W and A Gilbey Ltd v Continental Liqueurs Pty Ltd [1960] HCA 21; (1960) 103 CLR 406 (22 April 1960)

HIGH COURT OF AUSTRALIA

W. & A. GILBEY LTD. v. CONTINENTAL LIQUEURS PTY. LTD. [1960] HCA 21; (1960) 103 CLR 406

Passing-off

High Court of Australia
McTiernan(1), Fullagar(1) and Taylor(1) JJ.

CATCHWORDS

Passing-off - Trade name - Use by rival traders in New South Wales - "Smirnoff " - Use by plaintiff for brief period in relation to vodka - Sales confined mostly to Sydney - Balance to liquor trade in few country areas - Earlier use by plaintiff in relation to vodka liqueurs - Neither widespread nor substantial - Purchasers of vodka mostly European immigrants - "Smirnoff" vodka widely known in Europe - No manufacture of or trade by plaintiff in vodka in Europe - Sale by defendant of vodka under name "Pierre Smirnoff" - Suit for injunction - Evidence insufficient to establish reputation for plaintiff in name "Smirnoff" in relation to its product - Relief refused.

HEARING

Sydney, 1959, November 24-27, 30; December 1-3; 1960, April 22. 22:4:1960
APPEAL from the Supreme Court of New South Wales.

DECISION

1960, April 22.
THE COURT delivered the following written judgment: -
This is an appeal from an order of the Supreme Court of New South Wales by advertising, offering for sale or selling or causing to be advertised, offered for sale or sold, vodka, not being the vodka of the respondent, under any name or mark, containing the words "Smirnoff" or "Peter Smirnoff" or "Pierre Smirnoff" and calculated to pass off or enable others to pass off such vodka as and for the respondent's vodka. By its statement of claim the respondent asserted that it and its predecessors in business had for many years been manufacturing and selling vodka and vodka liqueur, under the names of "Smirnoff" and "Peter Smirnoff" put up in bottles of distinctive shape and bearing distinctive labels whereon the words "Smirnoff" and "Peter Smirnoff" were prominently displayed. It was further alleged that such vodka and vodka liqueur had been extensively advertised by the respondent and its predecessors and that they had acquired a large and valuable reputation and market among the trade and public in New South Wales under those names. For many years past, it was asserted, the said names had been in the minds of the trade and of purchasers and of the public solely identified and associated with the vodka and vodka liqueur of the plaintiff or its predecessors. Thereupon the complaint was made that the defendant had recently been offering for sale and selling in New South Wales vodka not of the plaintiff's manufacture put up in bottles substantially identical with the bottles of the plaintiff and bearing labels on which the names "Smirnoff" and "Pierre Smirnoff" were prominently displayed. (at p407)

2. The fact that the appellant sold vodka not of the respondent's manufacture in bottles so labelled is common ground but it should be said at once that the bottles used by both the appellant and the respondent for the distribution and sale of their respective products were ordinary clear 26 oz. bottles and were in no way distinctive. Nor, apart from the fact that the word "Smirnoff" appeared on the respondent's label and the words "Pierre Smirnoff" appeared on that of the appellant, was there any similarity between the labels used by them. As the learned judge of first instance said "The labels of the plaintiff and the defendant are quite dissimilar in appearance", but he thought that "the prominence of the word 'Smirnoff' on each, and the fact that neither can be described without the use of that word make the likelihood of confusion and deception obvious". (at p408)

3. The statement of defence, as amended with considerable prolixity on more than one occasion, not only put in issue the material allegations in the statement of claim but raised defences based upon laches and acquiescence and fraudulent trading on the part of the respondent. In the result the learned trial judge came to the conclusion that the word "Smirnoff" as applied to vodka had, in April 1954, come to mean the plaintiff's vodka and no other and that this situation remained unaltered up to the time when the writ was issued. Thereupon, having rejected the defences of laches and fraudulent trading, he made the order from which this appeal is now brought. (at p408)

4. The respondent company was incorporated in 1948 under the name "Peter Waclaw Pty. Ltd.". From then until 1952 one, Peter Waclaw, owned all, or practically all, of the shares in the company but in November 1952 he sold his shares to Stanley Emery Curtis and others. Thereupon Curtis became the managing director of the company and one, David Ross, became a director and sales manager. As will appear it is not unimportant to mention that both Curtis and Ross came to New South Wales in 1949, the former from Hungary and the latter from Germany. Curtis, originally Imre Kertesz, had lived or travelled at different times in a number of European countries including Hungary, Yugoslavia, Czechoslovakia, Austria, Germany and Italy. Moreover, he and members of his family seem to have been engaged in the wine and spirit business in Hungary. Ross, on the other hand, was born in Czechoslovakia but he has also lived in Transylvania and later in Germany. (at p408)

5. After the purchase of Waclaw's shares in November 1952 the name of the company was changed to the name which it now bears, "Continental Liqueurs Pty. Ltd.". At this time the company did not manufacture vodka for sale. We are told that its production for sale as such was not lawful. But the company did manufacture and sell a range of vodka liqueurs, an activity which it had carried on since its incorporation in 1948 and which, previously, Peter Waclaw, first of all in partnership with another person and then alone, had carried on since about 1943. Apparently, upon its formation Peter Waclaw Pty. Ltd. acquired this business and it was carried on in much the same manner until about March 1953. (at p409)

6. About this time the manufacture of vodka for sale as such became lawful and this is when the company commenced to engage in this activity. Its first sales appear to have been made in March 1953 and this was just thirteen months before the appellant's vodka made its appearance on the market in this State. In February 1954 a representative of the appellant had called on Curtis and had given some indication of his company's intention to market "Smirnoff" vodka in New South Wales and its sales actually commenced in April 1954. For some reason which was not fully explained to us the suit did not come on for hearing until December 1958 when, after a hearing lasting some five days, the respondent was permitted to re-open its case and the hearing of the suit was adjourned until February 1959. In that month the hearing was resumed and it was finally concluded after a further nine days. The order appealed from was made on the 5th March 1959 and since no interlocutory relief had been obtained both the respondent's and appellant's vodka were sold in New South Wales from April 1954 until the date of his Honour's order. It should, perhaps, be mentioned that at one stage the appellant gave an undertaking which restricted the form in which it might advertise its product. (at p409)

7. Upon the allegations made by the respondent in its statement of claim it is, of course, essential to examine the course of its trade and that of its predecessors. In particular, it is necessary to enquire whether, by April 1954, the names "Smirnoff" or "Peter Smirnoff" or "Peter Smirnoff" had in this State acquired a meaning distinctive of the respondent's vodka products. In pursuing this inquiry we may, perhaps, start by recapitulating that from about 1943 to March 1953 vodka liqueurs were manufactured and sold by the respondent and its predecessors and that in the lastmentioned month it ceased to market vodka liqueurs and commenced to manufacture and sell vodka as such. As will appear March 1953 marked a distinct change in the character of the company's trading activities and it is necessary to give some attention to the facts relevant to the earlier period first of all. As a preliminary, however, some reference should be made to various registrations which were effected pursuant to the Business Names Act 1934 (N.S.W.). In October 1943 Waclaw and his then partner registered "Peter Smirnoff" as the business name of a firm carrying on business as "Liqueur Manufacturers". Notice of the fact that Peter Waclaw had carried on the business alone from 30th October 1943 was furnished to the Registrar-General on 23rd June 1954 and on the same day a further notification of change of ownership to Continental Liqueurs Pty. Ltd. was given. On 6th September 1945 the business name "Vodka Liqueurs" was registered by Waclaw and an ultimate notification of change of ownership of the business of "Liqueur Manufacturers" said to be carried on under that name was furnished on 27th May 1954. The new owner was Continental Liqueurs Pty. Ltd. Finally, on 7th August 1953, Continental Liqueurs Pty. Ltd. registered "Smirnoff Co." as the business name of a firm carrying on the business of liqueurs manufacturers. The business in each case was said to be carried on at 42 Market Street, Sydney but there is no evidence that the business which the respondent now owns was ever carried on under the name of "Smirnoff" or "Peter Smirnoff" or "Pierre Smirnoff". Nor does it appear that publicity was given to any of these names except by way of display on the labels which were used on its products and the products of its predecessors and, in 1953 and 1954, by means of advertisements to which we shall presently refer. Prior to March 1953 vodka liqueurs produced in the business were sold in bottles with labels each approximately 4 1/2" x 4" and which bore the inscription in large letters "VODKA LIQUEURS". Beneath these words there appeared in smaller print: -

Formula of
PETER SMIRNOFF of MOSCOW
----------
VODKA LIQUEURS CO.
SYDNEY
NET CONTENTS 13 FL. OZS.
PRODUCT OF AUSTRALIA

The learned judge of first instance attached some importance to the earlier trade in vodka liqueurs and he thought it clear that "Waclaw and the company which he had incorporated had a substantial business in the sale" of those products. No doubt this circumstance carried considerable weight in leading him to the conclusion that "there had . . . been a long and exclusive association of the name 'Smirnoff' with vodka products of the plaintiff and its predecessors" and that those engaged in the retail spririt trade had "identified the word 'Smirnoff' with the plaintiff's product". To us, however, the earlier trade in vodka liqueurs, associated as it was with the word "Peter Smirnoff", is of little, if any, significance in the case. There is, we think, with respect to the learned judge, nothing in the evidence to justify the conclusion that the trade in relation to New South Wales was substantial. All that can be perceived from the evidence is that the respondent and its predecessors manufactured vodka liqueurs, that in the course of trade from 1946 to 1953 - a period of nearly eight years - it made sales to a number of publicans and to some wine and spirit merchants in New South Wales - 155 in all - but how many of these customers bought in more than one of those years or how many customers it had in any one year does not appear. What does appear, however, is that the customers to whom it did make sales represented but a small part of the relevant trade in New South Wales both as to numbers and area. No less important is the fact that the use of the word "Peter Smirnoff", in the context in which it was employed on the labels in question, provided slight, if any, foundation for a claim that that name became in any way distinctive of the vodka liqueurs of the respondent or its predecessors during this period. No doubt the label announced in terms that the liqueurs were made according to the "Formula of Peter Smirnoff of Moscow" but it did not purport to identify the liqueurs in question exclusively with that name or suggest that other traders were not free, if they chose, to employ the same formula. (at p411)

8. As we have said the vodka liqueurs originally manufactured were sold under a label which announced that they were made according to the "Formula of Peter Smirnoff of Moscow". But there is no evidence that the liqueurs were made according to any such formula. Curtis, however, in the course of his evidence, related the terms of a conversation which he claimed to have had with Waclaw prior to the purchase of the latter's shares. Waclaw who, apparently, was born in Russia and who died in 1954, is alleged to have said that when he was about to leave Russia during the Russian Revolution of 1917 to come to Australia his friend, Peter Smirnoff, gave him a formula for the manufacture of vodka and taught him how to make it. He added that he believed that he was entitled to use the formula and sell his products under the name of "Smirnoff". This evidence, for what it is worth, was accepted by the learned judge of first instance. It appears that in Russia the manufacture and sale of vodka by private individuals was prohibited in the year 1904 and that that activity was a State monopoly until 1914. It is said that in that year the sale of vodka was prohibited entirely and that it remained so until 1918. How far this evidence is literally true is open to doubt but since it is not of great importance in the case it may be passed over. Coming to more recent times there is evidence that in 1933 vodka was being produced in France and sold under the name "Pierre Smirnoff". There is also a suggestion in the evidence that vodka manufactured in Poland was also being sold in France about this time under the same name. Then in 1939 a company, Ste. Pierre Smirnoff Inc. of Connecticut, was formed in the United States and some, though unspecified, arrangements were said to have been made by that company with the appellants for the manufacture of "Smirnoff" vodka in the United Kingdom and the countries of the British Commonwealth. But attempts to establish a trade connexion between the Polish and French organizations and, in turn, between the French and the American companies failed. So also did a somewhat tentative attempt to prove the terms of an association between the American company and the appellant. Yet it appears that the label used by the appellant was substantially similar to labels used by the French and American companies and, probably, to that used by the Polish company. This common label depicts a shield surmounted by a crown. The upper part of the shield supports a drape drawn from either side so that folds drop from each of the upper corners of the shield. Across the shield towards the top is a scroll which carries the words "Purveyors to the Imperial Russian Court 1886-1917". Immediately below the scroll there appear the words:

Peter Smirnoff
Est. 1818 Moscow
Successors
Ste. Pierre Smirnoff Fls.

Below these words appears the word "VODKA" and at the base of the label, in the case of the American company, there appears the legend "Prepared and bottled by Ste. Pierre Smirnoff Fls. of Hartford Connecticut U.S.A." For a short time after April 1954 the appellant marketed in New South Wales vodka which had been manufactured in England and during this period the final inscription on its label was "Ste. Pierre Smirnoff Fls. Limited - Produced in England, Oval Road, London N.W.1". But when the appellant commenced to produce vodka in Australia the final legend on its label was "Ste. Pierre Smirnoff - Distilled in Australia". Apart from these final inscriptions on the label the appellant's label has at all times been identical with that of the American company. (at p412)

9. According to the respondent its use of the word "Smirnoff" when it commenced to market vodka in 1953 was but a continuance of the earlier use of the name "Peter Smirnoff" in relation to vodka liqueurs. It was, it was said, in no way induced by the fact, if it was the fact, that the name "Smirnoff", either with or without any first name, was well known overseas. Indeed it was claimed that it had no knowledge of any reputation which had accrued to that name in any other country. But it is apparent that when the respondent commenced to market its vodka in March 1953 the word "Smirnoff" on its label assumed a new significance. There was a label at the base of the neck of each bottle which bore the inscription "Original Vodka". Below this neck label appeared the main label which bore a coloured representation of wheat sheaves in a field and on each side of this pictorial representation there was displayed an ear of wheat in a vertical position. Above the pictorial representation of the field there were the words in bold type "Smirnoff's Famous Vodka" and below there appeared the words "Bottled in Bond under Supervision of Commonwealth Customs Vodka Liqueurs Co., 42 Market Street, Sydney. Contents 26 Fl. ozs. Product of Australia". Surmounting the words "Smirnoff's Famous Vodka" was a word in Russian or Polish. Various proof strengths of vodka were produced and the predominating colour of the label varied with the strength. The colours were black, blue and red. The lastmentioned colour denoted vodka of the greatest strength and in the case of vodka so labelled the neck label bore the inscription "Extra Strength". Labels of this character were used until January 1955 when some minor alterations were made which it is not necessary to specify. It will be observed that this label did not contain merely the assertion that the vodka was manufactured according to some formula which might be available to others; it was "Smirnoff's Famous Vodka" and one cannot fail to notice the word "famous". (at p413)

10. This brings us to a consideration of circumstances which we think tend to diminish the significance of the use by the respondent after March 1953 of the word "Smirnoff's". It is, we think, apparent from the evidence that when the respondent commenced to market vodka as such it did so for the purpose of catering, at least initially, for a very special section of the public. The war years had come to an end and in the succeeding years there had been a large influx of immigrants into Australia. In the main they had come from the United Kingdom and from many of the countries of Europe and there can be no doubt that, primarily, the respondent was interested in the market for vodka which their presence in this country would provide. Indeed so much is apparent from the evidence of both Curtis and Ross. It was because of this that the appellant endeavoured to establish that the names "Smirnoff" and "Pierre Smirnoff", in relation to vodka, were and had been for a very long time well known in Europe. But this, in the opinion of the learned trial judge, it failed to do. He regarded much of the evidence called by the appellant on this issue as unsatisfactory and all that he felt he could find on the evidence was that "after the year 1933 isolated sales of a 'Smirnoff' vodka have been proved in respect of France, Germany and England". With respect to his Honour, however, we take the view that there was abundant proof of the fact that the names "Smirnoff" and "Pierre Smirnoff", in relation to vodka, enjoyed and had for a long time enjoyed a wide reputation in a number of the countries of Europe and, latterly, in the United States of America and the United Kingdom. Our view on this matter in no way depends upon the oral evidence; the fact is that there was documentary evidence which, it seems to us, established that particular issue beyond dispute. (at p414)

11. The evidence that it had acquired an overseas reputation fell into three classes; the oral evidence adduced on behalf of the appellant, evidence of advertisements in overseas journals which came to Australia and, finally, local advertisements published or approved by the respondent. Evidence falling within the second category was supplemented by other evidence with a view to establishing the circulation of the overseas journals in New South Wales but the respondent failed to prove that they had any circulation here. (at p414)

12. Altogether the evidence on this latter point was unsatisfactory and though as individuals in the community we are aware that the journals in question do enjoy a reasonably wide circulation it may be that this is not a fact of which we may take judicial notice. But, however this may be, there is ample evidence that they were published overseas and that they enjoyed a circulation in the countries of their origin. (at p414)

13. We think that in dealing with the evidence on this aspect of the case we should deal, initially, with the advertisements published or approved by the respondent itself. The first of these was a half page advertisement which was inserted by the respondent in the Australian Brewing and Wine Journal on 20th July 1953. This is a journal which circulates among a section of the wine and spirit trade throughout Australia. At the top of the advertisement appeared the word "NOW]", in bold type, followed by the words:

"Available for the first time on the
Australian Market

A complete selection of the finest
European spirits and liqueurs".

Then appeared a picture of three bottles of the respondent's products and beneath there was the following legend:

"These are but three of the complete range of fine
spirits and liqueurs manufactured in Australia which are
equal to the finest quality European beverages.
The formula and processes used in manufacturing
these spirits were developed in Europe over many
generations and we now take pleasure in presenting them
to the Australian market".

The same or substantially similar advertisements appeared in a number of the issues of this journal during 1953 and 1954 and in some of them the word "NOW" was emphasized even more. Another type of advertisement inserted by the respondent in this journal extolled the rapid growth of vodka consumption in the United States and left no room for doubt that the respondent was asserting that "Smirnoff's Vodka" had spread to that country from Europe. It referred to an announcement made in the United States that there had been a fantastic growth in the sales of vodka in that country, that three years ago 700,000 gallons were drunk, that in 1952 the figure rose to 1,500,000 gallons and that on the basis of present consumption the figure for 1953 would exceed 2,700,000 gallons. Then followed this announcement:

"SMIRNOFF'S VODKA, famous in Europe for over a century
is now available in Australia at popular prices. Also available is
Smirnoff's Zubrowka. These popular liquors have resulted in
Australian consumption figures showing a comparable increase per
capita to that of the U.S.A.". (at p415)

14. The next group of advertisements were those inserted in the Licensed Victuallers' Gazette of South Australia by A. E. & F. Tolley Limited, the agent for the respondent in that State. The first of these advertisements, which occupied a full page, appeared in July 1954 and it was repeated monthly until March 1955. It depicted three bottles of the respondent's products and in a circle immediately below was the announcement:

"World famous for high quality and low price]
The world's proven best seller". (at p415)

15. At the head of the advertisement were the words:

"Announcing the arrival of a world famous product.
A. E. & F. Tolley Limited have been appointed South Australian
distributing agents for Smirnoff's Vodka and Zubrowka".

These latter words were the central feature of the page and then appeared the following statement:

"For over a century Smirnoff's vodka has been the best selling
vodka all over the world. American sales of vodka have skyrocketed
to over a million and a half gallons per year in less than
three years - and now Smirnoff's vodka comes to South Australia -
where there are over 21,000 new Australians to whom the name will
be more than familiar. The versatility of Smirnoff as a base for
cocktails and for mixed drinks of all kinds, its high quality and
particularly low price will readily recommend it to 'old' Australians
too. NEW AUSTRALIANS LIKE VODKA - THEY PREFER
SMIRNOFF'S VODKA".

The form of this advertisement was approved by the respondent before its publication and it is difficult to see in the face of the assertion which it makes how it is possible now for the respondent to maintain either that the name "Smirnoff" in relation to vodka, did not enjoy a wide reputation in Europe or that the respondent, itself, was unaware of that fact. We should, we think, add that no suggestion was made that the statements in these advertisements were untrue and we see no reason why, after some allowance is made for the enthusiasm of the advertiser, we should not regard them as being substantially true. Another form of advertisement appeared at a later stage in the Licensed Victuallers' Gazette but it is unnecessary to refer to it in detail. (at p416)

16. The overseas publications which were received in evidence were copies of "Punch" and of the "New Yorker". They were produced from two libraries in Sydney but since the appellant failed to establish that either of these publications had a circulation in New South Wales the learned trial judge refused to treat them as evidence capable of establishing that the name "Smirnoff" had not, in 1953, been identified exclusively in this State with the respondent's product. But even if they were of no assistance to the appellant on that particular issue they at least showed that the word "Smirnoff" was used in England and the United States at the relevant time in association with vodka. Copies of another American publication, "Life", which contained advertisements of vodka sold under the name of "Pierre Smirnoff" in the United States, were rejected. The evidence was that this publication had a circulation of some 5,000,000 in the United States and, if admitted, it would have tended to establish that the name "Smirnoff" in relation to vodka was well known in that country. However, in view of the respondent's own advertisement it is unnecessary to attach any weight to these matters. (at p416)

17. Finally we mention the oral evidence on this issue. As already indicated much of it was regarded by the trial judge as unsatisfactory. But he might not have been disposed to dismiss it so readily if he had attached the significance which we have to the respondent's own advertisements. If, as the respondent claimed, "Smirnoff" or "Pierre Smirnoff" had long enjoyed an extensive reputation in Europe it was by no means improbable that witnesses who had lived or travelled in those parts had become aware of the fact. However, we are content to rely upon the respondent's own assertions which, we think, make it clear that the use of the name "Peter Smirnoff" by the respondent in relation to its vodka was not for the purpose of attempting to appropriate that name to its own exclusive use but rather to assert that its vodka was identical with vodka already well known to those amongst whom it was primarily intended to market it. In other words it may, perhaps, be said that it was not attempting to sell the name "Peter Smirnoff" to the public by the character or quality of its product but, that on the other hand, it was attempting to sell its vodka to a section of the public by the use of a name which was already well known to it. (at p417)

18. Not only does it appear from the evidence that it was the primary intention of the respondent to take advantage of the market provided by the presence in New South Wales of a large body of immigrants who were in the course of assimilation in this country but the testimony of the witnesses called on behalf of the respondent clearly shows that it was among this category that its market was, in the main, found. Indeed, the only witnesses called by the respondent who had had experience of the retail trade showed a remarkable degree of unanimity on the point. There were eight of such witnesses and the first of them, one, Llewellyn, the manager of a Sydney hotel, testified that the purchasers at his hotel were "mostly new Australians as we call them". Another, Lange, who in 1953 assisted in the bottle department of the Royal Hotel at Granville, agreed that vodka was sold mainly to "people known as new Australians" though he did have a few Australian customers. One wine and spirit merchant, Doyle, said that from 1953 till 1955 "mainly new Australians bought it". And another, Swailes, said that Ukrainians and Poles were the persons who principally bought vodka from him. Scala, yet another wine and spirit merchant, said that his retail customers were mostly Italians, Yugoslavs, Russians and Poles. The other witnesses in this group, such as Poland and Wright, were not, as far as we can see, questioned on the point. (at p417)

19. A number of consumer witnesses were called to give evidence and naturally enough in the circumstances, they were nearly all persons who had emigrated from Europe to this country after the war and, it appears, between 1948-1952. They testified that they had commenced to drink the respondent's vodka in 1953. To them, according to the learned trial judge, "Smirnoff" vodka meant the respondent's product and no other but he regarded them as being "too few in number for that circumstance to establish the necessary reputation for the respondent". Nevertheless, he attached some importance to their evidence because it showed that during the critical period in 1953 and the early part of 1954 they had, at the hotels to which they resorted, "always asked for 'Smirnoff' vodka and have always been given the plaintiff's product". This, his Honour thought was "some evidence that in all those hotels to which these witnesses went 'Smirnoff' vodka at this time meant the plaintiff's vodka". We agree with the learned judge that the evidence of the consumer witnesses fails to establish for the respondent that the name "Smirnoff" had in April 1954 acquired in New South Wales the distinctive meaning among members of the public necessary to support the respondent's claim. We reach this conclusion, however, not only by a consideration of the number of the consumer witnesses who were called to give evidence on behalf of the respondent, but also from a consideration of the character and nature of their evidence, the fact that they were drawn merely from a few of the suburbs of Sydney, the fact that there was no evidence from any of the vodka consuming public in any other part of New South Wales, and from the fact that they do not appear, in truth, to be representative of that section of the public whose presence in Australia was to provide a market for the respondent's product. With few exceptions they were young men who first commenced to drink vodka in Australia after their arrival here and had had no experience of vodka in Europe. In short they were not, in the main, "new Australians" to whom the name "Smirnoff" was "more than familiar". So far as the character of their evidence is concerned it is necessary to say no more than that it deals with a few isolated sales during a comparatively brief period of trading which has not been shown to be substantial or general. Indeed, there is nothing in the evidence even to suggest that the trade in vodka at the hotels at which they made their purchases was in any way substantial. (at p418)

20. However, the learned trial judge made it clear that he did not rely merely upon this evidence to make his finding. "The strength of the plaintiff's (respondent's) case" he thought lay "elsewhere". The respondent's trade, his Honour pointed out was a wholesale trade. It sold to hotels, wine and spirit merchants and clubs and upon the evidence he thought it proper to conclude that customers in this category came to identify the word "Smirnoff" with the respondent's product. According to his Honour: "Four publicans and their employees and four wine and spirits merchants have also given evidence. To all these people 'Smirnoff's' vodka has always meant the plaintiff's vodka. But even more significant is their evidence that when their customers wanted the plaintiff's vodka, they have invariably asked for it as 'Smirnoff's'. As I remarked, some buyers of vodka now distinguish between the two products by referring to the one as 'Smirnoff's' and the other as 'Pierre Smirnoff's' but there is no evidence that this was so at any time prior to the issue of the statement of claim. In any event, however important it might be on the issue of confusion, it is very strong evidence that the name 'Smirnoff' alone is associated exclusively with the plaintiff's goods". But with respect to his Honour we find ourselves unable to entertain the view that the evidence of the witnesses referred to by him established that, to people in the trade, "Smirnoff's" vodka has always meant the respondent's vodka. Llewellyn, one of the publicans already referred to, said he had known that "there was a Gilbey's vodka on the market" for "about four years" (i.e. since 1954), that he had many times since 1949 seen "advertisements for Gilbey's Smirnoff's vodka" and that Gilbey's vodka was known as "Smirnoff" vodka. Another witness, Lange who, as already appears, assisted in the bottle department of the Royal Hotel at Granville, drew a clear distinction between "Smirnoff" vodka and "Pierre Smirnoff" vodka. He said that he has asked customers which one they wanted and "they have said 'Pierre'". "Pierre Smirnoff" vodka, he agreed, was fairly popular. Wright said that he was afraid he could not answer the question whether in the trade Gilbey's vodka was known as "Pierre Smirnoff" vodka. Doyle, one of the wine and spirit merchants, said that "in the trade when you speak of 'Pierre Smirnoff' you mean Gilbey's vodka" and that had been so ever since he had handled the appellant's product in common with that of the respondent. According to him, customers were accustomed to distinguish between "Smirnoff" and "Pierre Smirnoff" vodka. Swailes, who seems to have handled both the appellant's and the respondent's products since they came onto the market, also drew a clear distinction between them. Some customers, he said, "want 'Pierre Smirnoff' and some 'Smirnoff' vodka" and he added that when asked to supply "Smirnoff" vodka he would ask whether "Pierre" or "Smirnoff" was required. (at p419)

21. In the ultimate analysis the broad question in the case is whether the correct conclusion upon the evidence is that the appellant passed off its own goods as the goods of the respondent. And since the only basis for the complaint that it did so is that the words "Pierre Smirnoff" appeared on the labels of the appellant, we are obliged to inquire whether, in the circumstances, the name "Smirnoff", in April 1954, had come, in New South Wales, to mean the respondent's product. If it had we should think the contention would be well open that the use by the appellant of the name "Pierre Smirnoff" would have been likely to induce the belief that its product was that of the respondent. But in our view the evidence in the case fails to establish the necessary reputation in New South Wales for the respondent. As we have pointed out the use of the expression "Formula of Peter Smirnoff", in relation to the liqueur products of the respondent and its predecessors, during the years from 1943 to 1953 is of little, if any, significance in the case. Such evidence, as there is, of the trade during this period tends to indicate that it was neither substantial nor widespread and that the use made of the name "Peter Smirnoff" was not calculated to identify the product of the respondent and its predecessors exclusively with that name. As far as the use of the name "Smirnoff's" in relation to the respondent's trade in vodka itself is concerned the period from March 1953 to April 1954 is comparatively brief. Moreover, although 10,000 bottles were said to have been sold in 1953, by far the bulk of the sales was made in and about Sydney. The balance was sold to hotels and a few wine and spirit merchants in a handful of country centres. In all, between 140 and 150 members of the trade made purchases in 1953 but this was not, in our view, a significant section of the trade. Again, of those who made purchases in that year more than half had not previously made purchases from the respondent of its liqueurs made according to the formula of "Peter Smirnoff". Of those who purchased vodka in 1953 more than one-third did not make any purchases in 1954 so that we are left to speculate as to how much "Smirnoff's Famous Vodka" reached the consuming public in 1953. The detailed trading figures which were tendered in evidence also throw some light on the business done in 1953 and 1954 by those hotels and wine and spirit merchants whose employees were called as witnesses at the hearing. The hotel which Llewellyn managed purchased a mere 24 bottles in 1953 and, in 1954, 145 bottles. The hotel at which Lange was employed bought 117 bottles in 1953, 111 in 1954, and none thereafter till 1957. The hotel where Poland officiated was one of the larger customers in 1953; it bought 228 bottles during that year and 144 in 1954. The Metropolitan Hotel at Maitland where Wright worked bought 42 bottles in 1953, 66 in 1954, 24 in 1955 and 12 in 1956. The figures for the wine and spirit merchants who were called to give evidence were Doyle, 162 bottles in 1953 and 159 in 1954; Swailes, 160 in 1953 and 130 in 1954; and Scala, 210 in 1953. To our minds the evidence of these witnesses was quite inadequate to establish the necessary reputation for the respondent particularly when it is borne in mind that the Australian Brewing and Wine Journal, to which reference has previously been made, circulated in, or at least in some sections of, the trade. Finally, there is the evidence that "Smirnoff" vodka had long enjoyed an extensive reputation overseas and that the potential market for the respondent's product in 1953 was provided by a class of persons to whom that reputation was said to be already well known. We do not wish to suggest that because "Smirnoff" vodka enjoyed a wide overseas reputation it was not possible for the respondents product to become identified exclusively with that name in New South Wales. Cases such as Roberts Numbering Machine Co. v. Davis (1935) 53 RPC 79 and Sturtevant Engineering Co., Ltd. v. Sturtevant Mill Company of U.S.A. Ltd. (1936) 3 All ER 137 are, of course, classic authorities to the contrary. But these were somewhat special cases and in each it appeared that there had been such a long and exclusive use of the name in question by the local trader in England that its use there by any other person was likely to induce the belief that his business was that of the local trader (cf. Dental Manufacturing Company, Limited v. C. De Trey & Co. (1912) 3 KB 76 and Imperial Tobacco Company of India, Limited v. Bonnan (1924) AC 755) The reason why we have referred to the long-established European reputation of "Smirnoff" vodka is because it is reasonable to infer from the evidence that vodka under that name was already well known to many of those whose immigration into this country provided the primary market for the respondent's product. That being so, it is highly probable that vodka sold as "Smirnoff" or "Smirnoff's Vodka" enjoyed some reputation in this market quite independently of the respondent's product. Taking this circumstance into consideration with the other matters to which we have referred we find ourselves forced to the conclusion that the respondent failed to make out a case for the relief which it sought. Accordingly, the appeal should be upheld on this ground and, that being so, we find it unnecessary to consider the other defences which were raised by the appellant. (at p421)

ORDER

Appeal allowed with costs. Order of the Supreme Court discharged and in lieu thereof order that the suit be dismissed with costs.