FEDERAL COURT OF AUSTRALIA

TORTS - passing off - whether use of the name “Tabasco Design” in connection with the business of the design and construction of exhibit stands constitutes passing off of the name “Tabasco” used in Australia solely in relation to the sauce - whether members of the public would conclude that there was a commercial connection between the provider of the design services and the maker of the sauce - whether the respondents deliberately sought wrongfully to appropriate to themselves the reputation of the applicant in and in relation to the name and mark “Tabasco” and succeeded in doing so - whether there was a misrepresentation.

TRADE PRACTICES - misleading and deceptive conduct - whether use of the name “Tabasco Design” in connection with the business of the design and construction of exhibit stands constitutes misleading and deceptive conduct - whether members of the public would conclude that there was a commercial connection between the providers of the design services and the maker of “Tabasco” sauce.

Trade Practices Act 1974, s 52

Midland Counties Dairy Ltd v Midland Dairies Ltd (1948) 16 RPC 429, referred to

Radio Corporation Pty Ltd v Disney (1937) 57 CLR 448, discussed

Hogan v Koala Dundee Pty Ltd (1988) 20 FCR 314, referred to

Hogan v Pacific Dunlop Ltd (1988) 83 ALR 403; (1989) FCR 553, discussed

H P Bulmer Ltd & Showerings Ltd v J Bollinger SA [1978] RPC 79, referred to

10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 79 ALR 299, referred to

Childrens TV Workshop Inc v Woolworth (NSW) Ltd [1981] 1 NSW LR 273, referred to

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

McILHENNY COMPANY v BLUE YONDER HOLDINGS PTY LIMITED

formerly trading as TABASCO DESIGN and POLYMEDIA PTY LIMITED

trading as TABASCO DESIGN

NG 173 of 1995

LEHANE j

SYDNEY

18 SEPTEMBER 1997

THE COURT ORDERS THAT:

1.         The application is dismissed with costs

REASONS FOR JUDGMENT

Nature of proceedings

The applicant, which makes the well known Tabasco sauce, seeks to restrain the respondents from using the mark “Tabasco” in connection with their business and from passing their business off as, or representing that services which they provide are, connected with, sponsored or approved by the applicant.

The applicant and its business

The applicant is incorporated in Maine, in the United States of America.  The Tabasco sauce which it now makes was first made by Edmund McIlhenny in about 1868.  It was, and apparently still is, made on Avery Island, Louisiana, about 200 km west of New Orleans.  The sauce is made of chillis, including chillis grown on Avery Island, salt (Avery Island has its own salt column) and vinegar.  From the outset the sauce was sold in bottles similar to the familiar 60 ml bottle in which it is sold now (more recently the sauce has been sold in larger containers as well).  From the beginning the bottle has carried a label the form of which has remained largely unchanged to the present day.  The label presently in use is depicted below:

From the beginning, the shape of the label has remained constant as have its colours (green and red on a white background) and the style of printing: plain capital letters without serifs, the letters making up the name “Tabasco” being quite widely spaced.

The sauce was an immediate success: sales in the United States grew rapidly, and by the turn of the century it was established in several export markets.  The applicant was formed in about 1907 and it acquired all rights, including intellectual property rights, relating to the sauce.  The name “Tabasco” had already been registered as a trade mark in the United States in about 1906.  The applicant is now the proprietor of a number of registered trade marks both in the United States and in Australia, though none of those registered marks is of any direct relevance in these proceedings.  In the United States the mark “Tabasco” has been used by the applicant on a range of goods which extends beyond the original pepper sauce: these include different varieties of sauce, giftware and apparel; it also owns or controls retail outlets known as “Tabasco Country Stores”.  The only Tabasco brand product marketed in Australia, however, is the original pepper sauce and there is no evidence that the applicant has a reputation in Australia in relation to other goods to which the brand has been applied elsewhere.  “Tabasco” is, apparently, the name of a river in Mexico and also of a state or province of Mexico.  Whatever the origin of the name, it is common ground - and, on the evidence, rightly so - that in the mind of the Australian consuming public “Tabasco” is associated with one thing only, the applicant’s pepper sauce.  In that sense it is an exceptionally strong brand.

The respondents and their business

The two respondents carry on what are apparently various associated businesses under common management.  Mr Richard Friedrichs is the managing director of each respondent.  Initially, the business of the second respondent (Polymedia) was primarily that of what was described as a “producer of conferences and conventions and the associated audio visual and video elements”.  In about 1989 Mr Friedrichs decided to expand the range of services which Polymedia provided, prompted in part by a number of enquiries as to whether Polymedia could design and build exhibition stands.  In about April 1990, Polymedia received a brief for the design and construction of a stand for displaying vehicles at a motor show.  Because Polymedia at the time did not have a full-time designer Mr Friedrichs had to engage a firm of designers to assist with its (successful) submission.  Polymedia subsequently tendered successfully for the design and construction of a number of exhibition stands, engaging the services of a freelance designer, Mr Andy Collins, to design the stands.  In 1991 Mr Collins became an employee of Polymedia.  At about that time Mr Friedrichs decided to separate the business of designing and constructing exhibition stands from the other businesses carried on by the respondents and to designate that business by a particular name.  He offered a reward to the Polymedia employee who suggested the best name for the business.  Mr Friedrichs gave evidence that after a number of unsatisfactory names had been suggested, a conversation took place on an occasion when a number of the respondents’ employees were with Mr Friedrichs on the respondents’ boat.  The conversation was to the following effect:

Margaret Lamprecht (one of Polymedia’s administrative staff) said:

“Andy’s hot.  What about Tabasco Design: it’s hot”.

I said:

“What does everybody else reckon?”.

The others present said:

“Yeah, that’s a good name”.

That name was thereupon adopted; it was found to be available for registration as a business name and the first respondent (Blue Yonder) was nominated as the person proposed to carry on the business under that name.  Plainly at least one of the reasons why the name was thought apt was that Mr Collins, like the pepper sauce, was “hot”: precisely what characteristic of Mr Collins was thus referred to was the subject of some exploration in cross examination of Mr Friedrichs, but does not matter. Mr Friedrichs gave evidence that he was well aware of Tabasco sauce when the name, Tabasco Design, was chosen, but that he did not think that Blue Yonder’s use of the name would be taken to suggest any connection between Blue Yonder and the maker of the sauce.

Mr Friedrichs employed consultants to draft suggested designs for a logo for the new business.  He adopted one of their suggestions, choosing the particular design “because it had a very artistic appearance, which was consistent with the creative design work provided by Tabasco Design itself.  The aqua colour also very much appealed to me”.

The selected logo appears on Mr Collins’ business card:

The colours, like those of the label on the sauce bottle, are green and red (though with no less accuracy they might be described as aqua and brown).  The word “Tabasco” and the inverted vertical cone (representing, apparently, the vertical stroke of a “T”) are red or brown; the other coloured parts of the card are green or aqua.

In 1994, additionally, the respondents inserted in a trade magazine the following advertisement:

The blobs, obviously of sauce, are in the same colour as the word “Tabasco”.  In the end, the advertisement played no great part in the proceedings: it was published once only and the respondents have said that they do not propose to publish it again.

Mr Friedrichs gave evidence as to the character and extent of the business carried on under the name “Tabasco Design”.  Stands have been designed and built for a number of companies exhibiting at several shows.  None have been designed or constructed for companies in the food or drink business.  The stands do not identify Tabasco Design as their designer or builder.  There are in evidence some promotional pamphlets and other promotional material and examples of documents sent in response to requests to tender for particular projects.  It is sufficient to say of that material that in my view, unless the use of the name or logo is to be taken as suggesting a connection with the maker of the sauce (and disregarding the advertisement for the present), nothing in the material or evidence suggests such a connection.

On 27 March 1995 the Tabasco Design business was transferred by Blue Yonder to Polymedia.  The appropriate notice under the Business Names Act (1962) NSW was lodged on about 18 April 1995.

Finally, the applicant’s consent to the use by either respondent of the word “Tabasco” as part of its business name has not been sought or given.

Applicant’s claims

The applicant by its further amended statement of claim says that, by using the name “Tabasco” in connection with its promotion and supply of exhibition design and project management services, each respondent has represented that the services promoted and supplied by it are the services of the applicant or are connected with the applicant and its products, that those services are, or have been, sponsored or approved by the applicant and that the respondent has the sponsorship or approval of, or an association or affiliation with, the applicant.  In the case of Blue Yonder, those representations are said to have been conveyed not only by the use of “Tabasco” in its trading name but also by the advertisement to which I have referred.  The applicant claims that each of those representations is false, misleading and deceptive and likely to mislead and deceive: thus, it says, the conduct of each of the respondents contravenes ss 52, 53(c) and 53(d) of the Trade Practices Act 1974 and constitutes passing off.  The only substantive relief now sought is an injunction

There was no evidence that anyone had actually been misled, deceived or confused by the respondents’ conduct.  Each party, however, called a witness expert in matters of marketing and it is desirable to describe the evidence given by those witnesses before considering in more detail the basis on which the applicant puts its claims.

The applicant read affidavit evidence of Dr George Ramsay Beaton and the respondents read an affidavit of Mr Paul Lindsay Blanket.  Each gave evidence of his qualifications and experience.  There was no suggestion that either was not well qualified to give the evidence he gave.  Both Dr Beaton and Mr Blanket were cross examined.

Dr Beaton’s affidavit evidence was directed to two questions on which he had been asked to express an opinion:

(1)     whether a significant proportion of the public is likely to believe that there is a connection between the TABASCO trademark and the ‘Tabasco Design’ business name and

(2)     whether the use by “Tabasco Design” of the TABASCO mark diminishes the uniqueness of the TABASCO mark and the value of the TABASCO equity.

The two questions raised distinct issues and were considered separately by both experts.  Dr Beaton expressed his conclusions on the first question as follows:

Given they have identical names, a high degree of similarity in get up and common association with the word “hot”... I conclude there is a strong probability a significant proportion of the public is likely to believe that there is a connection between the TABASCO^TM trademark and the Tabasco Design business name.  This connection, in my opinion, is likely to be that one or more of the following apply:

[1]    the companies owning the TABASCO brand of pepper sauce and Tabasco Design are associated,

[2]    one company, most probably the owner of the TABASCO brand of pepper sauce because it is better known than the other by virtue of its longer existence, its more extensive advertising and the more extensive usage of its product, has granted a licence to the other to use the name Tabasco, and

[3]    the owner of the TABASCO brand of pepper sauce sponsors the services of Tabasco Design and has therefore approved or licensed the use of the name Tabasco by Tabasco Design.

It was submitted by senior counsel for the applicant that Dr Beaton was not cross examined on that evidence and, literally, that is true.  He was, however, cross examined on the reasoning on which it was based.  That reasoning may, without I think undue oversimplification, be summarised as follows.  Against a background of received learning (relevant also to the second question) about brand creation and brand recognition, its causes and effects, and the relevant target markets, one compares the labelling and packaging of the sauce with the logo used by the respondents and the advertisement.  In Dr Beaton’s opinion:

... the most important elements of the TABASCO^TM label to consumers in the supermarket are the brand name; the prominence, typographic execution and position on the label of the brand name; the colour scheme of the label and the contents of the bottle; and the shape of the bottle.  Of these elements the most important component is the name being a name to which no other immediate meaning is associated.

Also relevant was the fact that the sauce is, and is known to be, hot “in the gustatory sense of hot”.  As to the respondents’ material, Dr Beaton said this:

In my opinion, the most important elements of the “Tabasco Design” advertisement and business cards are the name TABASCO; the prominence, typographic execution and colour of the word TABASCO and, in the advertisement, the play on the word “hot”.  From my experience in advertising and marketing I am of the view that in the advertising industry “hot” connotes the best of cutting edge creativity.

Dr Beaton then expressed the view that the uppercase lettering, the size of the lettering and its spacing, as between the applicant’s label and the respondents’ material, were very similar as was the “tomato red colour” of the “Tabasco” in the respondents’ material with the colour of the sauce and the red colour used on the applicant’s label and box.  The sauce had two target markets, first the public, particularly those who bought household consumables, and secondly the food service industry.  The marketing and sales executives who comprised the target market for Tabasco Design were included within the former category.  Those considerations in combination, against the background of his evidence in answer to the second question, led Dr Beaton to his affirmative answer to the first question on which he was asked to express an opinion.

Dr Beaton answered the second question in the affirmative also.  Having regard to the learning about branding and its effect on consumer purchasing behaviour, Dr Beaton concluded that the use by the respondents of the name “Tabasco” diminished the uniqueness of the applicant’s brand and thus the value of the brand equity.  That was so for a number of reasons.  First, if a brand is unique, it loses that quality if it is applied to other goods or services.  Secondly, use in categories other than the original category made the brand generic, precluding the granting of licences and thus affecting the value of the brand.  Thirdly, diminution of the “specificity and exclusivity” of a brand diminished and might eliminate the possibility of “brand extension” by the applicant: “brand extension” is a concept much canvassed in the evidence and submissions, and refers to the use of a brand, either by its owner or by the owner’s licensees, in relation to goods or services in categories outside that to which it was originally applied.  Thus, in Dr Beaton’s opinion:

...The connection shown [in earlier paragraphs of Dr Beaton’s affidavit] between TABASCO^TM trademark and the Tabasco Design business name may limit the capacity of the owners of TABASCO to extend profitably the TABASCO brand name.

In a further affidavit in reply to Mr Blanket’s evidence Dr Beaton extended his evidence about brand extension to cover the question of what are described as “range brands”.  A range brand is one which “creates an identity that works across product classes” and “can also be conceived as a spanning symbol that assists customers in seeing relationships between products - relationships that they may have missed”.  In his evidence about brand extension and range brands (to which I shall return later in these reasons), Dr Beaton relied heavily on work of Professor Aaker of the University of California at Berkeley, recognised by both Dr Beaton and Mr Blanket as a leading authority in this field of discourse.

Mr Blanket disagreed with Dr Beaton as to the target market for the applicant’s sauce (but not that for the respondents’ design services).  I need not go to the detail of the disagreement: the difference was largely reconciled in the course of cross examination, and in any event I do not think it matters: it was common ground that the respondents’ target market included people who would be familiar with the applicant’s sauce and its labelling, and what matters is whether some of those people will be misled: in other words, the class of people who matter is those who know of the sauce and come to know of the exhibition designers, not others who happen to be within a target market for the sauce.

Mr Blanket expressed the opinion that:

the way in which the name Tabasco is used in the get-ups of each of the product and the business being considered makes the risk that the word Tabasco (the one common element of their marketing mixes) will cause any person confusion completely negligible.  Taking into account their respective target markets and marketing mixes a prospective client of Tabasco Design would be unlikely even to wonder if there as [sc was] any relationship between the business and the sauce or its maker the first time he or she heard of the business.  Even if such a person did initially wonder whether there was such a relationship I am of the opinion that he or she would quickly realise there was no connection once exposed to the most basic information about the business.

Mr Blanket took the view that the respondents’ logo was “strikingly different” to that of the Tabasco sauce.  On the question of brand extension, Mr Blanket referred to research by Aaker and Keller reported under the title, “Consumer Evaluations of Brand Extensions” in the Journal of Marketing Vol 54, Jan 1990: that research Mr Blanket took to indicate that success in transferring a brand from one class of product to another depends on two factors, one being “transferability of skills and assets” (intended, apparently, to refer to characteristics of the brand itself, characteristics required to make it effective in relation to the new product) and the other being “complementarity” (a requirement that there be some natural association in the minds of consumers between the brand and the new product).  On that footing, Mr Blanket expressed the view that as “Tabasco” met neither requirement, it was extremely unlikely that consumers would perceive “Tabasco Design” to be connected to (or a brand extension of) Tabasco sauce.  Additionally, the respondents’ target market, comprising senior marketing professionals, could be expected to understand the concept and principles of brand extension and so would be less likely than the average consumer to perceive a relationship between the exhibition designers and the makers of the sauce.  Similarly, in relation to the advertisement, the target market would expect an advertisement promoting a service to be “leading edge” in its “tone of voice”, that is the manner in which the advertisement conveyed its message:

Tabasco Design’s use of the sauce imagery in the advertisement which appeared in B&T is likely to be recognised by marketing professionals as utilising a “cheeky” tone of voice to attract attention to the service it offers to that market rather than as suggesting that there is an association between Tabasco sauce and Tabasco Design.

Dr Beaton’s evidence in reply was directed largely to what Mr Blanket had to say about brand extension: Dr Beaton’s comments were in summary that the research relied upon by Mr Blanket was merely one survey and could not be taken to suggest any clear conclusion but rather to indicate an area in which further work should be done, significant further work being reflected in Professor Aaker’s later writing on the subject of “range brands” (to which I have already referred and will return).

Analysis of applicant’s claims

The primary argument of senior counsel for the applicant was along the following lines.  The name “Tabasco” has for a long time been distinctive in Australia (and elsewhere) of the applicant and its goods.  The word has not been used in Australia (apart from the use by the respondents) to describe the goods or services of anyone else.  Further, “Tabasco” is distinctive: whether or not it is properly to be described as a coined word, certainly it is not an ordinary word in the English language; it is inherently distinctive and has, in any event, become distinctive in fact of the applicant and its product due to a combination of its longstanding exclusive use and the distinctive nature and quality of the product itself: a particular hot, spicy sauce.  Thus it is likely that many of those who hear of Tabasco Design, or are within the respondents’ target market, will know Tabasco as the sauce and will have previously have heard the word “Tabasco” used only as the name of the sauce: Mr Blanket gave evidence in cross examination that that was his own experience.  So far, the respondents did not disagree.

Thus, the agreement continued,  the applicant had an exclusive name and mark, with an exceptionally strong reputation.  The strength of the brand was such that it was properly to be regarded as capable of becoming a range brand: its capacity for brand extension was virtually unlimited.  Counsel relied on the evidence as to the range of goods and outlets to which the brand had been applied in the United States as support for the proposition that the brand was capable of extension into disparate categories of products.  A brand with those capacities was valuable commercial  property.

By selecting the name “Tabasco” knowing its provenance and so as create the impression that the respondents were “hot” designers, the respondent attempted deliberately to appropriate and to trade off the applicant’s reputation.  In other words, the respondents were:

...actuated in adopting the style complained of by the dishonest motive of filching some part of the [applicant’s] reputation,

so that:

the Court will not be astute to find that this nefarious design has failed.

Midland Counties Dairy Ltd v Midland Dairies Ltd (1948) 16 RPC 429 at 435.  Particularly, the Court should conclude that among those who dealt with Tabasco Design, or heard of it, there would be a number who would conclude that there was a connection of some kind, possibly involving sponsorship, a licence or at least permission, between the applicant and the respondents.  Since in fact there was no such connection, the applicant was entitled to succeed both under the Trade Practices Act and in passing off.

The applicant sought support for that argument in a well known series of cases commencing with Radio Corporation Pty Ltd v Disney (1937) 57 CLR 448 and extending to Twentieth Century Fox Film Corporation v South Australian Brewing Co Ltd (1996) 66 FCR 451.  In Disney the High Court held that the author of the figures “Mickey Mouse” and “Minnie Mouse” should succeed in his opposition to an application to register the words “Mickey Mouse” and “Minnie Mouse” as trade marks in respect of radio receiving sets: the successful opposition relied on s 144 of the Trade Marks Act 1905 which forbade registration of a mark “the use of which would by reason of its being likely to deceive or otherwise be deemed disentitled to protection in a court of justice”.  Latham CJ succinctly expressed the reason for the opponents’ success, at 453, thus:

The opponents have, in my opinion, shown that the names and the figures are so closely associated in the public mind, in Australia and elsewhere, 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 Walter E. Disney.... .  This, the evidence shows, would be the case whatever the nature of the goods to which the names were attached.  It is very seldom indeed that there can be a world-wide association of ideas in connection with a particular name or figure, but the evidence shows that this association does exist in the present case.  A proposed trademark should not be registered if it involves “a misleading allusion or a suggestion of that which is not strictly true”... .  Thus, in my opinion, these marks should not be registered.

It may be mentioned, in passing, that Dixon J, at 459 expressed scepticism that the facts which required refusal of registration would support an injunction, under the general law, to restrain the applicant’s use of the marks.

Secondly there are the cases arising from attempts to take advantage of the success of the film Crocodile Dundee; Hogan v Koala Dundee Pty Ltd (1988) 20 FCR 314 and Hogan v Pacific Dunlop Ltd (1988) 83 ALR 403; (1989) FCR 553.  In Koala Dundee the respondents had two shops in which they sold various “gift” items; on the shops there were signs, and on the goods sold in them there were labels, showing a koala clad and equipped so as to bring to mind the character Mick Dundee in the film.  The respondents were restrained from using those images.  Pincus J accepted that people were likely to think that, if the images were used under a licence, the actor Paul Hogan’s face would not have been replaced by that of a koala, nor would have mention of Paul Hogan’s name have been omitted.  His Honour held, however, at 327 that:

there is nevertheless a clear representation of association with the film’s images.  [Counsel for the respondents] pointed out that each of the elements complained of is by itself common enough.  For example, koalas are, as are bush hats and, perhaps less so, hats with teeth in the band and so forth, but the combination of images is something else again.

The complaint in Pacific Dunlop concerned advertisements, on television and by means of posters, for shoes: the advertisements were a spoof or parody of the “knife scene” in Crocodile Dundee.  Gummow J granted relief by way of declaration and injunction and his Honour’s decision was upheld (by majority) on appeal.  Gummow J (83 ALR at 426, 427) stated the principle thus:

...the action is concerned with misrepresentation, and with a particular type of misrepresentation involving use of the image or indicium in question to convey a representation of a commercial connection between the plaintiff and the goods or services of the defendant, which connection does not exist.  This case, like 10th Cantanae Pty Ltd v Shoshana Pty Ltd [(1987) 79 ALR 299]...is concerned with what will satisfy that requirement of commercial connection.  Again, it is not all representations, made in commerce, as to connection between the plaintiff and the goods or services of the defendant which will suffice.

His Honour proceeded to cite with approval the following passage from the judgment of Goff LJ in H P Bulmer Ltd & Showerings Ltd v J Bollinger SA [1978] RPC 79 at 117:

Not every kind of connection claimed will amount to passing off; for example if one says that one’s goods are very suitable to be used in connection with the plaintiff’s.  On the other hand in my view there can be a passing off of goods without representing that they are actually the well known goods which the plaintiff produces or a new line which is supposed to have started.  It is sufficient in my view if what is done represents the defendant’s goods to be connected with the plaintiff’s in such a way as would lead people to accept them on the faith of the plaintiff’s reputation.  Thus for example it would be sufficient if they were taken to be made under licence, or under some trading arrangement which would give the plaintiff some control over them....

His Honour found (at 429) that the advertisements conveyed a representation that the products advertised were marketed under a commercial arrangement with the applicants which did not exist.  There was no dissent in the Full Court from Gummow J’s statement of the principles: see at 23 FCR at 566-569 per Sheppard J at 578-581 per Beaumont J and at 584-586 per Burchett J: the difference between the majority and Sheppard J related to the “jury question” (General Electric Co (of USA) v General Electric Co Ltd [1972] 1 WLR 729 at 738) whether the advertisements conveyed the misrepresentation found by Gummow J.

10th Cantanae is a similar case.  The question was whether the depiction of a “Sue Smith” in advertisements of a video recorder falsely represented that there was an association between the advertised product and a well known television personality: the Full Court, by majority, held that the advertisements did not convey the representation.

It may be said of all those cases - Disney, Koala Dundee, Pacific Dunlop and 10th Cantanae - that they are illustrative of circumstances where in the public mind the association between a particular image and a particular source is so strong that the evocation of the image in the get up or marketing of a wide range of disparate goods or services will lead people to conclude that there is a commercial connection of some kind between the goods or services and the originator (or “owner”) of the image.  The other cases in the series are perhaps of less direct help to the applicant.  I shall return to Henderson v Radio Corporation Pty Ltd (1960) 60 SR (NSW) 576 in another context.  For the present it is sufficient to say that the defendant sold a record of dance music on the cover of which there was a photograph of the plaintiffs, who were well known professional ballroom dancers.  Sugerman J and the Full Court held that the plaintiffs were entitled to an injunction.  The finding on the “jury question” appears from the judgment of Evatt CJ and Myers J at 591:

Unaided by evidence, one might consider that the dancing figures merely indicate the type of music on the record and that it is not possible to come to the conclusion for which the respondents contend.  But one is not unaided by evidence and, having regard to the fact that the record was primarily intended for professional dancing teachers, and to the uncontradicted evidence of four experts in that field, we are of opinion that the proper finding is that the class of persons for whom the record was primarily intended would probably believe that the picture of the respondents on the cover indicated their recommendation or approval of the record.  The only rational purpose of the wrongful use of the respondents’ photograph on the disc container was to assist the sale of the disc it contained.

Childrens TV Workshop Inc v Woolworth (NSW) Ltd [1981] 1 NSWLR 273 is another case on which plaintiffs succeeded in a similar basis.  The case involved “soft toys” closely resembling certain of the “Muppets” of the television series “Sesame Street”.  Helsham CJ in Eq expressed his relevant findings, at 276, 277, as follows:

...it is well-known that the creators of this type of fictional characters license others to manufacture or deal in the product representations of those characters; a number of witnesses gave evidence of their understanding of such a practice, and this evidence satisfies me that the purchasing public would be well aware of this.  So that the evidence enables me to reach a conclusion, at this stage, that the public believes that plush toys being sold here as representations of the “Sesame Street” characters are being sold under license [sic] from, or by means of some sort of arrangement with the producer of the film, viz Childrens Television Workshop Inc. ...  It may well be, as the evidence would seem to indicate, that this knowledge of the public is of a general and undefined kind.  But it is there, not surprisingly one might think, in this day and age.  I believe it is correct to reach a conclusion that there is an association in the minds of the public between the producer of the television show and the merchandising of toys which are intended to be  representations of the characters in that show.

See also Fido Dido Inc v Venture Stores (Retailers) Pty Ltd (1988) 16 IPR 365 at 371.

Finally (for present purposes), there is the decision of Tamberlin J concerning “Homer’s beer”, Twentieth Century Fox.  The applicants were the producers of “The Simpsons” a television series to which a large segment of the Australian populace is addicted, one of the main characters in which drinks, frequently and not always moderately, “Duff Beer”.  The respondents marketed beer as “Duff Beer”, and in doing so were held to have been guilty of conduct infringing s 52 of the Trade Practices Act and passing off.  Tamberlin J made, at 468, the following findings:

The name “Duff” will induce customers into believing that the product has a connection or association with “The Simpsons” programme, 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 [a group of members of the public with whom the breweries had tried out the notion of marketing “Duff Beer”] 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.

The applicant contended that on the evidence, and having regard to the authorities to which I have referred, I should conclude that relevant people (presumably those who become aware of Tabasco Design) will think there is a business association of some kind - possibly, but not necessarily by way of licence, endorsement, or sponsorship - between it and the makers of Tabasco sauce.  The relevant evidence, apart from the exhibits, is that of Dr Beaton and Mr Blanket, including their evidence as to brand extension and range brands.

As I understood the submissions, the evidence about brand extension and range brands was said to be relevant in this way.  If one has a strong brand - a brand with a widespread and clear reputation in relation to products having particular known characteristics - one may exploit the brand “incremently” by applying it to other products which are appropriate having regard to the characteristics for which the brand is known.  That is brand extension.  Alternatively, one may develop a “vision” as to the “ultimate identity” of the brand and the “product lines” which it will support.  Thus, one looks into the future and forms a view, having regard to the characteristics of the brand, as to the groups of products to which the brand might successfully be applied.  That is the concept of a range brand.  These are matters which are not merely known to marketing professionals as a matter of theory: the application of the theory in practice is something of which consumers are now aware.  A number of examples were given in the evidence: one was the wide range of goods and services to which the Disney names and characters are applied; another, to which considerable attention was given in cross examination, was the extension of the “Dunhill” brand from cigarettes to a wide variety of fashionable products.  That the “Tabasco” brand was capable of similar extension was demonstrated (it was said) by what, on the evidence, had happened in the United States.  Tabasco, to the Australian public (including those to whom Tabasco Design promotes its services) means the sauce, and nothing else.  I should therefore conclude - as the High Court concluded in Disney and as this Court concluded in Pacific Dunlop - that at least a substantial proportion of those who come across Tabasco Design will conclude that there must be some commercial connection between it and the makers of the sauce; particularly, I should not be deterred by the disparate characters of the good and the service.

Senior counsel for the applicant did not base any submissions on the evidence of Dr Beaton as to the similarities which he perceived between the Tabasco Design logo and the applicant’s label.  Apart from obtaining Mr Blanket’s confirmation that he thought the two to be significantly different, his cross examination of Mr Blanket on the point was limited to obtaining his concession of the obvious truth that the name “Tabasco” is the same as the name of the sauce (and that the idea of using the name was likely to have come only from the respondents’ knowledge of the applicant’s product).  I accept Mr Blanket’s evidence on this question: apart from the name, I do not think the similarities between the logo and the label are striking; indeed, I think the two are distinctly different, and I say that bearing in mind that a person looking at the Tabasco Design logo will make the comparison (if a comparison is made) with a recollected impression of the label, not with the actual label at hand.  If there is a misrepresentation of the kind submitted, it arises, thus, simply from the use of the name.

A common characteristic of the cases to which I have referred in which applicants were successful (other than the Fido Dido case which was an interlocutory decision) is that there was evidence of the actual or likely reaction of members of the consuming public: for example, in Henderson evidence of dancing teachers, in the Crocodile Dundee cases evidence of those who saw the products or advertisements and in Twentieth Century Fox evidence of the proceedings of the “focus groups”.  Evidence of actual confusion or deception is not, of course, necessarily required; but, in the absence of such evidence, I must decide the “jury question” assisted by the expert evidence but otherwise based on my own impression.

It is one thing to hold, on the basis of evidence, that members of the public who see a product promoted by reference to a scene from a film or a character from a television series will conclude that there is a commercial connection.  It is another, I think, to conclude in the absence of evidence of actual confusion that someone in the respondents’ target market will take it that the use of “Tabasco” as the name of the provider of exhibition design services has a commercial connection of some sort with the maker of the only product known as “Tabasco”, a spicy and hot sauce.  It is one thing to suppose a connection where the brand “Dunhill”, associated with an “upmarket” cigarette, starts to appear on an expanding range of other - and different - “upmarket” goods (and even then, the expert evidence suggested, one might have wondered rather than jumped to the conclusion that there was an association, when one first saw that occurring); it is another, as a person with marketing responsibilities seeking the services of an exhibition designer, to conclude that a designer whose services are promoted under the name “Tabasco” has a commercial association with the well known sauce of that name.  The far more likely conclusion is, I think, that, without any association or permission the designer has - as the fact is - perhaps cheekily used a name which, by reference to its only other known use, conjures up “hot” associations.

In short, my conclusion is that the respondents, by using the name “Tabasco”, have not been guilty of any of the misrepresentations suggested.  Accordingly that basis of the passing off claim fails; so do the claims under the Trade Practices Act based on the use of the name and the logo.  Before turning to the applicant’s alternative argument supporting its passing off claim, I should deal briefly with the advertisement.  There is no doubt that the advertisement refers to the sauce (“Lousy on your tie”) and its characteristics “hottest” and draws the distinction between Tabasco on your tie (“lousy”) and Tabasco on your exhibit (“great”).  It is to be recalled, however, that the advertisement was published once only, in a trade publication whose readership no doubt comprises largely marketing professionals.  Dr Beaton gave the following evidence in cross examination:

It is the sort of advertisement that you expect to see in the marketing trade press devised by agencies keen to demonstrate their creative talents.  It is cute is it not? - I would use the same adjective, yes.

And it is not, is it, attempting to cause people to think that Tabasco design was connected with the sauce but rather to catch attention and then focus on Tabasco design? - It’s playing and using the properties of the Tabasco sauce name.

It is not the sort of play on properties that you would expect a franchise or of a brand to permit? - I would agree with that, yes, definitely.

And you would expect the marketing professionals who would look at that advertisement to have the same view? - If they intellectualised about it, yes.

That passage demonstrates, I think, why it should not be held that the advertisement conveys a misrepresentation.  In any event, even if there were a misrepresentation, as there is no threat to repeat the advertisement, injunctive relief would be inappropriate.

The second basis on which the applicant claimed to be entitled to succeed in passing off was that the respondents had deliberately sought wrongfully to appropriate to themselves the reputation of the applicant in and in relation to the name and mark “Tabasco”, and had succeeded in doing so.  The applicant relied on the following passage at the conclusion of judgment of Evatt CJ and Myers J in Henderson at 595:

It is true that the coercive power of the Court cannot be invoked without proof of damage, but the wrongful appropriation of another’s professional or business reputation is an injury in itself, no less, in our opinion, than the appropriation of his goods or money.  The professional recommendation of the respondents was and still is theirs, to withhold or bestow at will, but the appellant has wrongfully deprived them of their right to do so and of the payment or reward on which, if they had been minded to give their approval to the appellant’s record, they could have insisted.  In our opinion it is idle to contend that this wrongful appropriation is not an injury to the respondents.  It is as much an injury as if the appellant had paid the respondents for their recommendation and then robbed them of the money.  That injury, and the acknowledged intention to continue to inflict it, is ample justification for the injunction which was granted.

In Koala Dundee, at 326, 327, Pincus J quoted from the judgment of Gummow J in 10th Cantanae at 318, and continued:

It should be noted, in particular, that this passage tends towards treating misappropriation of a reputation as enough, at least where the complaint is by one who might otherwise have been able to get money for licensing the use of his name.  In my reasons in the 10th Cantanae I took a narrower view of the legal rights of such an applicant than did my brethren.  I also remarked of the Moorgate case that (at 305):

         “...The question whether the law of passing off gives it protection to the alleged proprietary right, “in gross”, in the use of a well-known name, is left open.”

That question does not arise directly here, but a cognate one does: whether there is such protection of a well-known image, including a name.  The other two members of the Full Court, in the 10th Cantanae case, used language inclining to support the view that there is such protection.

I was referred also to passages in the judgments in Disney, Childrens Television Workshop Inc and Twentieth Century Fox.  With the possible exception of Koala Dundee, however, the Court found in all those cases a representation of the kind which I have held not to be established here.  The passage cited from Henderson occurs in the context that misrepresentation has already been found, the question being whether, that being so, the applicant had a sufficient interest to support the grant of an injunction (the point is expressed clearly in the concurring judgment of Manning J at 603).  A similar passage in the judgment of Helsham CJ in Eq in Childrens Television Workshop Inc at 282 is directed to the same point.  In any event, as counsel for the respondents submitted, it is clearly established in this Court that misrepresentation is an essential element of the wrong of passing off: it is sufficient to refer to Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 308, 340 (Lockhart J), 356 (Gummow J) and 378 (French J).

On this aspect of the matter the relevance sought to be attributed to the expert evidence, as to brand extension and range brands, was that it tended to show that the applicant had a brand which was capable of use, either by the applicant itself or by licensees of the applicant, in relation to a wide range of goods and services.  The brand was thus valuable property, the value of which was impaired if others, such as the respondents, used it without authority and subject to no regulation or control by the applicant.  But to a large extent the proposition put by the applicant is circular or, perhaps more accurately, question-begging.  I accept - it is not in controversy - that the respondents, in adopting the name Tabasco, sought to take advantage of a well known characteristic of the applicant’s product.  But there is an appropriation only if some property or right is taken and the appropriation, if there is one, is wrongful only if a rule or principle of law forbids it.  The warning in Moorgate Tobacco Co Ltd v Philip Morris Ltd (no 2) (1984) 156 CLR 414 at 445, 446 must be heeded.  Authority binding on this Court requires me to hold that there is no passing off in the absence of a representation of connection between the respondents or its services on the one hand and the applicant or its product on the other.  On the findings I have made, there is no other legal rule or principle which prevents the respondents from using the name “Tabasco Design”, as they have done, in relation to their business of the design and construction of exhibition stands.

Conclusion

For those reasons the application is dismissed with costs.

Associate:

Dated:              18 September 1997