IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No NG 38 of 1997
)
GENERAL DIVISION )
BETWEEN: EMAP ELAN LIMITED
First Applicant
EMAP CONSUMER MAGAZINES LIMITED
Second Applicant
EMAP WOMEN'S GROUP LIMITED
Third Applicant
AND: PACIFIC PUBLICATIONS PTY LIMITED
Respondent
CORAM: HILL J
PLACE: SYDNEY
DATED: 30 JANUARY 1997
REASONS FOR JUDGMENT
The applicants, Emap Elan Limited, Emap Consumer Magazine Limited and Emap Women's Group Limited are companies incorporated in the United Kingdom. Each of Emap Elan Limited and Emap Women's Group Limited is a subsidiary of Emap Consumer Magazines Limited which in turn is a subsidiary of Emap PLC, an English publicly listed company.
The first applicant, Emap Elan Limited, publishes in the United Kingdom a magazine entitled "more!" as agent for its immediate parent company. For present purposes it is irrelevant to distinguish between the three applicant companies and I shall hereafter compendiously refer to them as "Emap".
Emap seeks by way of interlocutory relief an injunction restraining the respondent, Pacific Publications Pty Limited ("Pacific"), from publishing and distributing in this country a magazine under the name "more". The launch of this new magazine, unless restrained, is scheduled to take place on 10 February 1997. In the statement of facts which follows it should be appreciated that I have made no ultimate findings of fact and that I have proceeded on the basis of evidence not tested by cross-examination.
Emap's publication, "more!", was launched as a fortnightly magazine in the United Kingdom in 1987. In the period from July 1988 to June 1996, worldwide sales of that publication have grown from 214,692 to 430,141. Projected turnover for the 1996/97 fiscal year is expected to be £11,750,000. Average total annual retail sales revenue has, since the magazine's inception in 1992, amounted to £8,500,000.
Emap's publication is directed primarily to younger female readers. It places emphasis upon sex and related issues, particularly relationships, fashion, cosmetics, gossip, films, music and health. By way of example, the January 1997 issue of the English publication contains features with the titles "Doorstop Criminals (The Women Con-Artists)", "Mad for Lads", a six page special on living with them, "Secret Sex Power", "How to Make Your Dreams Work for You", "Living with a Jealous Lover", "Man Talk", "Club Night", as well as "Celebrities' Fashion & Beauty".
The title "more!" appears at the top of the cover underneath "Smart Girls Get More!", a by-line or slogan which has appeared on all issues of the publication for some considerable time. For at least the last five years Emap's "more!" magazine has been on sale in Australia, those sales being made through the distributor, Gordon & Gotch Ltd. Copies are shipped to Australia by sea and remain on shelves of various newsagents here for approximately two weeks. The magazine sells for $A3.50. It is available for sale at a relatively large number of newsagencies and book shops throughout the country.
Generally, Gordon & Gotch Ltd appear to have received 400 copies of each issue for sale. The sales fluctuated in the five year period for which figures were available from 124 to 196 per issue, a figure of 38 sales for the issue of 11 September 1996 may be disregarded as somewhat out of kilter with other results. The evidence suggests that the number of readers of the Emap publication is well in excess of the number of sales, this accords with commonly accepted experience.
Magazines of this kind may be read at newsagents but not purchased or when purchased, may be read by a number of persons in addition to the original purchaser. It may be inferred from the world-wide circulation figures, to which reference has already been made, that in addition to such reputation as the publication may have in this country by force of its being available here on sale, it would be known to Australian women who have visited or worked in the United Kingdom and subsequently returned to Australia as well as to residents of the United Kingdom who have settled in Australia or have visited here.
Pacific is a publisher of magazines. It is incorporated in Australia. Its Sydney office currently publishes four magazines with the title "Girlfriend", "That's Life", "Inside TV" and "TV Kits", although there are some other infrequently published magazines emanating from the Sydney office.
The magazine "That's Life" was launched on the Australian market approximately three years ago. At the time it was launched it was contemplated that, if successful, a sister publication would later follow. "That's Life" proved to be successful, hence consideration was given to the launch of a magazine to be directed to a more upmarket women's market. Those involved with the planning of the new publication directed their attention to the 25 to 40 year age group and in particular to married women with children concerned with the role of homemaker.
The first step in the planning procedure was to recruit an appropriate editor. Thus, a Ms Maire Fahey was attracted from the United Kingdom where she had worked as editor of the magazine "Best". She arrived in Australia and set about herself recruiting staff. At the time of her arrival no detailed attention had been given to the name of the new publication, rather the focus appears to have been on content and concept.
The name "more" arose from discussions between Mr Bush, one of the partners in the joint venture concerned with the launch of the new publication, and Ms Fahey although Mr Bush's English partners were also involved. Initial discussions focused on names such as "You", "Me", "For Me" and "For You". These names were rejected because they had been taken by other publishers.
Consideration was given to the names "more" and "Extra", the latter being regarded as unattractive. Initially the name "more" was discarded because it was known that there was a New Zealand magazine of the same name and there existed the possibility that the respondent would wish to sell its product in New Zealand. Subsequently it was discovered that the New Zealand magazine "more" had merged with another magazine "She", such that the New Zealand impediment no longer existed.
While both Mr Bush and Ms Fahey were aware of the existence of the English publication, neither was apparently aware that it was being sold in Australia and neither bothered to inquire. The evidence makes it difficult to establish precisely when the name "more" was decided upon. At the earliest it appears that it could have been the end of October or the beginning of November 1996, at the latest it was shortly before 20 November 1996. On that date the respondent made application to the Registrar of Trademarks for registration of the mark "more". Prior to making that application, a trade name search had been made which had not disclosed any competing registration.
The date 20 November 1996 should, so the applicants submit, be seen against a wider canvas. Emap and the respondent, both international publishers, were aware in a general sense of the other's existence and publications. Mr Innis, Director of Corporate Strategy of Emap was sought out by a Mr Martin, the General Manager of the respondent, in June 1995 while the latter was in London. A result of the meeting was a letter from the Group Development Manager of the respondent to Mr Innis of 30 May 1996 suggesting a dialogue between the companies to explore whether the respondent might publish under licence "appropriate titles that you might feel could travel here and be exploited as good Australasian editions".
Emap expressed reserve in a fax of 21 June 1996 about licensing but the idea appears still to have been thought attractive by the respondent Group Development Manager in September 1996, being a few weeks before the decision was apparently taken to adopt the name "more". However, so far as the evidence presently stands, the two strands of correspondence on the one hand and naming of the new publication on the other were unrelated.
It is clear from the evidence that the considerable time and effort put into the launch of the new magazine from July 1996 to the present date concentrated upon content and style rather than the proposed name of the publication. A number of mock-up front page/logo designs was created for consideration. It is interesting to note that a number of these incorporated the slogan "smart women want more", as already noted the slogan used by Emap, leaving open an inference that the use of the title "more", like the use of the slogan, was far from coincidental.
Ultimately
a design cover was chosen. The title "more" appears at the same
position on the cover and in precisely the same font as it does on the Emap
publication
although without the explanation mark and marginally smaller than appearing on
the English publication.
As indicators of the proposed content and style of the new publication the knock up cover for the proposed 17 February 1997 release shows the titles "We Had Affairs and Survived - Three Couples Confess", "Obsessed, I Washed Myself 60 Times a Day" and "I Hate You, Louise, My Mother's Last Words To Me", titles which would not seem to be greatly out of place in the English publication. The slogan "Smart Women Get More" was, however, abandoned although counsel for the respondent declined to proffer an undertaking that it would not be used in the future.
An advertising pack was prepared to publicise the new publication and distributed to various advertising agents and potential advertising customers. That pack uses the slogan "Smart Women Get More" on the front. It claims that the new publication will be a "Stylish lifestyle weekly magazine, designed to appeal to women who want the best for their lives and their families". It is suggested that the magazine will be pitched at readers likely to be between 25 and 49 who fit into the following associated demographics, "something better", "visible achievers", "conventional family".
It was not until approximately 18 December 1996 that the applicants learned of the respondent's intended launch of a publication "more" in February 1997. On that day Mr Innes had a conversation with Mr Motion, the chief executive officer of the respondent. Mr Innes requested that the respondent not use the name "more". Mr Motion said that the respondent had registered the name, that the market for the two publications was different and that in any event it was too late to change. When challenged that he was well aware of the United Kingdom publication and its distribution in Australia, Mr Motion said:
"Yes. But it's not registered and we are free to use the name. Anyway, Bauer has used one of our names in the United Kingdom `That's Life', and we are pretty upset about that. There's nothing I can do".
The present proceedings commenced on 17 January 1997. It may be inferred that the Christmas break accounts at least for some of the delay between 18 December 1996 and 17 January 1997. As at 24 January 1997 the promotional campaign for the proposed new publication had not commenced. According to Mr Motion it was proposed that sales would be made through some 30,000 retail outlets using Gordon & Gotch Ltd as distributor. Arrangements have been made as well for sales through the major supermarket chains other than Woolworths Ltd.
The parties were not in dispute, as to the relevant test to be applied in considering whether interlocutory relief should be granted. The applicants must show that there is a serious issue to be tried, that the balance of convenience favours the grant of interlocutory relief and that damages would not be an adequate remedy: Australian Coarse Grain Pool Pty Limited v Barley Marketing Board of Queensland (1982) 57 ALJR 425; Tableland Peanuts Pty Limited v Peanut Marketing Board (1984) 58 ALJR 283; Epitona Pty Limited v Australasian Meat Industry Employees Union (No. 2) (1984) 3 FCR 55 at 58-9.
However, as I pointed out in Trade Practices Commission v Santos Limited (1992) 38 FCR 382 at 392, in a judgment with which Jenkinson J concurred, the question of the existence of an arguable issue and the question where the balance of convenience lies are not independent of each other. The stronger the applicant's case on the merits the less significance may need be shown to the balance of convenience. This too was accepted in principle by senior counsel for the respondent. It is nevertheless convenient in most cases, and the present case is no exception, to consider each of the three matters separately, while appreciating the interaction each has on the other.
Counsel for the respondent readily conceded that the applicants had shown the existence of an arguable issue, although he disputed that the applicants' case was a strong one. Particularly, he submitted that the applicants' case suffered from the following defects:
(1) that the evidence of the applicants' reputation in Australia consisting as it did of sales on average of about 150 copies per fortnight was insignificant;
(2) that the get-up of the proposed publication differed from that of the Emap publication;
(3) that the word "more" was an ordinary English word and that the Court should be slow to give monopoly rights to one party in that word;
(4) that the two publications were in any event aimed at different markets and so were not likely to cause people to be misled; and
(5) that the applicants' case was weakened by the existence and sale in Australia of the New Zealand publication "more" to which reference has already been made, which publication later merged with another publication.
With respect to the careful argument of senior counsel for the respondent, I am of the view that the applicants' case is indeed a strong one. The tests of reputation in a passing off action are to be found authoritatively discussed in the judgments of the Full Court of this Court in ConAgra Inc v McCains Foods (Aust) Pty Limited (1992) 33 FCR 302. In particular it is now clear that it is not necessary that a plaintiff show a business carried on in the jurisdiction. It is sufficient that the plaintiff have a reputation within the jurisdiction in respect of a trade or business carried on elsewhere.
As to the question of reputation, as discussed earlier, magazine sales are always considerably less than the readership of a magazine and the flow of international communication between Australia and the United Kingdom is now such that international barriers are becoming increasingly artificial. No doubt the burgeoning growth of the internet will accelerate that development.
In ConAgra, Lockhart J, with whose judgment French J agreed, said (at 342):
"It is no longer valid, if it ever was, to speak of a business having goodwill or reputation only where the business is carried on. Modern mass advertising through television (which reaches by satellite every corner of the globe instantaneously) radio, newspapers and magazines reaches people in many countries of the world. The international mobility of the world population increasingly brings human beings, and therefore potential consumers of goods and services, closer together and engenders an increasing and more instantaneous awareness of international commodities.
This is an age of enormous commercial enterprises, some with budgets larger than sovereign states, who advertise their products by sophisticated means involving huge financial outlay. Goods and services are often preceded by their reputation abroad. They may not be physically present in the market of a particular country, but are well known there because of the sophistication of communications which are increasingly less limited by national boundaries and the frequent travel of residents of many countries for reasons of business, pleasure or study."
What his Honour there says is, a fortiori, where what is being considered is itself a means of communication. Later in the same judgment his Honour spoke of the means whereby a reputation may be proved and the extent or scope of the reputation necessary. His Honour further said (at 346) that:
"A plaintiff must prove that there are within the jurisdiction in which the defendant is carrying on business a substantial number of persons who are aware of the plaintiff's product and in this context it does not matter whether the persons so aware are resident or visitors".
The context in which his Honour was speaking was the context of an action in passing off. In my view, and if the evidence stays the same at the final hearing, a court would conclude that there were within Australia a substantial number of persons aware of the English publication and that in the relevant sense the applicants had shown a reputation in this country.
It may be added that the applicants rely in the present case as well, upon the provisions of s52 of the Trade Practices Act 1974 (Cth) ("the Act"). In a case such as the present an applicant to succeed in showing that conduct has been engaged in which is misleading or deceptive or likely to mislead or deceive, must prove reputation although it may well be that the extent of reputation to be proved could be less than that required to be shown in a passing off case. In ConAgra at first instance as the trial judge I suggested that where the matter was considered under s52 of the Act a lower threshold test should be adopted. I advanced the test of "a not insignificant number".
On appeal, the question of the relevant test under s52 received little attention, largely because the case was argued as one involving passing-off and, in any event, the applicants did not satisfy even the lower test which I had advanced. However, French J (t 380-81) expressed general agreement with the test which I had suggested. Neither Lockhart J nor Gummow J found need to consider the matter. To the extent that a lower test is involved, clearly the applicants would succeed in establishing reputation as, in my view, they would succeed in establishing reputation even in a passing-off case.
I was referred to the decision of Kaye J of the Supreme Court of Victoria in The Cricketer Limited v Newspress Pty Limited and David Sym & Co Limited [1974] VR 477, a case where an interlocutory injunction was sought by an English company publishing a magazine called "The Cricketer", to restrain publication of an Australian publication with the same name. The proceedings were based of course on passing-off and did not involve s52 of the Act. In that case the evidence was that there had been sales of the relevant magazine on average of approximately 123 in Victoria. It was held that that number of sales sufficed to establish the appropriate reputation.
One cannot, nor should one seek to, draw much assistance by way of authority from cases which really depend upon factual rather than legal matters. However, so far as "The Cricketer" case deals with reputation it supports the view which I have adopted.
The plaintiff in that case failed because in the view of the Court those interested in cricket were not likely to be confused or deceived into believing that the defendant's magazine was the plaintiff's magazine. If the question here were whether a person into whose hands the proposed Australian publication came would be likely to be deceived into thinking that that publication was in fact the Emap magazine, there could be little doubt as to the outcome.
It is clear from the get-up of the cover that the respondent's publication is an Australian publication, it says so. On its face it is clearly not a British publication. But that is not the end of the matter. The likelihood of deception in the present case lies not in a consumer believing that the two publications are the same, but rather in a consumer concluding that the Australian publication was connected through licensing with the British publication.
As to get-up, but for the name, it must be said that there is little in either publication differentiating them from any of the countless other publications addressed to women, or for that matter men.
I
should perhaps at this stage mention a body of evidence typified by an
affidavit of Ms Ita Buttrose, a prominent editor and publisher of women's
magazines, which sought to distinguish the English publication from the
proposed Australian publication by reference to style, content and image. For example, Ms Buttrose described the
cover of the English publication as "sleazy"
and aimed at a "sexually obsessed
young woman", whereas the proposed Australian publication, in her
view, is more "conservative",
and "classic". She and other deponents urged that there
could be no confusion between the publications.
Opposing affidavits took opposite views pointing out that both magazines
emphasised sexual matters and that if both were on sale confusion would abound.
Evidence of this kind is admissible and may be taken into account. However, at the end of the day, it is the eye of the judge which is determinative of the issue, aided as the judge may be by such evidence. Here a visual comparison of the publications makes it clear that both are preoccupied with sex but that there are differences between the publications such that, but for the name that each shares in common, confusion would be no more likely than confusion with any other publication aimed at women generally or younger women in particular. But as I have already suggested, that is not the end of the matter.
The vice of permitting publication of the respondent's magazine is that a person to whom it is likely to come would be likely to be misled into believing that there existed an association by way of licensing or otherwise between the two magazines. I do not think that the respondent's case is assisted by virtue of the fact that the word "more" is an ordinary English word. While in this area of discourse the cases demonstrate that it may be more difficult for a plaintiff to establish a reputation in a name which is descriptive than it might be in a name which is made up or is a "fancy name"; (Equity Access v Westpac Banking Corporation (1989) 16 IPR 421 at 444-448) the word "more" cannot in the present context be said to be merely descriptive or, indeed, to be descriptive at all. There seems no reason to believe that the word "more" might not become distinctive of a publication or that it has not done so in the case of the Emap publication.
The argument that the two publications are aimed at different markets ignores two important points. First, as a comparison of content makes clear, there is an overlap of content as well as an overlap of markets. Articles in the one magazine may well appeal to readers of the other. The present is not a case, such as McWilliams Wines Pty Limited v McDonald Systems of Australia Pty Limited ("the Big Mac case") (1980) 49 FLR 455, where the market for wine was clearly different from the market for hamburgers, such that there was really no common field of activity. Both magazines here are directed at women, and while the ages of women attracted to the one might differ from the ages of women attracted to the other, there is obvious overlap, particularly in the twenties age group. Secondly, it must said that younger women inevitably like younger men age, so that a person who is a member of the readership group of the English publication will rapidly advance into the category of persons to whom the proposed Australian publication is designed to attract.
It is perhaps useful to record here in the context of the Big Mac case, to which reference is made above, that the present is a case which goes well beyond the area of mere confusion and is one where members of the public, or at least those aware of the English publication, would go beyond the mere wonder that is referred to by Smithers J in the Big Mac case to form conclusions as to the business connection between the two publications.
Finally, in my view, the evidence of the New Zealand publication is of little assistance to the respondent. That evidence amounts to no more than this; that two editions of the New Zealand publication bearing the name "more" had been imported into Australia. In what numbers that import occurred and in what circumstances is not made clear by the evidence, nor is there any attempt to detail the style get-up and content of the New Zealand magazine.
The case for the respondent becomes stronger when one moves to consider the question of balance of convenience and adequacy of damages as a remedy. So it is submitted that the damage and inconvenience to the respondent, if publication of its new magazine is now delayed, is apparent; advertising might be lost and additional expenditure might be incurred. Evidence quantifying additional expenditure likely to be incurred or expenditure likely to be lost in the event of an injunction was somewhat difficult to follow, but, at the very least, it must be said that it is clear that some expense and loss would be inevitable. It is, however, submitted by the resondent that, looked at from the point of view of the applicants, all they would lose if an injunction were refused would be the profits from the sales in Australia which would be lost that is to say, the profits on the sales of approximately 150 copies per fortnight. I might mention that no offer was even made on the part of the respondent to keep accounts as an alternative to injunctive relief. However, that is not a matter which is of great, ultimate significance.
The argument is at first blush attractive, however, it fails to take into account four matters of significance. First, it fails to take into account the considerable strength of the applicants' case on the evidence presently before the Court and the fact that while relief in a case under the Act is discretionary, regard to public interest plays an important role in determining whether injunctive relief would be granted, a role less obvious in ordinary passing‑off cases.
Secondly, it ignores the fact that the respondent was admittedly aware of the United Kingdom publication right from the outset, even if on their own case they were unaware of the availability for sale of the English publication in Australia. Being aware, they chose to proceed to publication regardless, given the international market in magazines today where one's own experience makes clear that international magazines are frequently available, sometimes in obscure parts of the world. The failure to make any inquiries about sales of the Emap publication in Australia is a factor, in my view, relevant to be taken into account in concluding that actually (or constructively in the sense of deliberately eschewing inquiries) the respondent proceeded to plan the launch of the new magazine with its eyes wide open to the consequences which might flow from that.
Thirdly, interlocutory relief generally favours the retention of the status quo pending the parties being given the opportunity to litigate fully at a trial. Although this is so, care must be taken to avoid elevating the retention of the status quo into some legal test for granting or refusing to grant interlocutory relief. It is merely a matter to be weighed in the balance. I did not understand counsel for the respondent to suggest otherwise. Here the status quo involves protecting the applicant pending the hearing against the publication of the magazine "more" by the respondent.
Counsel for the respondent emphasised that I should nevertheless take into account the fact that the present hearing is practically likely to be a final hearing having regard to time constraints and matters of that kind. In a way this is a two edge sword for the respondent, because counsel for the respondent refused to take up a suggestion that the hearing before me be treated as a final hearing of the proceedings. He can hardly have the matter both ways. Nevertheless, I recognise the force of the argument that, if the respondent were to decide to change the name of the magazine to a different name and proceed to publish under that different name, the respondents would be unlikely to change the name again after a final hearing.
Finally, the submissions of the respondent ignore the real commercial interests of the applicants in Australia. They are, as the correspondence between the applicants and the respondent makes clear, at least interested in discussing the licensing of publications in Australia. A successful publication in one country may be licensed as a concept in another country, thus building on existing goodwill. If the respondent were to be permitted now to "flood" (to use a term advanced by counsel for the applicants) the Australian market with their publication, the applicants may well lose the ability to turn such goodwill as they have in Australia to account. Even to allow publication to proceed to trial will necessarily act, at least for some time, to diminish the applicants' goodwill for the image of "more" magazine will be the more conservative image of which Ms Buttrose spoke, rather than the less salubrious image which she suggested the applicants were cultivating.
The applicants proffered the usual undertaking as to damages and, when asked, offered security for that undertaking in a form acceptable to the Court to a limit of $500,000. The respondents do not suggest that the amount of $500,000 is, on the evidence, likely to be exceeded. As the General Manager of the respondent deposed, in the event an interim injunction were granted the respondent has three options. It may move to close the magazine altogether; it may move to change the name to a completely different name; or it may move to vary the name slightly. While if a decision not to launch any magazine at all were taken the loss which is said to be in the order of $3 million, being expenditure incurred to date, would hardly be a loss totally related to the name when much of the expenditure must have been incurred before the name was even selected.
Inevitably the question whether the injunction should be granted will involve some balancing of the interests of the parties. An injunction inevitably will involve cost and inconvenience to the respondent which, should it turn out that injunctive relief should not have been given, may be compensated under the undertaking as to damages. What I am required to do is to balance as best I can the interests of the applicants on the one hand, with an existing publication selling in Australia to an intersecting market, against the desire of the respondent to bring into that market a publication of identical name, but in circumstances where cost and frustration will inevitably result to the respondent if publication is deferred or delayed.
In all of the circumstances I am of the view that the balance of convenience is in favour of granting to the applicants an injunction, until further order, restraining the respondent from promoting, marketing, advertising, selling, offering for sale or distributing in Australia any magazine under the title "more". For the reasons I have already indicated, I do not think that damages should be treated as an adequate remedy in the circumstances, having regard to the public interest existing under the Act.
I will make the following orders:
1. Liberty to apply on 24 hours notice relating to any matter.
2. The applicants:
(i) give the ordinary undertakings as to damages; and
(ii)undertake to provide security in an appropriate form acceptable to the Court, to the extent of $500,000 to be given on or before 14 February 1997.
3. The respondent, until further order, be restrained from promoting, marketing, advertising, selling, offering for sale, or distributing in Australia any magazine under the title "more".
4. The respondent pay the applicants' costs of the interlocutory proceedings.
5. The matter be stood over until 9.30am on Friday, 28 February 1997 for directions.
6. I note the undertaking in the form appearing on the transcript given by counsel for the respondent, such undertaking to continue until 28 February 1997, and the corresponding undertaking on the part of the applicants.
I certify that this and the
preceding twenty-four (24) pages
are a true copy of the Reasons
for Judgment herein of his Honour
Justice Hill.
Associate:
Date: 6 February 1997
Counsel and Solicitors AJL Bannon SC with DB Studdy
for First, Second and instructed by Dunhill Madden
Third Applicants: Butler
Counsel and Solicitors JJ Spigelman QC with S Gullota
for Respondent: instructed by Landerer & Company
Date of Hearing: 30 January 1997
Date Judgment Delivered: 30 January 1997
