destroy the claimed "wholesome" image of "The Simpsons".

31 Having regard to the whole of the evidence as it now stands, the damage and inconvenience likely to be caused to Coopers outweighs the inconvenience and hardship asserted by Tooheys.

32 For these reasons I refuse the application for interlocutory relief and order that costs of this application be addressed by the parties when they have had an opportunity of considering these reasons.

33 I am prepared, if the parties wish, to fix an early date for the hearing of this matter on a final basis and to expedite the interlocutory steps in the matter to that end.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate:

Dated: 7 March 2003

Counsel for the Applicant:	D Catterns QC D Kell
Solicitor for the Applicant:	Mallesons Stephen Jaques
Counsel for the Respondent:	D Grieve QC A Bowne
Solicitor for the Respondent:	Piper Alderman
Date of Hearing:	26 February 2003
Date of Orders Made:	28 February 2003
Publication of Reasons:	7 March 2003