CATCHWORDS
TRADE PRACTICES - character merchandising - application to restrain the promotion of or dealing with a particular product - application to restrain the use of the name "Duff" or any deceptively similar name in relation to beverages - application to restrain any representation that the "Duff" beer product is the product of the producers or creators of "The Simpsons", or that it is produced with the sponsorship or approval of the creators or producers of "The Simpsons"- whether "confusion" or "cause to wonder" are sufficient - confusion accompanied by intention will more readily lead to the conclusion of misrepresentation or deceptive conduct - implicit representation that "Duff Beer" produced by the breweries is an embodiment of the fictional beer from "The Simpson" series - a substantial section of the consuming public will be misled into believing that the beer marketed by the breweries is sanctioned or permitted by the applicants - artificial to anticipate that a person buying the product would take the time to analyse the subtle legal overtones - extensive merchandising by "The Simpsons" producers is significant - consumer belief in sanction by "The Simpsons" producers not due to an "erroneous assumption" - no disclaimers - insufficient disassociation from the applicants.
PASSING OFF - Whether the product has derived from advertising a distinctive character which the market recognises - whether there is a "secondary meaning" which is conveyed to consumers - increased consumer sophistication with respect to commercial merchandising - unnecessary that public should know precise identity of applicants to establish passing off - not necessary to establish common field of activity - "Duff" does have a powerful secondary meaning - the attractive features arise from an association with "The Simpsons" - intention to take advantage of the goodwill of another allow the Court to more readily infer a probability that plaintiff might suffer damage - intention to exploit the association with "The Simpsons" series - not necessary to show an overt connection - the name "Duff" alone would evoke a powerful association - consumer evidence not essential.
Trade Practices Act 1974 (Cth) ss 52,53
Susan M Crennan QC, "The Commercial Exploitation of Personality" (1995) 8 1PLB 129
Cadbury-Schweppes Pty Ltd v Pub Squash Co Ltd (1980)
2 NSWLR 851, cited
Apand Pty Ltd v The Kettle Chip Company Pty Ltd (1994)
52 FCR 474, cited
Radio Corporation Pty Ltd v Disney (1937) 57 CLR 448, applied
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, cited
Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460, cited
Fido Dido Inc v Venture Stores (Retailers) Pty Ltd (1988)
16 IPR 365, applied
Dodd's Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261, cited
The Kettle Chip Company Pty Ltd v Apand Pty Ltd (1993)
46 FCR 152, cited
Australian Guarantee Corporation Ltd v Sydney Guarantee Corporation Ltd (1951) 51 SR(NSW) 166, cited
Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1988) 84 ALR 437, cited
Henderson v Radio Corp Pty Ltd (1960) 60 SR(NSW) 576, cited
Newton-John v Scholl-Plough (Aust) Ltd (1986) 11 FCR 233, cited
10th Cantanae Pty Ltd v Shoshana Pty Ltd (1988) 79 ALR 299, cited
Hogan v Koala Dundee Pty Ltd (1988) 83 ALR 187, cited
Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553, applied
Honey v Australian Airlines Ltd (1990) 18 IPR 185, cited
Talmax Pty Ltd v Telstra Corporation Ltd (unreported, 14 March 1996, Byrne J, Supreme Court of Queensland), distinguished
Erven Warnink Beslooten Vennootschap v J Townend & Sons (Hull) Ltd (1979) AC 731, applied
TWENTIETH CENTURY FOX FILM CORPORATION and MATT GROENING PRODUCTIONS INC v THE SOUTH AUSTRALIAN BREWING CO LTD and LION NATHAN AUSTRALIA PTY LTD
No NG 155 of 1996
Tamberlin J
Sydney
17 May 1996
IN THE FEDERAL COURT OF AUSTRALIA)
NEW SOUTH WALES DISTRICT REGISTRY) No. NG 155 of 1996
GENERAL DIVISION )
BETWEEN: TWENTIETH CENTURY FOX
FILM CORPORATION
First Applicant
MATT GROENING PRODUCTIONS
INC.
Second Applicant
AND: THE SOUTH AUSTRALIAN
BREWING CO LTD
First Respondent
LION NATHAN AUSTRALIA
PTY LTD
Second Respondent
CORAM: TAMBERLIN J
PLACE: SYDNEY
DATED: 17 MAY 1996
REASONS FOR JUDGMENT
TAMBERLIN J:
Nature of the Application
This application is brought by Twentieth Century Fox Film Corporation ("Fox") and Matt Groening Productions Inc ("Groening"), (which I shall refer to collectively as "the producers") to restrain the South Australian Brewing Co Limited ("SABCO") and Lion Nathan Australia Pty Limited ("Lion"), (which I shall refer to collectively as "the breweries") from promoting or dealing with any product in the form of a can, (the " breweries' can") with the wording, get-up and name as illustrated below. The basis of the claim is that such activities are said to constitute deceptive conduct and breach the Trade Practices Act 1974 (Cth) ("the Act"), and also to falsely pass off the breweries' can and product as being associated with "The Simpsons" television series.
The Breweries' Duff Beer Can
"The Simpsons'" Duff Beer Can
The producers also seek to restrain the breweries from using the name "Duff" or any deceptively similar name, in relation to beverages and from representing that:
(a) The "Duff Beer" they produce is the product of the producers,
(b) The "Duff Beer" which they produce has the sponsorship or approval of either or both of the producers,
(c) The breweries have the sponsorship and approval of either or both of the producers.
Other remedies sought include delivery up of documents and materials which carry the name "Duff Beer" or "Duff" and also all unsold "Duff Beer" stock, together with damages or an account for profits.
These reasons for judgment are concerned with the question of liability and not with the grant of final relief.
"The Simpsons"
Groening and Fox are United States Corporations, organised and existing under that Law. Groening is owned by Fox. Groening is the employer of Matt Groening who is the creator of the characters, stories and titles which comprise the animated television series, known as "The Simpsons". Fox is the maker and producer of "The Simpsons" television series.
The central characters of "The Simpsons" comprise a somewhat dysfunctional family. "Homer Simpson", the father, is a world famous and well-recognised television character. "Homer" is married to "Marge". They have three children, a son "Bart", his younger sister "Lisa", and an infant "Maggie". "Homer" is also given a father and two formidable sisters-in-law, Selma and Patty, to fill out the family tree.
Each member of the family has a strong and distinctive image, character traits, habits, and levels of intelligence. "Homer" and "Bart" (unlike the female family members), could not be described as endowed with much intelligence, taste or common sense. "Homer" is depicted as inept and bumbling but good natured. His preferred drink is "Duff Beer". His attachment to this beer is a prominent characteristic of his fictional personality. He is regularly depicted clutching or consuming this beer, on occasions, in copious quantities. It is fair to say that the beer and its consumption are not shown in a favourable light.
In 1989, Matt Groening conceived the name "Duff" as the name of an imaginary beer which would be associated particularly with "Homer" and also with his "bar-fly" friends and associates. Depictions and references to "Duff beer" pervade many of the animated cartoon episodes, which comprise the series.
The evidence is that "Duff Beer" appears in nearly all episodes of the series broadcast in Australia up to April 1996, with varying degrees of prominence. These appearances range from the common scenario of "Homer" going to the refrigerator to pull out a can of "Duff Beer", to "Homer" and his friends sitting in "Moe's Bar" ordering "Duff Beer". There is one whole episode substantially devoted to the theme of "Duff Beer" ("Duffless") and the name "Duff" features prominently and repeatedly in another 22 minute episode, "Selma's Choice". "Duff Beer" is assigned an important role in the series viewed as a whole.
The series was first screened on television in Australia on 10 February 1991, and has been regularly broadcast and repeated nationally since that date during prime time through to the present. Exhibit B lists broadcast dates and times in relation to the broadcast of specified episodes of "The Simpsons" and it is quite clear from this comprehensive list that the series has achieved wide coverage, deep market penetration, and broad recognition. Other evidence shows wide recognition among the 18 to 25 year age group.
In addition to the publicity generated in relation to the "The Simpsons", since 1989 Fox has licensed the use of the characters' names and images which appear in the series for use on, and in relation to, a wide range of merchandise, which has been extensively promoted and sold throughout Australia.
The merchandise comprises T-shirts, caps, sweat shirts, tank tops, ceramic mugs, trading cards, greeting cards, mouse pads, swim wear and canvas show bags to mention only a few. It is proposed to license and market boxer shorts and other goods depicting characters from the series.
Licensed merchandise relating specifically to "Duff Beer" and sold prior to the hearing date, include T-Shirts and caps marketed by "Top Heavy Pty Limited".
The merchandise contains references to copyright and to the reserved rights of Groening or Twentieth Century Fox.
In Australia and New Zealand "Duff Beer" caps sold over 900 units between October 1995 and April 1996. T-shirts showing "Duff Beer" have been sold during various periods between January 1995 through to April 1996 in Australia and New Zealand, in the order of 24,000.
In addition, comics of "The Simpsons" have been sold in Australia since June 1994. One of these comics entitled "The Amazing Colossal Homer!", a story about "Duff Beer" and the "Duff Brewery" was sold in Australia from 22 June to 27 July 1994. Approximately 15,900 copies were sold. Another comic relating to "Duff Beer" was sold from 24 January to 21 February 1996. Approximately 26,300 copies were distributed to retailers. The 1996 "Simpsons' Diary" which contained nine specific references to "Duff Beer' has been sold throughout Australia since 30 November 1995, and is still on sale. Fifty thousand of these have been distributed to retailers.
The inroads made by the series into consumer consciousness has therefore taken place at many levels and in many different ways.
The producers claim, and I accept, that the series has acquired substantial goodwill and reputation in Australia in relation to the characters, names and images appearing in "The Simpsons" including the name "Duff Beer".
In about November 1995, the breweries launched and promoted a beer, using the name "Duff Beer" in the get-up and style depicted above as the breweries' can.
The producers say that by manufacturing, promoting and selling beer under and by reference to the name "Duff Beer", the breweries have represented that the product is made with the permission of the producers, when the true position is that no such licence or permission has been granted.
The producers also allege that the breweries adopted the name "Duff Beer" and the get-up and style in the knowledge and for the reason that the name "Duff Beer" had acquired a substantial reputation as a consequence of its association with "The Simpsons" and that the breweries intended to exploit that reputation in relation to their beer product.
Producers' Evidence
The breweries began to sell the beer in various States during November and December 1995 and January 1996. They propose to continue to sell "Duff Beer" for a limited time.
Fox has licensed the Australian television broadcast rights in "The Simpsons" to its subsidiary, Twentieth Century Fox Film Corporation (Australia) Pty Limited, which has in turn licensed these rights to Network Ten. A substantial percentage of Fox's merchandising revenue is merchandising accounted for by "The Simpsons". Strict quality control standards are maintained by reviewing licensed products at several stages from concept through to final execution. Licensees are required to adhere to an approval process to maintain character and graphics integrity.
Fox has consistently refused to grant licences to parties who have sought to use "The Simpsons" in connection with alcohol and tobacco products, or other substances considered detrimental to children.
Fox or its licensee, Gaffney International Pty Ltd ("Gaffney"), has licensed merchandising rights to a number of licensees in Australia in relation to "The Simpsons" since the inception of the merchandising program up to 16 February 1996 and continues to do so.
Fox has received a substantial sum in respect of merchandising royalties attributable to sales in Australia under its world-wide licences.
"Homer Simpson" is sometimes shown to drink a beer called "Fudd". Phonetically, this is the reverse of "Duff". It features much less frequently than "Duff" in the series.
One episode of "The Simpsons" is devoted to the subject of "Duff Beer". This was known as "Duffless" and was first broadcast in Australia on 24 April 1993. There have since been several repeats.
A further 23 episodes of "The Simpsons" feature "Duff Beer".
In addition to television broadcasting and merchandising of "The Simpsons", Fox has sold in Australia, through Twentieth Century Home Entertainment Inc, one of its subsidiaries, video compilations each of which contain two episodes of "The Simpsons". From 11 November 1991 to February 1996, over 90,000 units of "The Simpsons" videos have been sold in Australia. Of the 24 episodes contained on the 12 videos, five episodes featured "Duff Beer".
In his affidavit Matt Groening, the creator of the series, states that in creating "The Simpsons", he devised a number of secondary characters and products, which he envisaged would form a consistent continuing and essential part of the program. This was done to make a more complete fictional "universe" for the program and the characters. The concept of the beer, which "Homer Simpson" would drink, was meant to have a specific name, label and design, so that it would be readily identifiable with the characters within the program, and for the purpose of merchandising and licensing of the program and its characters. He briefed the animation company responsible for drawing "The Simpsons'" images to devise some alternative designs of "Duff Beer". The final result was a depiction of "Duff" as it has appeared since early 1990 and still appears in "The Simpsons". A copy of this appears above.
It will be noted that the basic colours are red, black, white and yellow and the name "Duff" is lower case and in rough cartoon handwriting form. Matt Groening says that he devised the name "Duff" for "Homer Simpsons" beer, and that it was intended to be to be a play upon a number of US beers which have just one syllable, such as "Budd" and "Blitz". The "Duff Beer" concept is integral to the character of "Homer Simpson", it is not just a prop. He considers that "Duff Beer" is not shown in a glamorous light. Although it is integral to the character of "Homer", its effects on him are not depicted in a pleasant or appealing way. Mr Groening says that in 1990 and 1994, he discussed the question of licensing a beer called "Duff" but decided not to give permission to such a proposal due to his concern that it might encourage children to drink alcohol. His concern arose from the fact that children formed a significant portion of the audience for "The Simpsons". He adopted a similar attitude in relation to the possibility of merchandising cigarettes.
The name "Duff Beer" occasionally appears in the series, on a bottle with the name "DUFF BEER". However, by far the predominant use is in the form of the can depicted above.
Included in the material tendered were also "The Simpsons'" comics which in some cases prominently depict "Duff Beer".
References to "Duff Beer" in the television series are not prominent in all the programs. In a couple of programs, references to "Duff Beer" occur quite frequently and prominently. However, in most of the programs, where it is shown, the depiction varies in form, from a large brewery sign on the wall in a bar frequented by "Homer" and his "boozy" friends; to bill-boards at baseball or football games, score boards on stadium walls and tankers which carry large cylinders of "Duff Beer". It appears on cans scattered around the living room, on the sofa or on the floor, or grasped by "Homer" when watching television. His friends are sometimes shown clutching or drinking from a "Duff Beer" can.
The evidence clearly establishes that throughout the series there is a clear and pervasive association of "Duff Beer" with "Homer" and other characters such as "Barney", his friend.
The market penetration of the program is extensive. The number of times on which the program has been broadcast from 1991 to date in prime time slots are eloquent as to the drawing power and attractiveness of the program. Mr John Grono, a client Service Manager, employed by A C Nielsen Australia Pty Ltd (Nielsen), since 1977, sets out the ratings and audience figures for "The Simpsons" during 25 April 1993 (when "Duffless" was broadcast), through to and including January 1996. Ratings are an estimate of the percentage of the given audience watching a particular program at a specified time. Audience figures are an estimate of the absolute number of the given audience watching a particular program. On the figures recorded by Nielsen, the ratings are consistently high, with respect to both males and females in the 16-24 year age group. The target age range for the breweries' promotion of "Duff Beer" is the 18 to 25 age group. Broadcasts have been made by the Ten Network Stations and affiliates in most if not all states.
Respondents' Evidence
The principal witness for the respondents was Mr Jonathon Cole ("Cole") who is the "Director of Innovation" for the second respondent. He is responsible for creating new ideas for products to be launched in Australasia, including beer and soft drinks. In March 1994, he was appointed General Manager of Pepsi in Perth, and on 6 September 1995 he started work as Director of Innovation at the second respondent. In addition, to growing and marketing beer in Australasia and internationally, the second respondent has substantial interests in producing and marketing soft drinks in Australia, including the Pepsi line of products. Cole says the 18 to 25 year old market is a particular important market to the breweries. Drinkers are more experimental and are exploring their taste preferences as they are only being introduced to alcohol for the first time. Drinkers in this group want to appear different. This is particularly true of drinkers in the 18 to 22 age bracket.
Cole has become familiar with the beer market in Australia. One feature of this market is the increasing marketing emphasis on particular brands of alcohol. One of the recent success stories, he says, against the target market, has been the creation of alcoholic sodas, which have trendy names, such as "XLR8", an alcoholic soda with cola and guarana, "Two Dogs", an alcoholic lemonade, "E33" an alcoholic soda and "Razorback", an alcoholic cider. These products have unusual, non-mainstream labels and associated promotion. Cole refers to "Vault", launched in September 1995, aimed specifically at the 18 to 25 year old group. He was involved in this launch and he considered marketing proposals, advertising material and development of the product. From this he gleaned experience about the 18 to 25 year old age group.
According to Cole the 18 to 25 year old market desires to appear different and experiment with different products. They have an interest in "irreverent product propositions". He says the marketing of "Vault" tended to be aggressive, "in your face", irreverent and also very unusual. He gives an example of using a metal neck collar around the neck of "Vault" and a body piercing theme in the advertising. These strategies hit a "chord" with the "leading edge" younger consumers in the 18 to 25 year old group, in that the drink met volume and profit objectives. Cole uses the term "leading edge" to mean persons who lead and influence opinion and drink in trendy hotels and bars, in areas like Paddington in Sydney.
Another feature noted by Cole in relation to the target group, was that they to tend to be discerning and tend to see through marketing gimmickry and not be led around by it. In his view they are the hardest part of the market to succeed with and some luck is needed to strike a "chord".
At this stage, I pause to observe that "The Simpsons", particularly "Homer" and "Bart", can be generally described as irreverent and also very unusual. In fact, a favourite expression used in the series by "Bart" is "Eat my shorts", a somewhat "irreverent" expression which, on Mr Cole's evidence, would tend to have a strong appeal to the targeted 18 to 25 age group. This expression features in some of the licensed merchandise material.
Development and Research of "Duff Beer" by the breweries.
Cole first heard of a beer under the name "Duff" in September 1995. The idea at that stage was being considered by the New Products Development Group at Lion. He says that he was not aware of the fictional "Duff" beer used on "The Simpsons", but later became aware of its use.
His evidence is that "Duff" beer was one of a number of proposals under consideration for what were described as "hot" beers, "concept" beers or "maverick" beers. That is to say, a beer that is trendy for a year and then becomes outdated. On the marketing thermostat the name "Duff" is at the same time both "hot" and "cool". He looked at a number of other names apart from "Duff" (some of which were discarded).
Prior to early September 1995, Lion had carried out some initial research into the "Duff" beer proposal. This research was "qualitative" research, used by marketing professionals to help them gauge the likely reaction of target markets to product and advertising promotion. It is not statistically accurate but is regarded as useful in obtaining feedback from the target consumer group as to the their reactions to various deigns, names, and product concepts. The previous research report used two focus groups of approximately 7 to 10 consumers, all of whom were males. The report is referred to in Exhibit "JC9" and is entitled "New Product Concepts including New Generation Drink, Exploratory Market Research, August 31 1995". It was conducted by Riley Research Pty Limited. It is common ground that Ms Barbara Riley-Smith, who worked on this research and advice is an experienced and respected expert in assessing potential market effects of promotional material.
This exploratory research report considered a number of alternative new products, three of them involved beer and the other comprised different types of drinks. Both groups comprised males 18 to 25 years old, described as "fashionable, trendy, Eastern and Northern suburbs skew, working, up-market, and affluent". One group comprised drinkers of beer at least once a week and the other drinkers of spirits at least once a week. The focus groups were conducted on 29 August 1995.
The key findings in relation to "Duff Beer" recorded that the concept had a very strong consumer appeal as a novelty, a fad or a one hit wonder, which generated laughter and wonderment. The response was described as "a wow" response.
The findings noted that almost all the respondents were highly familiar with the television series, "The Simpsons" and instantly recognised the product as drunk by "Homer Simpson" and considered it was one which would have to be tried. The product quality expectations were not high. The concept of "Duff Beer' was seen as a "joke", a "bit of a trick", or a "vehicle for fun".
A large number of the beer drinkers claimed they would try it. The research claimed, "it is a symbol of the whole attitude/lifestyle that makes The Simpsons such a popular program with this age group". The researchers observation recorded that the product had a strong market potential.
The can get-up used with the August 29 focus groups was similar to that depicted in "The Simpsons" (the red can). The dominant colours were red, white and black, and the word "Duff" was in a crude handwritten form as seen on the actual television series. Later there were introduced a range of labels and two mock-up cans, which varied the colour and get-up. In these cans, the colours were yellow, black, some red and white. The word "Duff" was not in black hand-written form, but was in lower case.
The yellow can which was finally selected is illustrated earlier.
Cole considered that if the red can appearing in "The Simpsons" program were used, it could mislead consumers.
In addition to the Sydney focus group study in August, further research was performed with groups in Perth, Sydney and Adelaide.
There were two research sessions in Perth on the evening of 9 October 1995. One group comprised 18 to 21 year olds and the other 22 to 25 year olds.
The Perth research again involved two focus group discussions and considered a range of products directed at the 18 to 25 year old male beer drinker. The Report records as follows:
"The concept which has greatest immediate appeal for this target market is Duff beer. The beer can rely on widespread popularity of The Simpsons among this age group. It will need little, if any, promotion to generate trial.
....
Advertising that builds on The Simpsons for Duff is clearly the most appropriate. In particular, the hallmark of Homer -Mmmmmmm Beeeerrr - is appreciated."
The Report goes on to record that:
" ... However, the strong appeal and widespread popularity of The Simpsons guarantees immediate trial and support of a beer called Duff."
Later, after referring to other proposed products, the Report records that:
"In contrast, Duff Beer will need no support to generate trial."
In a section dealing specifically with "Duff Beer" the Report states:
"To say that a Duff Beer brand would generate interest would be an understatement: the target market will not be able to leave this can on the shelf.
The Simpsons appear to enjoy widespread, if not universal, popularity. It has the ultimate credential - it is 'cool'.
A beer which is based on The Simpsons will need little, if any, promotional support. This product seems to be in tune with the market:...." (Emphasis added)
The Report continues:
".... Duff beer may be a fad which is as quickly forgotten as it is trialled. A lot of its appeal is due to its novelty. A novelty eventually wears off. Maximising the life of Duff beer will depend on promotional support as well as the product taste."
Finally the Report records:
"The most effective advertising approach is the one which uses wording typical of The Simpsons; Mmmmmmmmmmm Beeeerrr."
This approach was actually suggested on an unprompted basis by one group participant and all participants strongly agreed. It is important that Duff beer is related to The Simpsons in whatever way is possible and is in keeping with the light-hearted nature of the television show". (Emphasis added)
Further research was conducted in Sydney and Adelaide in the period 11-16 October 1995 by Consumer Contact. It again refers to a number of new product ideas, including "Duff".
By the time of the research in October 1995 a decision had been taken to abandon the use of the red can with the cartoon handwriting of "Duff".
Five focus groups were conducted in Sydney. The groups varied in ages but the lowest was 18 and the highest was 25. Two focus groups were conducted in Adelaide. The Sydney group included a cross-section ranging from, "fashionable, trendy, second-level hip to mainstream", and included more blue collar respondents. All respondents were primarily beer drinkers who drank at least the equivalent of 5 stubbies per week.
"Duff" was concluded to have "very strong potential". It is described as having "considerable consumer appeal". It was especially strong in the Adelaide research and among more mainstream beer drinkers. It was said that the brand would carry its own momentum and was likely to be a short term hit requiring little marketing support. There is then some discussion of the label. It was considered that it could run the risk of looking too childish or cheap. The red and yellow combination was considered to have the potential to remind the target of "XXXX" a Queensland beer. The subtle effects of variations in appearance, is illustrated by the observation in this Report, that if the name "Duff", "is rendered in a way that is too straight, too serious, the whole concept starts to get lost". Accordingly, it was considered that a version with capital letters, "DUFF", could lead to a departure from the "mood" of the brand to the point of rejection. The Report records that:
"Our attempts to portray Duff as a brand without any association with the Simpsons (by using alternative meanings from the Dictionary) also doesn't work as it removes the brand from its source of current franchise and its fun positioning. The link with the Simpsons need not be overt - the target already assume this and the new brand can be just presented as it is, to the public at large." (Emphasis added).
The above advice indicates that it was considered essential to preserve the association with "The Simpsons" and not remove the name from its "source of current franchise" (ie "The Simpsons") and that its "fun positioning" was gained from that association. One way this might occur was to show the name as "DUFF". This was not chosen because it could diminish the vital nexus with the series. The reference to the link with "The Simpsons" not being necessarily "overt" again illustrates the subtle way in which the connection is sought to be triggered by exploitation of the word "Duff" alone. The remarks show that those advising the breweries considered the ground had already been laid by the promotion of "The Simpsons" for the target audience to make an immediate association with "The Simpsons".
The evidence indicates that the cans shown to the Perth and Adelaide groups in mid-October 1995, included the get-up label and brand name as finally selected and presently before the Court, namely the "breweries' can".
Exhibit D comprises transcripts of the focus groups. In the Sydney group conduced on 29 August 1995, 11, 12 and 14 October 1995, there are two questions asked by participants; one relating whether copyright exists and the other whether royalties would be paid. This was in a context where the yellow can with red lettering was before the group. In the case of the reference to royalties, the interviewee was identified as a 24 year old accountant and it was therefore suggested by the breweries that there was an element of special knowledge, which could put this inquiry into a non-typical category. In relation to the other question, concerning whether copyright would have to be paid on the "Duff Beer", the interviewee was not identified.
The transcripts generally support the existence of a strong and immediate connection in many instances between "Duff Beer" and "The Simpsons". One interviewee, summed up the nexus as:
"I reckon it'd be good for a while ... like Duff beer ... like it's like Homer, but I reckon it would die."
Another interviewee said:
"You wouldn't really drink it out of a keg because you wouldn't know it's Duff. You just want to carry it in a can (laughter)."
On 12 October 1995, an interviewee, on being asked his reaction, said:
"I thought it was like, a copy of 'The Simpsons'."
Mr Cole expresses his concern to ensure that "Duff Beer" was different to the label used for "McLeay Duff' Scotch whiskey. However this evidence seems to me, to have no significance, because there is no suggestion of any confusion with McLeay Duff whiskey or that the word "Duff" would generate any association with whiskey.
On 18 October 1985 Lion approved the launch of Duff Beer, using the yellow beer can.
The beer was launched in various states between 20 November 1995 and January 1996. It is sold in cartons containing 24 cans. It was distributed under the "Razorback Beverages" name as this was the business chosen by Lion to market new "hot" products to the 18 to 25 year old age group. There were no television, radio or newspaper promotions of "Duff Beer" by Lion, although there was some point of sale material. This referred to the name "Duff Beer" but did not have any images from the program or use the words "The Simpsons".
Mr Cole states that letters were sent to liquor retailers, to the effect that "another Duff Beer" features in "The Simpsons" TV show and that this is a completely fictitious product. Retailers were "encouraged" to not use "The Simpsons" imagery or logos in supporting "Duff Beer" as these were not owned by Lion and there may be risk of infringing legal copyright. There were communication responses prepared "emphasising" that the beer was not in any way related to, nor associated with any fictitious characters, products or TV cartoons. There is no disclaimer on the can to such effect.
There is no express statement to the effect that the "Duff Beer" is a licensed product.
Legal Principles
It is well settled that a word which has an ordinary dictionary meaning can become distinctive of a particular trader as well as having its primary dictionary denotation. The tort of passing off is wide enough to include descriptive material such as slogans or visual images which television advertising campaigns might lead the market to associate a trader with a product. The test is whether, for example, a product has derived a distinctive character which the market recognises. See Cadbury-Schweppes Pty Ltd v Pub Squash Co Ltd (1980) 2 NSWLR 851 at 858 per Lord Scarman.
In the present case, the word "Duff" cannot be said to be descriptive of the beer's qualities but even if it were descriptive, a secondary distinctive meaning might in some circumstances be established. See Apand Pty Ltd v The Kettle Chip Company Pty Ltd (1994) 52 FCR 474, where it was argued that the word "kettle" could refer to the method of manufacture.
Once a secondary meaning is established the fact that there may be a descriptive dictionary meaning will not of itself defeat a claim for passing off. The relevant question is whether the use of the word or name will convey the secondary meaning to consumers.
The name or word under consideration does not have to be associated with goods manufactured by the trader. In Radio Corporation Pty Ltd v Disney (1937) 57 CLR 448 (the Mickey Mouse Case) at 453, Latham CJ in relation to the names "Mickey Mouse" and "Minnie Mouse" considered that these were:
".... so closely associated in the public mind, with ... Walter E. Disney and his activities, that the use of either the names or the figures in connection with any goods at once suggests that the goods are 'in some way or other' connected with ... Disney."
So that, a name without an image may be sufficient to suggest an "association".
In the same case, Rich J at 454 said:
"In matters such as this we are dealing with the vague and indefinite impressions of the great mass of the public who neither are required nor desire to refine upon distinctions of this sort. To them it is shown that the name 'Walt Disney' summons up a picture of 'Mickey Mouse' and the picture of Mickey Mouse reminds them of 'Walt Disney'. The foundation of this is authorship no doubt. But somehow or other, how, it is fruitless to inquire, they connect the appearance on an article of the name or form of 'Mickey Mouse' with 'Walt Disney'. This being so, it is, I think, impossible for the appellant to negative all likelihood of confusion. It is no part of our duty to state in definite terms precisely how the public will be misled or what kind of connection they will impute. Confusion involves indefiniteness of ideas." (Emphasis added)
Dixon J, referring to the words "Mickey Mouse", said at 457;
"I find it hard to believe that the use of the words on or in connection with a radio receiving set would produce any other impression than in the case of most of the other almost innumerable classes of articles to which the name or representation of Mickey Mouse has been applied. That impression does not, I think, primarily relate to the origin, selection or treatment of the goods. The reason for using the names is to attract the attention of members of a public that has found pleasure and amusement in the grotesque forms and absurd antics of Disney's creatures, and at the same time to give to the goods a name or means of description at once familiar and pleasing or interesting to the possible buyer. No doubt this means that the trader makes use of elements which belong to the reputation and fame of Disney's creations and it may be that in some vague way the buyer supposes that Disney must have sanctioned it."(Emphasis added)
That decision was given over six decades ago and it is important to bear in mind the great developments in broadcasting, advertising and merchandising during those decades. Nowadays, the public must be considered to be more sophisticated and aware with respect to character and personality merchandising than 60 years ago. Today there is clearly greater familiarity with licensing of products so that public awareness of the nature of the "sanction" to which Dixon J adverts is significantly more focussed than in 1937.
Although the Disney case was concerned with trade marks where "confusion" is the relevant test, the principles expressed are relevant to passing off and proceedings under the Trade Practices Act and have been so applied.
In a deceptive conduct case it is not enough to establish that the conduct complained of was merely confusing or caused people to wonder whether two products may have come from the same source. Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198, 209. Some later decisions suggest that where the confusion is accompanied by an element of intention there is merit in the view that the Court will more readily conclude there has been a misrepresentation or deceptive conduct. See Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460 at 473-5.
Character merchandising has been recognised as attracting the protection of the law in a number of recent cases.
In Fido Dido Inc v Venture Stores (Retailers) Pty Ltd (1988) 16 IPR 365, Foster J said at 371:
"With some hesitation, I have come to the view that it is reasonable in this day and age to assume a state of knowledge in the buying public that characters appear in character merchandising as a result of some system of at least sponsorship or approval by a character himself in the case of a living person, or the owner of a character in the case where it is inanimate." (Emphasis added)
That case concerned a stick-like cartoon character known as "Fido Dido". The applicants were in the business of licensing the "Fido Dido" image in relation to garments. The respondents advertised and offered for sale garments which were considered deceptively similar to "Fido Dido" range. It was held that the fictional character had acquired sufficient reputation and goodwill in Australia to be capable of being damaged by passing off and that it was unnecessary that the public should know the precise identity of the applicants to establish the tort of passing off. His honour observed that the doctrine of common field of activity was not necessary but in any event it did exist in that case. Accordingly his Honour granted an interlocutory injunction.
In modern times there have been a number of cases which considered whether in particular circumstances the protection of law should be given to particular examples of character merchandising. See Henderson v Radio Corp Pty Ltd (1960) 60 SR(NSW) 576 (the ballroom dancing case); Newton-John v Scholl-
Plough (Aust) Ltd (1986) 11 FCR 233 (the Maybelline case); 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1988) 79 ALR 299 (the Sue Smith case); Hogan v Koala Dundee Pty Ltd (1988) 83 ALR 187; Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553 (the Crocodile Dundee case); Honey v Australian Airlines Ltd (1990) 18 IPR 185 (the Gary Honey case) and Talmax Pty Ltd v Telstra Corporation Ltd (Byrne J, unreported, Supreme Court of Queensland, 14 March 1996), Byrne J (the Kieran Perkins case). A number of these decisions are helpfully discussed in an article by Susan M Crennan QC in "The Commercial Exploitation of Personality" (1995) 8 IPLB 129.
Secondary Meaning
In this case, it is clear that the name "Duff" has acquired a powerful secondary meaning when used in the collocation "Duff Beer".
An examination of the dictionary meanings of the word "duff" is not particularly helpful. The word is used in relation to golf to refer to striking a ball clumsily or failing to play a shot. The word "duffer", which is perhaps more relevant, connotes a plodding, stupid or incompetent person. However, in my view it would be artificial in the extreme to suggest that consumers would be attracted by the concept of "Duff" on the basis of its dictionary meaning.
Indeed, one of the expert advertising research reports specifically advised against using other dictionary meanings of the word "duff" when it advised:
"Our attempts to portray Duff as a brand without any association with the Simpsons (by using alternative meanings from the Dictionary) also doesn't work as it removes the brand from its source of current franchise and its fun positioning"
The word "Duff" does not describe the contents of the product nor on the evidence does it conjure up connotations of being "fun", "cool" or "trendy". These key attractive features arise from the association with "The Simpsons" and not from any literal dictionary meaning of the word "duff."
The present case is not analogous to the Solar Tint case, (Dodd's Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261), where the Full Federal Court held that the applicants had failed to establish a distinct or secondary meaning for the essentially descriptive words "solar tint" in connection with their services. See also The Kettle Chip Company Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 and on appeal Apand Pty Ltd v The Kettle Chip Company Pty Ltd (1994) supra.
Character Merchandising - prop or background?
The applicants submit that there is a vast gulf between the prominence given to "The Simpsons" names and images when compared to the prominence given to "Duff Beer".
An unusual aspect of this case, is that it concerns not a fictional "character" as such, but a "make-believe" product, namely the fictional "Duff Beer" which is coupled with a character, a background institution, ("Duff Brewery"), and also with the associated advertising signs, posters and images of the beer, which play an important role in the series. These features form part of the fictional "environment" in which the stories are played out. It plays a background role as part of the fictional world which the characters inhabit. No doubt, the assignation of the name "Duff" to the product was designed to achieve a more believable specific fictional effect than to have an anonymous generic "beer" can and it serves to endow the characters with more focussed identifiable "human" traits.
The evidence shows that the use of the "Duff Beer" name on the breweries' can is sufficient to invest the beer in the minds of consumers with many of the associations of "The Simpsons". Accordingly, in my view, the principles which apply to character image or title association are equally applicable to the name of a product which features in the program, in this instance, "Duff Beer".
There is no need to reinforce the name with an image of any character or any other title or description or indeed any reference to the words "The Simpsons". To paraphrase the words of Dixon J in the Disney case, supra at 457, the breweries, in using the name "Duff Beer", are making use of an element which
belongs to "the reputation and fame" of Matt Groening's creations to create the association.
Association
The breweries point out that there have been 134 episodes of "The Simpsons" shown to date and that each of these lasts for 22 minutes. Two of those episodes, namely, "Selma's Choice" and "Duffless" contain repeated references to "Duff Beer". Of the remaining 132 episodes which constitute a total of 2904 minutes, the Brewery submit that only 6 minutes 40 seconds contain references to "Duff.
While bearing these figures in mind, I do not consider that they have any importance. No doubt the impact of 2 complete episodes which contain repeated references to "Duff" and a further 6 minutes 40 seconds of pervasive references in national broadcasts at peak times, results in a very significant exposure. Moreover, there can be no doubt, on the evidence, that whatever the exposure, the word "Duff" is impressed in the consciousness of a large number of potential consumers of the product as "The Simpsons" beer. There have been numerous repeats of the series which reinforce the public awareness of the name.
Intention to take advantage of the goodwill of another, does not of itself establish a cause of action, nor can there be a monopoly in the use of an ordinary English word. A court will, however, more readily infer where there is intention, that the promoters who know the field of business well, were justified in entertaining the hope or expectation that the attempt would succeed and it assists the conclusion that the public was so influenced. Cf Australian Guarantee Corporation Ltd v Sydney Guarantee Corp Ltd (1951) 51 SR(NSW) 166 at 170-1, applied by Gummow J in Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Limited (1988) 84 ALR 437 at 445. His Honour points out that acting in the hope or expectation of depriving a benefit from a resemblance to the plaintiff's name is no substitute for the primary requirement of distinctiveness or reputation but it is evidence which can assist an applicant's case.
The intention of the breweries is to persuade consumers to believe that there is a strong association between their product and "The Simpsons". The breweries realised that they might be running a risk in promoting their can yet their intention was to obtain full benefit of "The Simpson" association while at the same time attempting to distance the product from the series just sufficiently to avoid liability under the Act or at common law.
The research advice was that the association need not be spelt out in an "overt" way, but that a sufficient association could be made by use of the name. In short, the breweries and their advisers intended to exploit the association between "The Simpsons" series and the beer by attempting to use the least necessary degree of overt connection, while at the same time being able to rely on the force of that association in promoting their beer. In accordance with the advice received, they decided to rely on the "Duff" name as sufficient alone to make the connection. Their intention was to "sail as close as possible to the wind" in order to "cash in" on the reputation of "The Simpsons" without stepping over the line of passing off or deceit.
The transcript of the cross-examination of Mr Cole records:
"Q. ... did you perceive when you arrived that there was a possibility that people would be misled if the first can design was used, which is the red can design?
A. When I first saw the can and I saw the can that was used in the Simpsons programme, which is identical, then my first concern was, I imagine, was just that is a total takeoff and then I'd have a legal problem - this is from, obviously, a non-legal person that I'd have a legal problem with taking off another can so I think that would be misleading and part of that would be people would be taking the wrong information.
...
Q. But in this case there was a risk of people being misled even though the likeness of Homer and the words Homer's beer, etcetera, were not on the can?
A. Yeah, I think, my point of view on this is I'm thinking that we're going to mislead them by having exactly the same can.
Q. Even though there was no picture of Homer on it?
A. Yeah, even though there's no picture on that one." (Emphasis added)
The breweries knew that they were able by use of the name "Duff" alone to evoke the powerful association without using names or images. I do not think that the changes in can colour or the "tidying up" of the way "Duff" was written was effective to eliminate the association.
Accordingly, I consider this knowledge is important evidence to support the inference that the goal of creating an exploiting the powerful association with "The Simpsons" had been achieved.
The breweries conceded that the use of the word "Duff" as the name of the breweries' product may cause persons familiar with "The Simpsons" program, which features "Duff Beer", to think that the breweries' product has the same name as the beer "Homer Simpson" drinks. This statement is clearly correct so far as it goes. But it understates the effect of the evidence.
The evidence supports the view that there is a very large number of consumers who will have been exposed to the series during the five years it has been broadcast nationally and rebroadcast in prime time. The Nielsen ratings and audience figures clearly establish this. Therefore not only will such viewers make the observation that the name "Duff" on the breweries' can is the same name as that in "The Simpsons" but will also immediately be conscious of a strong and clear connection with the series and its main characters, their personalities, institutions ("Duff Brewery", "Moe's Bar") and other products which are elements in the "fictional universe" of "The Simpsons".
This association will arouse and recall the connotations of fun, irreverence and parody which surround "The Simpsons" episodes. It is this element of the goodwill and reputation of "The Simpsons" which the breweries seek to exploit in the launch and promotion of their beer.
The name "Duff" will induce customers into believing that the product has a connection or association with "The Simpsons" program, when in fact it has no connection whatsoever. The fact is there is no and never has been any association between the applicants and the respondents. The implicit representation, in my view, is that the name "Duff Beer" produced by the breweries, is an embodiment of the fictional beer which features in the series. In reality, the product is a beer, which is manufactured in Australia by companies without any commercial or other association with the producers of the series.
The precise nature and content of the association is difficult to define.
However, the immediate and direct connection made by a number of members of the focus group with "The Simpsons", coupled with the evidence of extensive licensed merchandising of products containing images and characters from the series, make it more probable than not, that a large and substantial section of the consuming public will be misled into believing that the beer marketed by the breweries is sanctioned or permitted by the producers or proprietors of "The Simpsons" or their licensees.
It is true, that it would be artificial to anticipate that every person buying "Duff Beer" would take the time to analyse the subtle legal or merchandising overtones and connotations and ask specifically whether the beer is made with the license or permission of the applicant. I consider, however, that the breweries' beer can will produce this impression.
As indicated earlier, one or possibly two of the interviewees in the focus group, raised the question of royalties or copyright, or permission in an explicit and specific way.
As Burchett J said in the Pacific Dunlop Ltd v Hogan (the Crocodile Dundee case), supra at 586:
"In my opinion, the vagueness of the suggestion conveyed in this case is not sufficient to save it. That vagueness is not incompatible with great effectiveness. It would be unfortunate if the law merely prevented a trader using the primitive club of direct misrepresentation, while leaving him free to employ the more sophisticated rapier of suggestion which may deceive more completely. In my opinion, the deployment in circumstances of the present kind of techniques of persuasion, designed to influence prospective customers in favour of a trader or his products upon the basis of some underlying assumption which is false, may be held to be misleading or deceptive or to be likely to mislead or deceive within the meaning of s52, and may also be held to constitute passing off. Upon that basis, the appellant was rightly found liable.
... I do not think that the appellant's conduct derived its misleading character from any pre-existing misconception on the part of members of the public......... I do not think a person who inferred Mr Hogan's consent had been given to the advertisement would do so by reason of a misunderstanding of the law. The ordinary viewer would well appreciate that the niceties of the law of intellectual property were quite outside his own area of precise knowledge, and would base his conclusion, not on any assumption about the law, but on his correct assumption of what normally happens in commercial and advertising practice..."
These observations are apposite to the present case.
Reference was made by counsel for the breweries, to one of the episodes which was set in Australia. In the course of this episode there are depictions of the then Prime Minister drinking "Fosters"; "Homer" drinking from a large "Fosters" can at a pub; "Fosters" being consumed in Parliament, and "Fosters" cans being thrown. There are also depictions of other Australian cliché products, such as "Energiser" batteries and "Vegemite". It is said that no-one would reasonably assume from these depictions in the series that the manufacturers of "Fosters" would have or need permission from the producers of "The Simpsons" to market their product, simply because their product appeared on the program. This remark is true but irrelevant. The depictions appear in only one special episode. They are products with a local Australian flavour as opposed to a "Simpsons" flavour and are designed simply to create that Australian flavour in the particular episode. They cannot, in any way, be said to be an element in the goodwill or reputation of "The Simpsons" in the same way or to the same extent as the name "Duff Beer".
In my view, it is significant that there has been extensive licensing of merchandise, particularly in recent times, of T-shirt, caps and other items depicting images and names of characters of the series including "Duff Beer". In these circumstances the false impression created by the breweries' can would be reinforced, to the effect that "The Simpsons" had sanctioned the beer when this is contrary to the fact. There would be a substantial degree of awareness in the community that "The Simpsons" were the subject of and basis for such merchandising and many would assume that it was just another product permitted by the producers. This would not be due to any erroneous assumption on the part of the consumers but results rather from the use of the can in the context of widespread perceived licensing activities by the producers of "The Simpsons".
The present case is quite different from the Kieran Perkins case, (supra), where Byrne J held that there was no breach of s52 of the Act, nor was there passing off, because on a true view of the colour advertising supplement, appearing in the Courier-Mail, the use of the name and image of Kieran Perkins did not lead to the conclusion that a significant number of readers would have inferred that Perkins or Talmax Pty Ltd, a management company, acting on his behalf, had consented to the publication. That case turned on the form of the particular supplement under consideration and his Honour emphasised that Telecom's prior sponsorship of Perkins, had been a complicating factor, colouring the way in which the message would be received. There had been a history of association between Telecom and Perkins, as a result of Perkins wearing a cap carrying the Telecom dolphin's logo and accepting an award as Telecom's swimmer of the year. Byrne J considered that Perkins had publicly associated himself with Telecom and its sponsorship of Australian swimming and therefore readers were unlikely to have considered that common decency or usual "practice" required Telecom to obtain a consent before proclaiming the extent of its support for Australian swimming and Perkins in particular, in the advertisement.
His Honour construed the association of the image of Perkins with the colour supplement as likely to lead readers to suppose that the prior public affiliation of Telecom with Australian swimming in general and Perkins in particular
entailed the liberty in Telecom to publicise its encouragement of the sport.
In the present case there is no history of association between the breweries and "The Simpsons" whatsoever.
Moreover, Byrne J considered that the image of Perkins did not, in the context of that case, amount to an endorsement. If a reader considered that Telecom was legally obliged to obtain consent to the name and image of Perkins in the advertisement, it was as a result of an erroneous assumption. In my view, that principle has no part to play in the present case because the context is quite different.
In the Gary Honey case (supra) the Federal Court concluded that an Australian Airlines poster of Gary Honey, a long-jump medallist, would not be perceived as a sponsorship of airline services but rather as the promotion by the airline of sport.
I am satisfied that there is a large section of the public who watch "The Simpsons" television program. Many of these will recognise that the word "Duff" in relation to beer, is associated with the "The Simpsons" series. They will also appreciate that "The Simpsons" are an animated cartoon series, which has a creator and producer. Such persons will have no reason to believe that the producers are manufactures of beer, clothing, mugs or other merchandise, upon which images or names, prominent in "The Simpsons" series appear.
Many viewers of the program will be aware of merchandising of these products and more likely than not, will assume that the breweries' "Duff Beer" is permitted by the producers. They will have an understanding, caused by the breweries' promotion, that the producers have sanctioned or allowed the manufacture of the beer. Audiences and sections of the public are, nowadays, relatively sophisticated and acquainted with the practice of licensed merchandising.
Many may not reflect on the matter or subject it to any analysis. However, many others will be likely to have an appreciation of the considerations referred to above, and will make, although perhaps in an undefined way, an assumption of allowance or permission of the product by "The Simpsons".
On a literal reading of s52 of the Act, the deliberate creation by the breweries of an association by use of the name "Duff" between the breweries' beer can with "The Simpsons'" program, in circumstances where there is no association and indeed, where such an association is contrary to the express policy of the producers, amounts to misleading and deceptive conduct. There is no necessity to demonstrate that the viewer or consumer must think in specific terms of permission or allowance in order to constitute deceptive conduct. The intentional use of the name "Duff Beer" which produces the false association is sufficient, in my view.
As indicated above, I am satisfied on the balance of probabilities that consumers are in fact likely to assume sanction, permission or allowance on the part of the producers. This is not caused by any erroneous assumption on their part, but by the deceptive conduct of the breweries.
Distancing and Disclaimers
It is submitted by the breweries that steps were taken to ensure that there would be no suggestion to consumers that the product was manufactured or sold with the license or permission of the applicants.
It is important to note that there is no disclaimer to consumers on the can, or in the retail advertising or promotional material, to the effect that the beer is not that referred to in "The Simpsons" program. An express disclaimer, can if sufficiently prominent, destroy any suggestion of association between a character and the product under consideration. For example, in the Maybelline case, the controlling consideration was, that across the top of the picture in large and striking letters were the words "OLIVIA? NO, MAYBELLINE!" Given this express statement it would be difficult to assert any relevant association between "Maybelline" and Olivia Newton-John.
The steps which are said to have been taken to disassociate, the "Duff Beer" from "The Simpsons" in the present case, include ensuring that the words "The Simpsons" were not referred to on the can and the design, colour and get-up of the yellow can was said to be quite different from that featured in "The Simpsons". Nor did the image of any "Simpsons" character appear on the can.
Consideration of the letters sent to Swan Liquor Retailers and other retailers in Western Australia, South Australia and Victoria indicate the "tongue-in-cheek" nature of the attempts at "disassociation". A circular letter sent to retailers contains the following note:
"... Oh and (to be serious for a moment) yes we're aware of the fact that another 'Duff Beer' features in "The Simpson's" TV show. Please note Homer's favourite drop is a completely separate, fictitious product. We would encourage you not to use "Simpson's" imagery or logos in supporting "Duff Beer" as these are not owned by us and in doing so you may run the risk of infringing legal copyright."
There is a notable lack of any attempt to drive this message home to the "consuming public".
These letters indicate a view, on the part of the breweries, that if "The Simpsons" image or title appeared on the can, there was a real risk of infringing copyright. Far from indicating a disassociation, these letters relied on by the brewery, reinforce the conclusion that the beer was intended to be marketed with a keen awareness of the existence of "The
Simpson" program and of the force of "The Simpsons" association.
Failure to Adduce Consumer Evidence
The breweries submit that the applicants lack of consumer evidence to support their case leaves the matter in the realm of speculation with respect to consumers' views as to whether "The Simpsons" have a right to stop the use of the name without permission.
In many previous cases, consumer evidence, either in the nature of surveys, or in the form of testimony by consumers, was presented to the Court. However, in deceptive conduct and passing off cases, it is not essential that such evidence be called.
The relevant principle is that set out by the High Court in Jones v Dunkel (1959) 101 CLR 298 where Kitto J (at 308) formulated it in this way:
"... the omission to call Hegedus as a witness could not properly be treated as supplying any gap which the evidence adduced for the plaintiff left untouched. But what should have been added, ... was that any inference favourable to the plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence."
One explanation given by the applicant for not presenting consumer evidence was that time did not permit. I do not think this is a satisfactory explanation. However, it was also submitted for the producers, that there was no necessity to call such evidence due to the cogent evidence afforded by the breweries' documents leading to the decision to select the name "Duff" and promote the product. The consumer research embodied in the focus reports; the transcripts; the expert advice and the detailed research steps carried out in implementation of the proposal were all before the Court.
The failure to call specific consumer evidence does not dissuade me from the view that the applicants, have on the evidence, made good a strong case of passing off and breach of the Act.
In relation to the trade practices claim I am satisfied that the breweries have engaged in conduct that is likely to deceive within s52. I also conclude that the breweries have made representations in connection with the supply or possible supply of "Duff Beer" and in connection with the promotion and use of such product, which falsely represent that "Duff Beer" has approval, which it does not in fact have, and therefore there has been a breach of the norm of conduct proscribed by s53 of the Act.
Passing Off
The tort of passing off is not limited to protection of a name or trade mark. The tort can cover visual images which television advertising campaigns lead the market to associate with a plaintiff's product. See Cadbury-Schweppes Pty Ltd v Pub Squash Co Pty Ltd (1980) (supra) per Lord Scarman at 858.
The elements of the tort were enunciated by Lord Diplock in Erven Warnink Besloten Vennootschap v J Townend & Sons (Hull) Ltd (1979) AC 731 at 742 as follows;
"... five characteristics ... must be present ... to create a valid cause of action for passing off:
(1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers .. or ultimate consumers of goods supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so."
In the light of the evidence and the reasoning earlier in this judgment, I consider that the above elements have been made out. There has been a misrepresentation as to the association of the goods with "The Simpsons", made by breweries in the course of trade, to prospective customers or ultimate consumers. It is reasonably foreseeable that the business or goodwill of "The Simpsons" and their licensing and merchandising rights could be adversely affected, particularly in the light of the policy in relation to alcohol promotion. If the product is permitted to be marketed it will probably cause actual damage to the producers. There will be loss of licensing fees. Ian Gaffney, whose company is Gaffney International Licensing Pty limited, gave evidence that the rights retained by the producers are valuable intellectual property rights and any infringement of those rights would cause harm and damage and would interfere with the integrity of the licensing and merchandising programs implemented by his company under license from the producers. Mr Gaffney was not required for cross-examination.
I consider that the producers have made out their case in relation to passing off.
Conclusions
My conclusion is that the breweries have engaged in a course of conduct calculated to achieve and exploit a strong association between their use of the name "Duff Beer" and "The Simpsons", which in fact is deceptive, while at the same time, hoping to avoid legal liability. In fact, their hope of avoiding legal liability were not realised in that they have breached the Act and the charge of passing off has also been made out.
The producers have succeeded in relation to both the Trade Practices claims under ss52 and 53 and also in relation to passing off.
As the present hearing was limited to the question of liability, I direct the applicants to bring in Short Minutes of Order to give effect to these reasons and also draft directions in order to progress the further hearing in relation to relief sought.
I certify that this and
the preceding forty-nine (49)
pages are a true copy of the
Reasons for Judgment herein of
his Honour Justice Tamberlin.
Associate:
Date: 17 May 1996
Counsel for Applicant: Mr D K Catterns QC
Mr R J Webb
Solicitors for Applicant: Allen Allen & Hemsley
Counsel for Respondent: Mr R B S Macfarlan QC
Ms A Bowne
Solicitors for Respondent: Mallesons Stephen Jacques
Date of Hearing: 22, 23 & 24 April 1996
Date Judgment Delivered: 17 May 1996
