FEDERAL COURT OF AUSTRALIA

INTERLOCUTORY INJUNCTION - Trade Practices Act 1974 (Cth), s 52 - respondent selling tester perfumery products of applicants - whether serious question to be tried in respect of the respondent’s advertising of perfumery products - whether serious question to be tried as to whether the respondent is representing that the sale of such products is endorsed by the applicants

INTERLOCUTORY INJUNCTION - Trade Marks Act 1995 (Cth) - whether there is a serious question to be tried as to whether the respondent has infringed the applicants’ trade marks - where products in question genuine products of the applicants - where sale of products expressly prohibited by applicants

Trade Practices Act 1974 (Cth) ss 52, 53

Trade Marks Act 1995 (Cth) ss 17, 20, 120

Aristoc Ltd v Rysta Ltd [1945]AC 68, cited

Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, applied

Castrol Ltd v Automotive Oil Supplies Ltd [1983] RPC 315, considered and applied

Champagne Heidsieck et Cie Monopole Societe Anonyme v Buxton [1930] 1 Ch 330, cited

Fender Australia Pty Ltd v Bevk (1989) 15 IPR 252, cited

Revlon Inc v Cripps & Lee Ltd [1980] FSR 85, cited

W.D. & H.O. Wills (Aust) Ltd v Rothmans Ltd (1956) 94 CLR 182, cited

PARFUMS CHRISTIAN DIOR (AUSTRALIA) PTY LIMITED

AND ANOTHER v

DIMMEYS STORES PTY LIMITED

NG 798 of 1997

BRANSON J

SYDNEY

2 OCTOBER 1997

REASONS FOR DECISION

BRANSON J

This is an application for interlocutory relief to restrain the respondent from “importing, selling, offering for sale or otherwise dealing” with the product described as “Poison Tendre Authentic Unboxed” in the respondent’s advertising leaflet entitled “Birthday Sale - 144 Years Young”.

The second applicant manufactures and markets perfumes, cosmetics and skin care products.  Since 1 January 1996, the first applicant has carried on business in Australia as the exclusive agent and distributor for the Australian domestic retail market of the products of the second applicant.  The products which the first applicant distributes and sells in Australia on behalf of the second applicant include two fragrances; one known as “Poison” and the other as “Tendre Poison.”

The fragrancePoison has been on the market for a longer period of time than Tendre Poison and is a considerably more expensive product.  The second applicant is the owner of the following registered marks in Australia in respect of Class 3 goods which include perfumery products:  the words “Christian Dior”;  the label device “Christian Dior”;  the word “Poison”;  and the words “Eau Tendre”, although the limit of that last registration is unclear to me.

The words “Tendre Poison” are not a registered trade mark in Australia, nor, I am prepared to assume, are the words “Poison Tendre”.

The second applicant has authorised the first applicant to use the above trade marks in Australia, although the first applicant is not recorded under the Trade Marks Act 1995 (Cth) (“the Trade Marks Act”)  as an authorised user of the trade marks in Australia.

The second applicant has authorised no person apart from the first applicant to use its trade marks in Australia.  The applicants have a strict marketing policy.  First, they authorise two types of retail outlet only; one known as “fragrance only” outlets, the other as “full line outlets” which include cosmetic and skin care products.  Full line outlets are required to have trained beauty consultants who are trained by the applicants.

The applicants require Christian Dior products to be displayed at a distinct section of a shop counter and to have their signs displayed.  The applicants do not authorise Christian Dior products to be displayed intermingled with competitors’ products.  The applicants must approve of the standard of the advertising and displays used by a retailer.  They insist on a very high quality of advertising and displays in order to maintain the prestige image of Christian Dior products.  The respondent does not meet the applicants’ standards and is not approved to sell Christian Dior  products.

In addition to importing into Australia products of the second applicant intended for retail sale to the public, the first applicant imports into Australia 100 millilitre containers of the fragrance Tendre Poison which are provided without charge to distributors as “testers”.  The tester containers do not come in the same high quality and coloured packaging as the fragrance containers intended for sale.  They come in simple grey boxes with white lettering on them, which includes the words “Not for Sale”.  The tester containers themselves are also marked “Not for Sale”.  The testers are not intended by the second applicant to be displayed in their boxes, which are designed to protect them from damage in transit.

The respondent has caused to be published and distributed an advertising leaflet containing a large number of advertisements, principally for inexpensive clothing, but also including other household and domestic items.  Prominently on the front page of this leaflet appears a reproduction of a photograph of two containers of the Christian Dior fragrance Tendre Poison  Eau de Toilette.  Over-printed on the photograph appear the words “Large 100ml size.”  Adjacent to the photograph appear the words “Christian Dior Poison Tendre Authentic Unboxed” and the price “$59.99 ea.” and in smaller print “Warehouse Scoop Buy!  100ml Eu [sic] de Toilette.”

On 22 September 1997, an employee of the first applicant went to the respondent’s shop in Richmond, Victoria and purchased a bottle of the fragrance Tendre Poison as illustrated in the respondent’s advertising leaflet, for the price advertised in the leaflet.  She received the bottle in a grey box.  The bottle and the box are identified as the tester product which is imported into Australia by the first applicant.  There is no evidence before me of how the respondent came into possession of such tester products.  However, it is not suggested that the fragrance inside the bottle is other than the second applicant’s fragrance Tendre Poison.

Two photographs taken of the respondent’s store have been placed in evidence.  One photograph shows a window display of the bottles of the fragrance Tendre Poison displayed against grey boxes with white printing on them.  The words “Tendre Poison” appear on such boxes as well as other writing which cannot be read, but the appearance of the boxes as shown in the photographs is consistent with their being identical to the box which was purchased from the respondent by the employee of the first applicant.

A poster appears beside the display which reads “Birthday Sale Christian Dior Poison Tendre $59.99”.  The other photograph appears to be taken through the entrance of the respondent’s shop.  It shows a large poster at the entrance at approximately eye height, which reads “Birthday Sale Christian Dior Poison Tendre 100ml $59.99”, and a display rack containing grey boxes, apparently being the boxed Tendre Poison tester product.  It is contended by the applicants that by reason of the above matters, the respondent has engaged in conduct in trade or commerce which is misleading or deceptive or likely to mislead or deceive within the meaning of s 52 of the Trade Practices Act 1974(Cth) (“the Trade Practices Act”).

It is further contended that the respondent has, first, represented that the fragrance which it is advertising and selling has a particular standard, quality or value; secondly, represented that the fragrance product which it is advertising and selling has a sponsorship or approval that it does not have; and thirdly, pretended that Dimmeys Stores has itself a sponsorship or approval or affiliation which it does not have, contrary to subsections 53(a), (c) and (d) of the Trade Practices Act.  In addition, it is contended that the respondent has passed off the fragrance which it is advertising and selling as the second applicant’s goods and that it has infringed the second applicant’s registered trade marks “Christian Dior”, “Poison” and “Eau Tendre”.

No evidence has been placed before the Court on this application by the respondent.  An interlocutory injunction may only be granted in the circumstances of this case where first, there is a serious question to be tried; secondly, an award of damages would not provide an adequate remedy to the applicants and thirdly, the balance of convenience favours the grant of the injunction (Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148). 

I am satisfied in the circumstances of this case that there is a serious question to be tried between the parties as to the possible contravention by the respondent of s 52 of the Trade Practices Act in the publication and distribution of the advertising leaflet to which I have already referred.  First, in my view, there is a serious question to be tried as to whether the words which I have set out above are likely to mislead an ordinary member of the buying public, unburdened with a detailed knowledge of Christian Dior perfumes, into thinking that there is a Christian Dior fragrance sold under the name “Poison Tendre”.  Such a person might be likely, it could be argued, to attach in his or her mind the reputation of the expensive fragrance marketed under the name Poison to such non-existent product, and to purchase the advertised product in the belief that he or she is obtaining the fragrance Poison.

The failure of the respondent to place any explanation before the court as to its apparent deliberate decision to reverse the order of the words “Tendre Poison” in all of its advertising (I exclude of course photographic advertising of the product and packaging in question), allows me to draw the inference otherwise to be drawn from such conduct with greater confidence; that is, that it was conduct which was believed might mislead the public in the way that I have outlined.

I am further satisfied that there is a serious question to be tried between the parties that the relevant wording of the advertising leaflet is likely to mislead ordinary members of the public, unburdened with the detailed knowledge of Christian Dior perfumery products, into concluding that the product advertised for sale by the leaflet is a product which Christian Dior authorises for sale, albeit that, for some unexplained reason, the particular examples of the product advertised are not in the usual Christian Dior boxes.  In other words, there is likely to be an expectation on the part of members of the public that what they will be able to purchase, if they respond to the advertisement, is a bottle of perfume which will be identical to that which they would be able to obtain if they went to an authorised Christian Dior outlet, purchased a boxed bottle of perfume, and discarded the box.  Such is not the case;  the product offered for sale by the leaflet is not available for purchase at authorised Christian Dior outlets.  A purchaser is not able to obtain from the respondent a product at a price cheaper than he or she could obtain the same product at a Christian Dior authorised outlet.

I am further of the view that there is a serious question to be tried as to whether the display of the tester product at the respondent’s store, along with the posters which I have already described, is also a contravention of s 52 of the Trade Practices Act for the same reasons which I have outlined in respect of the advertising leaflet.

I turn to consider the applicants’ contentions under the Trade Marks Act.  Section 17 of the Trade Marks Act defines a trade mark as follows: 

“A “trade mark” is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.”

The effect of registering a trade mark is provided for in ss 20(1) and (2), which state:

“(1)     If a trade mark is registered, the registered owner of the trade mark has, subject to this Part, the exclusive rights:

            (a)        to use the trade mark;  and

            (b)        to authorise other persons to use the trade mark;

in relation to the goods and/or services in respect of which the trade mark is registered.

(2)       The registered owner of a trade mark has also the right to obtain relief under this Act if the trade mark has been infringed.”

Subsection 120(1) of the Trade Marks Act sets out what will constitute an infringement of a registered trade mark:

“(1)     A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods and services in respect of which the trade mark is registered.”

The unusual feature of the present case is that the products being sold by the respondents, being products comprised of a bottle and perfume inside a bottle, are in fact genuine Christian Dior products.  It was accepted by both sides before me that ordinarily a registered proprietor cannot succeed in a claim for infringement where what is being offered for sale are genuine goods upon which the registered proprietor’s mark is properly used, it having been placed there as a badge of origin by the registered proprietor itself  (Champagne Heidsieck et Cie Monopole Societe Anonyme v Buxton [1930] 1 Ch 330; Fender Australia Pty Ltd v Bevk (1989) 15 IPR 252).   It is, at least, reasonably open to be contended that the philosophical basis for this rule is that a proprietor of a trade mark expressly or impliedly consents to the use of its trade mark in such circumstances  (Revlon Inc v Cripps & Lee Ltd [1980] FSR 85).

The essential function of a trade mark is to denote a connection in the course of trade between goods and the proprietor of the trade mark:  (Aristoc Ltd v Rysta Ltd [1945]AC 68 particularly per Lord Macmillan at 97).  Lord Wright said, in the Aristoc case at 101: “The fundamental idea of the function of a trade mark ... [is] to indicate the origin of the goods.”

His Lordship went on to explain at 102 that:

“The word “origin” denotes at least that the goods are issued as vendible goods under the aegis of the proprietor of the trade mark.”

This interpretation was approved by the High Court in W.D. & H.O. Wills (Aust) Ltd v Rothmans Ltd (1956) 94 CLR 182.

In the present case, the second applicant has not issued the goods the subject of this proceeding as vendible goods, indeed, it has clearly labelled them both on the box and on the bottle as “not for sale”.  Moreover, it has not sold them to any person, nor authorised their sale to any person.

The circumstances of this case thus seem to me to have some similarity with those considered by Price DJ in Castrol Ltd v Automotive Oil Supplies Ltd [1983] RPC 315.  In that case, oil products manufactured in Canada by an associated company of the plaintiff were sold in England by the defendant.  The plaintiff owned the relevant Castrol trade mark both in Canada and in England.  It had entered into an agreement in Canada with its associated company which provided that the marks were not to be used by the associated company outside of Canada. 

The containers in which the Canadian oil products were contained had a notice printed on them to this effect:

“No licence is granted or is to be implied by the sale or supply of this container under or in relation to any patent trade mark or copyright of or owned by Castrol Limited anywhere in the world outside Canada.”

The learned Deputy Judge found that it was clear in that case that the registered proprietor had not consented to the use of the trade mark in the United Kingdom and that the plaintiff had established a case for infringement of the Castrol trade mark in England.

In my view, there is a serious question to be tried in this case as to whether the respondent has infringed the second applicant’s trade marks, “Christian Dior” in its two forms and “Poison”  (I make no finding with respect to “Eau Tendre”), on the basis that the second applicant, by making it clear by markings on the product that it was not for sale, has indicated that no express or implied consent is given to the use of the marks in connection with the sale of the goods. 

It is not necessary in this case, for me to consider the other bases upon which the applicants claim relief.

The damage which the applicants may suffer as a result of the conduct of the respondents of which complaint is made is not simply the loss of certain sales.  It may be open to be doubted whether many of those who are likely to purchase perfume from the respondent would otherwise be likely to purchase from authorised Christian Dior distributors.  The principal damage which the applicants fear is damage to the reputation of the name, Christian Dior, as a name associated with exclusive, high quality and expensive perfumery products.  The difficulty of measuring such damage in monetary terms means, in my view, that damages will not be an adequate remedy in this case, should the applicants ultimately succeed in their claims against the respondent.

I turn to consider the balance of convenience.  As is mentioned above, the respondent has placed no evidence before me on this application.  There is as nothing before me to suggest other than that the respondent is simply advertising and selling the tester products for the purpose of making a profit on such sales.  Such profit is, I am entitled to assume in the circumstances, capable of being readily calculated.  On the other hand, there is reason to think that if, at the end of the day, the applicants have a legitimate complaint against the respondents, their damages may not be readily measurable.  It was accepted before me that the applicants have shown the financial means to stand behind an undertaking as to damages.

I find that the balance of convenience favours the making of an interlocutory injunction or injunctions in this case.  The applicants are to bring into Court short minutes of order for interlocutory relief in accordance with these reasons.

The question of the costs of the interlocutory application are reserved to the trial judge in this matter.

Associate:

Dated: