FEDERAL COURT OF AUSTRALIA

In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd [2020] FCA 193

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) and on the grounds set out in s 37AG(1)(a), disclosure, by way of publication or otherwise, of:

(a)    the dollar figure amounts contained in Tabs 1 and 2 of Confidential Exhibit DW-2 to the affidavit of Denny Warnick affirmed 16 July 2018;

(b)    Confidential Exhibit VS-4 to the affidavit of Valerie Sarigumba affirmed 17 September 2019; and

(c)    the information highlighted in green in the applicant’s submissions in support of its request for suppression orders dated 18 September 2019, (Confidential Material),

is restricted to persons to whom the applicant permits access and who have provided a confidentiality undertaking in the form agreed by the parties.

2.    Order 1 shall operate until 4 pm on 26 February 2025 or further order.

3.    The parties have liberty to apply to the Court to extend the date referred to in order 2, provided that any such application is filed with the Court at least one month before the time expires.

4.    The matter be listed for further case management on a date to be fixed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

KATZMANN J:

1    What is the line between inspiration and appropriation? That is the question at the heart of the dispute in the present case.

2    Since 2016 the second and third respondents, Benjamin Kagan and Andrew Saliba, and later the first respondent, Hashtag Burgers Pty Ltd (“Hashtag Burgers”) have operated a growing number of burger restaurants in Australia under the name “Down-N-Out” or a variant thereof (“DNO” or “the DNO marks”).

3    The applicant is an American corporation. For many years it has owned and operated a growing number of burger restaurants in the United States and has periodically showcased its business in several other countries, including Australia, by staging “pop-up” events. It also owns a number of registered trade marks used in connection with the business including a number which include the name “In-N-Out” (“the INO marks”).

4    The applicant claims that the DNO marks are deceptively similar to the INO marks. Indeed, the applicant contends that they were adopted by the respondents for this very reason. Based on those premises, it claims that the respondents have infringed their registered trade marks, committed the tort of passing-off, and engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law (“ACL”). It sought damages, including additional, aggravated and exemplary damages, as well as declaratory and injunctive relief.

5    On 12 December 2017 an order was made for the separate determination of all issues except for the quantum of any pecuniary relief. But on the last day of the hearing the applicant abandoned its claim for aggravated damages and did not press its claims for additional or exemplary damages. Furthermore, notwithstanding the terms of the separate question order, the applicant made no submissions on the other forms of relief it sought in its originating application. It simply asked the Court to make findings of liability and submitted that it would be “most convenient” to address the final form of declaratory and injunctive relief in the light of the Court’s findings. The applicant was silent about the other forms of non-pecuniary relief.

6    Consequently, this judgment is only concerned with liability.

The evidence

7    Evidence in support of the application was given by Denny Warnick, Anna Elizabeth Harley, Sanil Khatri, Felipe Sandrini Pereira, and Elisabeth Jane White. With the exception of Mr Warnick, each of these witnesses is a solicitor employed by Baker McKenzie, the lawyers for the applicant. Mr Warnick is the applicant’s Vice-President of Operations.

8    No evidence was offered by Mr Kagan or Mr Saliba. The only witnesses for the respondents were Danielle Gleeson, a solicitor in the firm of Yates Beaggi Lawyers, which represented the respondents at the trial, and Andrelise Latreille, one of the firm’s legal secretaries. Ms Gleeson’s evidence was directed to the use by other fast-food businesses in Australia of the same or similar colours to those used by the parties to the present proceeding. Ms Latreille deposed about visiting the respondents’ restaurants on 24 June 2019 and what she saw at each venue.

The facts

9    Most of the facts were either admitted or not in dispute.

The applicant’s business

10    The In-N-Out Burger business was founded in Baldwin Park, California, in 1948. It was incorporated in California on 1 March 1963. The applicant is, and always has been, a family-owned private company. It has a chain of permanent restaurants which extends throughout California, Arizona, Oregon, Nevada, Texas, and Utah. As at May 2016 there were over 300 such restaurants. It continues to expand at a rate of 15 to 20 restaurants a year. Many of the restaurants are situated on major thoroughfares that are subject to high motor vehicle and/or foot traffic, including, for example, on Dean Martin Drive in Las Vegas (since July 1993), and in high profile tourist areas such as Sunset Boulevard in Hollywood (since December 1994), South Sepulveda Boulevard in Westchester within a mile of Los Angeles International Airport (“LAX”) (since January 1997), and on Fisherman’s Wharf in San Francisco (since September 2001). Many foreign tourists visit these restaurants. The applicant’s customers also include international visitors and flight crews In-N-Out Burger is commonly referred to merely as In-N-Out. In-N-Out restaurants are also situated near universities with international students, such as the In-N-Out restaurant in Austin, Texas, which is adjacent to the University of Texas.

11    The applicant is the registered owner of six Australian trade marks. Three are composite or stylised marks and three are word marks. The three word marks are IN-N-OUT BURGER, ANIMAL STYLE, and PROTEIN STYLE. Notwithstanding some evidence that might suggest otherwise, it is no part of the applicant’s claim that the latter two marks have been infringed. In these circumstances, it is only necessary to record the details of the registration of the first.

12    The applicant’s submissions incorporate a table setting out the relevant information which is reproduced below.

13    This is the composite mark featuring a commonly deployed red and yellow colour scheme (“the In-N-Out logo”):

14    The applicant has never licensed or authorised the respondents to use any element of its In-N-Out branding in relation to their business activities or otherwise.

15    The applicant’s restaurants serve a basic menu consisting of three burgers, the “Double-Double” cheeseburger and hamburger, French fries, drinks, and “secret menu” variations to basic menu food items, such as “double meat”, “3x3”, “grilled cheese”, “protein style”, “animal style”, “4x4”, “flying Dutchman” and “Neapolitan shake”. The so-called “secret menu”, paradoxically often marketed as the “not-so-secret menu”, has been offered by all the applicant’s restaurants since at least the early 1960s and has been promoted on the applicant’s website since at least 2005.

16    The applicant has used and promoted its business by reference to a number of key branding elements. They include the names and trade marks IN-N-OUT and IN-N-OUT BURGER, both of which have been used since the inception of the business in 1948 and, since at least 1967, the In-N-Out logo and combinations of the above. These branding elements have been used prominently in advertising and promotion of the applicant’s goods and services across the world.

17    The In-N-Out logo is prominently displayed on signposts located in the vicinity of many of the applicant’s restaurants. Some signs featuring the logo are attached to poles and stand at heights of up to 80 feet (approximately 24 metres) from the ground. These signs are positioned so that they are visible from motorways and are illuminated in the evenings and when visibility is reduced due to poor weather. The exterior signpost to the In-N-Out restaurant near LAX can be seen from planes as they land at the airport. Since 1948, all In-N-Out restaurants have displayed the In-N-Out logo outside the buildings. These signs measure at least 6.3 x 9.7 feet (1.9 x 2.9 metres). The In-N-Out logo has also featured on signs used since 1948 to direct customers to the drive-through at the restaurants and on the menu board adjacent to the two-way speakers. Elements of the In-N-Out branding are displayed inside the applicant’s restaurants on menu boards, posters, and other point of sale materials, including the wrapping used for burgers and the paper trays on which the food is served at the restaurants.

18    Alcohol is not sold at any of the applicant’s US restaurants but customers are permitted to bring alcohol into at least some of them.

19    In about 1988, the applicant introduced “Cookout Trailers” to the market. Since then, these mobile versions of the In-N-Out restaurants have been used for corporate fundraisers, charitable events, picnics, parties, reunions, and other events. They have been operated and staffed by employees of the applicant and have prominently displayed the In-N-Out logo. Every year since 2008, the Cookout Trailers have been hired to provide food at Vanity Fair’s annual Oscars after-party held in conjunction with the Academy Award ceremonies in Hollywood.

20    The applicant’s marketing strategy includes radio, television and local store marketing, and print advertising. Since about August 1973, the applicant has also advertised on billboards displayed alongside motorways and other roads and in bus shelters. Since 1985, the applicant has distributed bumper stickers and car decals featuring the In-N-Out logo. In-N-Out is also promoted by word of mouth.

21    The applicant operates three company stores and an online store from which merchandise carrying the In-N-Out branding is available for sale. The company stores were established to meet the demand for souvenirs and collectibles carrying the branding. One store is located in Baldwin Park, California and two in Las Vegas, one on Dean Martin Drive and the other on south Las Vegas Boulevard. But the evidence does not indicate when the company stores were opened.

22    The applicant launched its own website in about June 1999. The online store was established in May 2004. Members of the public from throughout the world, including Australia, can purchase merchandise through the online store. This merchandise includes T-shirts, caps, jackets, key-rings, and similar accessories. In 2013 there were 37,631 visitors to the website from Australia. In 2014 there were 50,108. In 2015 it climbed to 61,988. In 2016 it rose even further to 78,098.

23    Since about 2011, the applicant has also been active on social media. It has operated and maintained a Facebook page, an Instagram page, and a Twitter account. The domain names of all these accounts include the word “innout”.

24    The applicant has what Mr Warnick described as “a significant and competitive presence in the US chain restaurant industry” and its revenue in each financial year from 2011 to 2017 has also been significant.

25    The applicant regularly hosts pop-up restaurant events outside the United States where consumers are exposed to the applicant’s goods and services and the In-N-Out branding. Mr Warnick described these events in his affidavit:

Each pop up restaurant event is for a limited period of time, on a single day, at a location that is advertised a day or two before the event, including on social media. The events are carefully managed to ensure consumers have the same high quality food and friendly service at each location. These events are very popular and tend to attract social media interest from members of the public, including previous ln-N-Out customers who have visited the US, as well as new customers who may never have been to an ln-N-Out restaurant in the US. At each pop up event, ln-N-Out sells food and merchandise.

26    Alcohol is not sold by the applicant at any of these events.

27    The applicant has hosted eight such events in several locations in Australia over the last seven years. The first was at Kings Cross in Sydney on 24 January 2012, the second in Darlinghurst, Sydney, on 20 January 2013, the third in the Melbourne CBD on 5 November 2014, the fourth in Parramatta, Sydney, on 14 January 2015, the fifth in Surry Hills, Sydney, on 20 January 2016, the sixth in Darlinghurst on 18 January 2017, the seventh in Northbridge, Perth, on 16 January 2018, and the eighth in Windsor, Melbourne, on 6 March 2018. These events have been very popular. Despite the limited advertising before they took place, there were often long queues to get into the restaurants and burgers were nearly or completely sold out within the first or second hour of opening.

28    At the pop-up events the applicant sold burgers, associated food and drinks, and In-N-Out branded T-shirts, and the applicant’s trade marks and branding were on display. Mr Warnick gave evidence that “up to” 300 burgers were sold at each such event. Records exhibited to his affidavit show that at the Surry Hills pop-up in January 2016, 238 burgers, 187 servings of chips, 291 drinks, and 192 T-shirts were sold. By January the following year the numbers had increased significantly. For example, 400 burgers and 420 T-shirts were sold at the Darlinghurst pop-up. Figures for sales in 2018 were not in evidence.

29    I will deal with the contentious question of the applicant’s reputation later in these reasons when it arises for consideration.

The respondents’ conduct

30    In June 2015, following the fourth In-N-Out pop-up event in Parramatta in January that year, Messrs Kagan and Saliba held a “Funk N Burgers” pop-up burger event at the Lord Gladstone Hotel in Chippendale, Sydney.

31    The Facebook promotion for this event announced:

This time on the menu we have the legendary In’N’Ou … I mean the Down’N’Out burger served up ANIMAL STYLE for all you fatties. Go single or double‑double that sexy MOFO.

32    On 10 June 2015 Messrs Kagan and Saliba worked with a graphic designer, John Paine, to prepare a flyer and logo for the event.

33    Mr Saliba asked Mr Paine to make “a funk n burgers sign like in n out burger” and emailed him a copy of the In-N-Out logo:

34    Mr Paine produced the following logo:

35    Mr Paine also produced the following flyer:

36    On 31 January 2016 Messrs Kagan and Saliba hosted another pop-up event advertised on Facebook as “FUNK‑N‑BURGERS: DOWN‑N‑OUT (IN‑N-OUT TRIBUTE) ~FREE PARTY”. The promotion stated (without alteration):

WE ARE BACK FOR 2016!! To kick of[f] the new year we are bringing back the MOST POPULAR burger from last year … the In-N-Ou..*cough* I mean … Down-N-Out Burger – served ANIMAL STYLE for all you fatty boombas!

And if that wasn’t enough, every burger will be accompanied by ANIMAL STYLE fries with liquid cheese! Hrrrrrggggggggg…

Still not satisfied? DOUBLE-DOUBLE that sucka and turn your meal into a heart attack on a plate.

37    Sometime before 5 May 2016, Messrs Kagan and Saliba decided to open their first pop-up and call it DOWN-N-OUT. They again enlisted Mr Paine’s help with the design features. On 9 May 2016 Mr Saliba contacted Mr Paine, using the pseudonym “Mr Seaman”, attaching copies of three logos which the exchange indicates he designed himself (“the Saliba logos”):

38    The font is different from that used in the INO marks, but the difference is unlikely to register with the viewer without a side-by-side comparison. The colours, however, were identical.

39    On about 13 May 2016 Messrs Kagan and Saliba hired a second designer, Olivia Tucker of Tablou Collective, to assist in the design and fit-out of the pop-up restaurant. Mr Kagan supplied her with copies of the Saliba logos.

40    On 25 May 2016 Mr Paine, who was designing the colour scheme for the Down-N-Out placemats and posters told Mr Kagan that he would use yellow so that “it matches In and Out branding”. Mr Kagan said that was “cool”. Although he flirted with the idea of playing with the colours to give them “that muted newspaper fade”, the idea was not taken any further, at least at that stage.

41    The same month the Down-N-Out Facebook page was launched. The initial cover photograph featured the following logo:

42    On 30 and 31 May 2016 Mr Kagan sent a media release to a number of organisations including Pedestrian Group TV and Timeout Magazine. It was entitled “Sydney’s Answer to In-N-Out Burgers Has Finally Arrived!” It read:

SYDNEY'S ANSWER TO IN-N-OUT BURGERS HAS FINALLY ARRIVED!

Hashtag Burgers, the masterminds behind BURGAPALOOZA, are teaming up with the former Head Chef of Mr. Crackles to bring In-N-Out inspired burgers to Sydney's CBD for ONE WHOLE MONTH.

Launching Wednesday June 7th, the cheekily named DOWN-N-OUT will be popping up at the SIR JOHN YOUNG HOTEL on the corner of George and Liverpool Street, in the heart of the CBD.

The menu will be kept simple, similar to the original In-N-Out, with the addition of a vegetarian option. Of course there will be shakes and a plethora of secret menu hacks such as Animal Style and Protein Style. These will be leaked to the public as the pop-up continues.

In true Hashtag Burgers style, this won't simply be a food offering.

There are a few surprises planned for this pop-up and the Sir John Young Hotel is in the process of being redecorated – the details of which are being kept secret however you can find some hints on the DOWN-N-OUT Facebook page.

Hashtag Burgers will be partnering with Murrays Brewery to bring a craft beer pairing for the meal. They will be launching with Murrays’ famous Angry Man Pale Ale on tap.

This pop-up is the first in a series of plans by the Sir John Young Hotel to reboot its look and to revitalize the area which has been damaged by the lockouts. They plan to renovate the bar in the near future.

Down-N-Out will be launching at the SIR JOHN YOUNG HOTEL on the corner of George and Liverpool street on June 7th until the 6th of July.

Follow the DOWN-N-OUT Facebook page for more information[.]

43    On 4 June 2016 the following image was posted on the Tablou Instagram page:

44    Alongside the image the following announcement was made:

We’re teaming up with the @hashtag_burgers boys over this rainy weekend to bring In-N-Out down under …

45    Using the account @hashtag_burgers, Mr Kagan or Mr Saliba (or both) replied with these emojis: .

46    On about 7 June 2016, within six months of the applicant’s Surry Hills pop-up, Messrs Kagan and Saliba opened their “cheekily-named” pop-up burger restaurant. The following sign (“original DNO logo”) was displayed at various locations, including above the entrance to the restaurant and on the wall above the open kitchen:

47    At some point in time that month, the following neon sign appeared outside the entrance:

48    Inside the restaurant, a blackboard menu was on display:

49    On 8 June 2016, Mr Khatri attended the restaurant and took some photographs. He also inquired about the “Secret Menu” and was told that it was “an Animal Style or Tiger Style burger or fries, or a Protein Style burger”. When he was asked what Tiger Style was, he received the answer “just Animal Style”.

50    On 17 June 2016, the applicant wrote to Messrs Kagan and Saliba, politely requesting them to stop using its trade marks, ANIMAL STYLE and PROTEIN STYLE, and to select a different name and logo which sufficiently distinguished their business from the applicant’s so as to avoid confusion. The letter, which was signed by its Associate General Counsel, Valerie Sarigumba, was in the following terms:

We at In-N-Out Burger have heard from numerous international customers regarding your “Down-N-Out” tribute to In-N-Out Burger in Sydney. We were flattered to hear that you have admired our food and one-day events in Australia such that you decided to conduct a similar event. We also appreciate those who know what it means to have a good burger.

Nonetheless, the Down-N-Out event significantly trades off our well-known and valuable brand. For example, we note that as part of the event you have used the names ANIMAL STYLE and PROTEN STYLE, which are our registered trade marks, and adopting the name “Down-N-Out” displayed with a yellow arrow sounds and looks very similar to In-N-Out’s name and logo.

This may lead to some confusion amongst the Australian pubic that the In-N-Out is associated with the event (as reflected in some media reports to date). Even if you had the best of intentions, we still hope to avoid any such issues.

We therefore request that you do not use the above-mentioned trade marks. We also request that you select a different name for the remainder of this event and all of your future events that does not adopt In-N-Out’s name and logo.

51    Mr Kagan replied by email on 24 June 2016. He said they knew that “ANIMAL STYLE” and “PROTEIN STYLE” were “trademarked terms” and denied that they had ever been used for their menu items. He insisted that they were not trying to deceive customers or “rip-off” the In-N-Out brand. He advised that he and Mr Saliba intended to keep the name Down-N-Out, saying that they had legal advice that it did not infringe the In-N-Out “trade mark (sic)”. He asserted that:

This expression has its own separate and distinct meaning in the English language which is unlikely to conflict with the meaning of “In-N-Out”. Further, the word Down also relates to “Down Under” which relates to the fact that we are an Australian business.

52    On the other hand, Mr Kagan said that he understood the applicant’s concerns about the logo. He advised that, “as a temporary measure”, that is, until they could get new signs, they had covered up the arrows.

53    From then on a number of variations to the original logo started to appear.

54    A photograph of the DOWN-N-OUT sign on 24 June 2016, which Mr Saliba posted on his personal Facebook page, shows that the arrows had been obscured and that the word “censored” appears in upper case letters above and below the DOWN-N-OUT name where the arrow formerly appeared. In response to a query “What’s the deal with censored?”, Mr Kagan posted a photograph of part of Mr Sarigumba’s letter, advising that he had received the letter “the other day”. Mr Saliba replied that he was going to get the letter framed and put it on the wall at Down-N-Out.

55    On 29 June 2016 this variation of the original DNO logo appeared on the Down-N-Out Instagram page:

56    On 6 July 2016 two variations of the logo were posted on the Down-N-Out Facebook page:

57    On 6 and 7 July 2016 Mr Kagan (using the alias “Professor X”) advised Mr Paine of “some legal issues” and told him that “the main thing would be to change the sign and the arrow etc. but we might as well change the whole thing”. Mr Kagan informed Mr Paine that:

Need to differentiate ourselves ASAP before we get sued lol.

58    Mr Saliba (under the alias “Mr Seaman”) told Mr Paine that the yellow arrow “definitely needs to go”.

59    He then proposed a series of Down-N-Out logos using the same font and the same shade of red used in the In-N-Out device mark. In response to a question apparently from Mr Paine about the problem the applicant had with “the previous images”, Mr Kagan responded:

To put it as simply as possible – each element on its own isn’t infringing on anything. But everything together is enough to fool the stupider people in society into thinking that we ARE In-N-Out

Secret menu, menu ingredients, logo, name etc.

…

Hehe — all a bit of fun really. We are now Sydney’s most controversial burger restaurant.

60    Although Mr Kagan had told the applicant that he understood its concerns about the original Down-N-Out logo, on 7 July 2016 Mr Kagan sent Ms Tucker a group of photographs featuring the original logo accompanied by the following text:

The fukd thing is we can[’t] post most of them anymore because of the In N Out issues lol. You guys can though

61    On 13 July 2016, the hyphens were removed from the signs at the Sir John Young Hotel and photographs showing the signs without the hyphens were posted on Instagram and the DNO Facebook page.

62    By late August 2016, new signs were installed. They differed from the earlier signs in the following respects. They included neither arrows nor hyphens and the “O” in “DOWN” was replaced by a hashtag. The following images were taken from Facebook posts on 30 August and 4 September 2016 respectively:

63    Since the exchange of correspondence with Ms Sarigumba, the respondents’ business has grown significantly. The respondents admitted in their defence that between October and December 2016 Messrs Kagan and Saliba operated, on a pop-up basis, a restaurant in High Street, Penrith called “Down N’ Out West” and that since around January 2017 Mr Kagan has operated the burger restaurants at the Sir John Young Hotel (the “CBD restaurant”). The respondents also admitted in their defence that, in September 2017, a month before this proceeding was instituted, Hashtag Burgers opened a restaurant in Blaxland Road Ryde, operated by Mr Kagan. At some stage the CBD restaurant at the Sir John Young Hotel closed and reopened at another site in Liverpool Street. In April 2018 a Down N’ Out pop-up restaurant appeared in the Gold Coast during the Commonwealth Games. In May 2018 a restaurant opened in Keira Street, Wollongong. And on 14 February 2019 a restaurant was opened in Willoughby Road, Crows Nest.

64    Burgers and fries were sold at all of these restaurants and presumably continue to be sold. Orders could also be placed online through Foodora and Menulog.

65    The Down-N-Out restaurants, food and beverages are promoted on several online and social media accounts: a website with the domain name <downnout.com.au>; an Instagram page (https://www.instagram.com/downnout/) and five Facebook pages, four featuring the word “downnout” in the web address.

66    Annexure A to these reasons is a table showing the DNO marks and logos used at various times in relation to the restaurants and to the food and beverages offered for sale at those restaurants.

67    The applicant has not licensed or authorised the respondents to use any of them.

The trade mark infringement claim

In what circumstances is a registered trade mark infringed?

68    Section 120 of the Trade Marks Act 1995 (Cth) (“TM Act”) defines the circumstances which constitute an infringement of a registered trade mark. It relevantly provides that:

(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 or services in respect of which the trade mark is registered.

(2)    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:

(a)    goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or

(b)    services that are closely related to registered goods; or

(c)    services of the same description as that of services (registered services) in respect of which the trade mark is registered; or

(d)    goods that are closely related to registered services.

However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.

69    “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”: TM Act, s 17. “Sign” is broadly defined in s 6 to include “the following or any combination of the following”: “any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent”.

70    A sign is used as a trade mark if it is used as a badge of origin, to denote a connection in the course of trade between the goods or services in question and the person who applied the mark to those goods or services: see E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [43], citing Coca-Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107 (FC) at [19].

71    “[U]se of a trade mark in relation to goods” is “use of the trade mark upon, or in physical or other relation to, the goods” and “use of a trade mark in relation to services” is “use of the trade mark in physical or other relation to the services”: TM Act, ss 7(4) and (5). For the purposes of the Act, any aural representation of a trade mark is a use of the trade mark if the trade mark consists of, or any combination of, a letter, word, name or numeral: TM Act, s 7(2).

72    For the purposes of the Act, one trade mark is taken to be deceptively similar to another if it so nearly resembles that other mark that it is likely to deceive or cause confusion: TM Act, s 10.

73    The relevant principles were not in dispute.

74    First, in a case such as this, to deceive means to mislead into thinking that the applicant is the source of the goods or services carrying the mark of the respondent or respondents and confusion refers to a state of wonder as to whether that might be so: see All-Fect at [39]. But the likelihood of deception or confusion need not be confined to the source of the goods or services. It might arise, for example, from a mistaken belief that, or confusion as to whether, the alleged infringer is “in some way allied” with the owner of the registered trade mark: see, for example, Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 416–8 (Windeyer J).

75    Second, “likely” does not mean more probable than not or even probable. The threshold for confusion is not high: Australia Postal Corporation v Digital Post [2013] FCAFC 153; (2013) 308 ALR 1 at [70]. It is enough if the applicant proves that there is “a real risk” or “a real, tangible danger” that a number of persons will be caused to wonder or have a reasonable doubt about the matter: Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [50] (French J) citing Southern Cross Refrigeration Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594–5 (Kitto J); Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; (2004) 209 ALR 1; 61 IPR 212 at [76].

76    Third, the marks are not to be compared side by side. Rather, the comparison is between the impression made by the applicant’s registered marks based on the putative recollections of people of ordinary intelligence and memory and the impression they would have on seeing the respondents’ marks: Shell at 414–415 (Windeyer J): Australian Woollen Mills Limited v FS Walton & Co Ltd (1937) 58 CLR 641 at 658 (Dixon and McTiernan JJ). The basis of any mistaken belief or confusion is the impression or recollection carried away and retained: Australian Woollen Mills at 658. Consequently, allowance must be made for imperfect recollection (Crazy Ron’s at [77]) and fleeting or momentary confusion may be disregarded. In considering whether there is a likelihood of deception, what matters is not the reaction of the person whose knowledge of the two marks and the goods sold under them enables her or him to distinguish between them, but that of the person who lacks that knowledge: Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 362 (Mason J).

77    Fourth, although “[e]xceptional carelessness or stupidity may be disregarded”, potential purchasers of goods and services, particularly in the fast food industry, “are not to be credited with high perception or habitual caution”: Woolworths at [49].

78    Fifth, the TM Act is not merely concerned with the prospect of deception or confusion brought about by visual similarities. Where the mark is or by reason of its nature likely to be the subject of a verbal description by which consumers express their desire to acquire the goods or services, similarities of sound and meaning can be important: Australian Woollen Mills at 658.

79    Sixth, the marks must be compared in their entirety or, as Yates J put it in Optical 88 Ltd v Optical 88 (No 2) Pty Ltd [2010] FCA 1380; (2010) 275 ALR 526; 89 IPR 457 at [100], “as a whole” (Yates J). Furthermore, where a mark consists of a number of elements, the elements must be considered in their context. Context includes “the size, prominence and stylisation of words and device elements used in the mark and their relationship to each other”: Optical 88 at [100]. That said, where a word or words is an essential feature of a registered mark, the incorporation of that word or words in the mark or marks of a rival trader may cause confusion for consumers with an imperfect recollection of the registered mark: de Cordova v Vick Chemical Company (1951) 68 RPC 103 at 105–6; Crazy Ron’s at [79]. In de Cordova, for example, the Privy Council held that the use by the appellant of the trade name “Karsote Vapour Rub” with respect to an ointment infringed the respondents’ registered marks. The first of the registered marks consisted of the phrase “Vicks VapoRub Salve” and a triangle with the words “Vicks Chemical Company” printed on the sides along with other words underneath the triangle. The second registered mark was the word mark “VapoRub”. The Privy Council considered that the word “VapoRub” was an essential feature of the first mark and that the words “vapour rub” so closely resembled that word as to be likely to deceive. Lord Radcliffe, who delivered the judgment, observed at 105–6:

They have not used the mark itself on the goods that they have sold, but a mark is infringed by another trader if, even without using the whole of it upon or in connection with his goods, he uses one or more of its essential features. The identification of an essential feature depends partly on the court’s own judgment and partly on the burden of the evidence that is placed before it. A trade mark is undoubtedly a visual device; but it is well-established law that the ascertainment of an essential feature is not to be by ocular test alone. Since words can form part, or indeed the whole, of a mark, it is impossible to exclude consideration of the sound or significance of those words. Thus it has long been accepted that, if a word forming part of a mark has come in trade to be used to identify the goods of the owner of the mark, it is an infringement of the mark itself to use that word as the mark or part of the mark of another trader, for confusion is likely to result ... The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him, for orders are not placed, or are often not placed, under such conditions. It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.

80    Seventh, all the surrounding circumstances must be taken into account, including the circumstances in which the marks have been or will be used, the goods or services to which the marks have been or will be applied, and the nature and kind of customer likely to acquire them: Cooper Engineering Company Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 at 538 (Dixon, Williams and Kitto JJ); Southern Cross at 594; Woolworths at [50]. This last circumstance brings into consideration whether the purchaser is likely to be discerning, in a hurry to buy, or attentive to detail. The relevant circumstances also include how the goods and/or services will be sold and promoted: Anheuser-Busch Inc v Budějovický Budvar [2002] FCA 390; (2002) 56 IPR 182 (“Budweiser”) at [237] (Allsop J). In contradistinction to an action for passing-off or for misleading or deceptive conduct contrary to the ACL, however, questions of dissimilarity by reason of get-up or aspects of packaging are irrelevant: Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmBH [2001] FCA 1874; (2011) 190 ALR 185; 54 IPR 344 (“Aldi v Frito-Lay”) at [155] (Lindgren J). The user of a deceptive or confusing mark cannot escape a finding of infringement by pointing to something outside the mark itself to show that it has distinguished its goods from those of the registered owner: Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147 at 16 (Greene MR).

81    Eighth, the question of deceptive similarity must be considered against the “background of the usages in the particular trade”: Shell at 401; Woolworths at [50].

82    Ninth, the question “depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs”; accordingly, it is “a question never susceptible of much discussion”: Australian Woollen Mills at 659 (Dixon and McTiernan JJ).

83    Tenth, with the possible exception of a notorious or ubiquitous mark of long-standing, any reputation which may exist in relation to the registered marks is irrelevant: CA Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539; (2000) 52 IPR 42 at [45]–[52] (FC); Optical 88 at [96]. The same test of deceptive similarity applies to newly registered, previously unknown, and well-known marks: Optical 88 at [96]. In the present case, neither side contended that the applicant’s registered marks were notorious or ubiquitous so as to fall within the exception.

84    Eleventh, it is not necessary to prove that the alleged infringer intended to deceive or cause confusion. Section 10 is not concerned with the purpose or object of the alleged infringer but with the effect of the impugned mark or marks on prospective purchasers: All-Fect at [39]. That said, for the reasons discussed below, evidence of intention is certainly not irrelevant.

The nature and extent of the dispute

85    The applicant claims that the use of each of the names and trade marks DOWN-N-OUT, DOWN N’ OUT, and DOWN N OUT, the domain name “downnout”, and the DOWN N’ OUT logos infringes its registered marks.

86    There is no dispute that the respondents used the signs in question as trade marks in relation to goods and services in respect of which the INO marks were registered. Although the applicant pleaded that they were substantially identical or deceptively similar, it did not press the allegation that they were substantially identical. The issue is whether any of the respondents’ impugned trade marks are deceptively similar to the applicants’ registered trade marks.

Are any of the respondents’ impugned trade marks deceptively similar to the applicants’ registered trade marks?

87    It was common ground that “In-N-Out” is the essential feature of all the INO marks. The evidence showed that the applicant’s restaurants are commonly referred to by that name. Since each of the INO marks either consists of, or includes as its essential feature, the name “In-N-Out”, it was common ground that, if the name Down-N-Out, in whatever form it appears or has appeared in the various DNO marks, is deceptively similar to the name In-N-Out, then the applicant succeeds in its claim with respect to all the DNO marks. That was so, despite the fact that all the applicant’s registered marks included the word “burger” and none of the respondents’ marks did. No doubt that was because “burger” is a “mere descriptive element” and is not apt to distinguish the relevant goods or services from those offered by other traders: Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2007) 251 FCR 379 at [52].

88    Although the hyphens were removed after they received Ms Sarigumba’s cease and desist letter and an apostrophe inserted after the N, the respondents did not argue that these changes were of any moment. Nor could they reasonably do so. Any such argument would have been untenable. The changes did not affect the sound of the marks or materially alter their appearance. Indeed, as altered, they are substantially identical in appearance to the original DOWN-N-OUT word mark. It is highly unlikely that a person with an imperfect recollection of the applicant’s marks would recall that the applicant’s signs used hyphens or that the apostrophe after the “N” incorporated by the respondents in their signs was missing from the applicant’s. As the applicant put it, the changes effected distinctions without a difference. The respondents submitted that the substitution of the hashtag for the O in DOWN provided “a material point of distinction” from the registered marks and a connection with the first respondent, Hashtag Burgers. I cannot accept the submission and in closing argument the respondents’ counsel all but conceded the point. Speaking only of the question of visual similarity, he said:

And so it – the question, and the difficult – the difficulty that it poses for your Honour is whether or not your Honour could find, for example, that “Down” with an O is deceptively similar but “Down” with a hashtag is not. I must say, I struggle to see that that would – that your Honour could fall into that – right onto that juncture in full candour.

89    The natural way to pronounce D#WN N’ OUT is “down n’ out”. Indeed, the unchallenged evidence is that, after the hashtag was substituted for the O, Mr Pereira’s telephone call to D#wn N’ Out Top Ryde in July 2018 was answered with the words “Down N Out Ryde …”. If there is a real danger that the use of DOWN-N-OUT to refer to the respondents’ goods and/or services would cause confusion, then it is unarguable that D#WN N’ OUT would, too.

90    The respondents contended that the DNO word marks are not deceptively similar to the applicants’ registered marks for a number of reasons.

91    First, they submitted that they do not convey the same idea or impression. They argued that the impression conveyed by the phrase “down n’ out” is “one of pitiable hardship”. They pointed to the dictionary definitions of “down-and-out” as “a person, usually of disreputable appearance, without friends, money, or prospects” (Macquarie Dictionary online) and “a person completely without resources or means of livelihood, a vagrant a tramp” (Shorter English Oxford Dictionary). They argued that this idea is reinforced by other aspects of the branding of the DNO restaurants. As I observed above, however, such matters cannot be taken into account for the purposes of the infringement claim.

92    The respondents submitted that the idea or impression conveyed by the registered marks is very different. “In and out”, they said, connotes rapid inward and outward movement (Oxford English Dictionary online) or participating in a particular job or investment etc. for a short time and then getting out (Collins Dictionary). They argued that this idea is reinforced by the nature of the goods and services to which the registered marks are to be applied (fast-food restaurants) as well as the arrow in the registered composite mark.

93    Second, the respondents submitted that the marks incorporate important visual differences. They argued that the presence of the word “DOWN” is a sharp point of distinction: “Down” looks nothing like “In”. They noted that the arrow in the registered composite mark is missing from the DNO word marks. They contended that the use of the hashtag since at least 30 August 2016 is also a significant point of distinction. Not only is it missing from the applicant’s mark, they contended that it “requires the viewer to pause and interpret” the sign. Moreover, they submitted, it provides a connection with Hashtag Burgers.

94    Nor, the respondents submitted, do the respective marks sound alike. The respondents argued that, it was well-established that in conducting the necessary comparison, “due weight and significance” should attach to the first part of the mark.

95    Third, the respondents submitted that the essential features of the competing marks are different. They argued that the essential feature of the IN-N-OUT BURGER word mark is the phrase “In N Out”, not the “N-Out” or the use of hyphens.

96    Fourth, the respondents observed that no witnesses were called to give evidence that they were confused as a result of the use of the marks in relation to the respondents’ goods and services, although the DNO marks have been used throughout metropolitan Sydney for approximately three years.

97    For the same reasons, the respondents submitted that the DNO domain name was not deceptively similar to any of the applicant’s registered marks.

98    The respondents made the same points about their logos, arguing that the essential and dominant feature of each of them was the phrase “DOWN N OUT” or ‘D#WN N OUT”. They also submitted that the current DNO logo bears no resemblance to the registered IN-N-OUT logo because “it consists of different words and adopts a fundamentally different font, colour scheme and stylisation”.

99    Two questions arise for consideration. First, is there a resemblance between the competing marks? Second, if so, is the resemblance so close as to be likely to cause confusion, if not deception?

100    The respondents’ submissions as to the allegedly material visual differences between the respective marks would be powerful if the applicant were pressing its original claim that the marks were substantially identical. They are much less persuasive, however, with respect to the applicant’s claim that the respective marks are deceptively similar. There is no doubt that on a side by side comparison there are several points of distinction. But that is immaterial. Here, what counts is the impression the impugned mark would have on consumers of ordinary intelligence with an imperfect recollection of the registered marks.

101    There is undoubtedly a visual resemblance between the competing word marks. For a start, they all finish with “N” followed by “OUT”. In addition, they all appear in sans serif fonts. The later adoption of a different colour scheme is immaterial since the applicant’s marks are registered without limitations as to colour and therefore are taken to be registered for all colours: TM Act, s 70. The respondents conceded that “N-Out” is an important component of the IN-N-OUT marks and that IN-N-OUT would be nothing without the “N-Out”. The respondents also conceded that the fact that it appears in the applicant’s marks provides some visual similarity between the competing marks. For the same reason there is also some aural similarity.

102    I referred earlier to the respondents’ submission that weight and significance is to be given to the first syllable of a mark. This submission was supported by the following four authorities.

103    In Re London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264 at 279 Sargant LJ observed that English speakers tend to slur the endings of words so that the first part of a word is accentuated. His Lordship concluded that, as a rule, the first syllable of any word is by “far the most important for the purpose of distinction”.

104    In Johnson & Johnson v Kalnin (1993) 114 ALR 215; (1993) 26 IPR 43, which concerned the marks “band-aid” and “band>>it”, Gummow J noted at 221 that the marks consisted of “the same first, and dominant, primary syllable”. His Honour acknowledged that the second syllable was not identical, but he said that the evidence suggested that “in Australian spoken English the final consonant tends not to be precisely articulated”.

105    In Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 at 511, which concerned the marks VOGUE and EUROVOGUE, Burchett J referred with apparent approval to the remarks in Re London Lubricants and Johnson & Johnson v Kalnin. His Honour observed, however, that at times “a degree of dissonance between marks in sound and (speaking figuratively) in appearance may be balanced by an identity or close similarity in what has been called the idea of the mark”.

106    The final reference was to Aldi v Frito-Lay where, at [160], Lindgren J cited Conde Nast.

107    English speakers might well emphasise the first syllable of a word in ordinary conversation. But this is not universally so. As the learned authors of Shanahan’s Australian Law of Trade Marks & Passing Off (Thomson Reuters, 6th ed, 2016) point out at [30.1550], there will be cases where the emphasis is placed on another syllable or where the latter part of the word is the more unusual and distinctive. Several examples are cited there, including Upjohn Co v Schering AG (1994) 29 IPR 434 in which the suffix “velle” was found to be the essential element of the trade mark PROVELLE, and PROVELLE and NUVELLE were consequently considered to be deceptively similar. In that case, the delegate of the Registrar of Trade Marks was impressed by the similarity in the structure of the two words, found that they were built on a distinctive element (the same suffix) and that it was likely that buyers would assume a common origin. Further, despite the dissimilarity of the first syllables of COLGATE and TRINGATE, in Colgate-Palmolive Ltd v Pattron [1978] RPC 635 the Privy Council was persuaded that TRINGATE when used in connection with toothpaste was deceptively similar to the COLGATE mark. In Vivo International Corporation Pty Ltd v TiVo Inc [2012] FCAFC 159; (2012) 294 ALR 661; 99 IPR 1 the Full Court upheld the finding of the primary judge (Dodds-Streeton J) that VIVO was deceptively similar to the TIVO mark when used in relation to similar or closely related goods or services, amongst other things, because of “the very considerable aural similarity between the marks”, notwithstanding that her Honour accepted that the words were pronounced differently. In Berlei Hestia the High Court considered that the marks BALI- BRA and BERLEI were deceptively similar solely because of their phonetic similarity.

108    In any case, the “in” in IN-N-OUT BURGER is not a syllable, it is part of a phrase or expression. It is unlikely to attract any greater emphasis than “out”.

109    In my view, N-OUT is a distinctive and significant feature and an essential ingredient of all of the INO marks, just as “& GLORY” was an essential or distinguishing feature of the mark SOAP & GLORY in Soap & Glory Ltd v Boi Trading Co Ltd (2014) 107 IPR 574 at [33].

110    I accept that “down and out” and “in and out” can have different meanings. But meanings can change according to context. I also accept that, when spoken and when the present context is ignored, “Down-N-Out”, “Down N Out”, and “D#wn N Out” convey the same impression or idea as “down and out”. Focussing on the idea or impression created by the DNO marks, however, is apt to distract attention from the real question, namely, whether people with imperfect recollections of the applicants’ marks might be confused or deceived when coming across the respondents’ marks. What matters is the idea or impression carried away from seeing or hearing the applicant’s (registered) marks having regard to the surrounding circumstances. The idea or impression created by the registered marks is of fast-food, particularly burgers, and fast service. The respondents’ marks are being used with respect to the same kind of goods and services. The sort of deconstruction, if not reconstruction, in which the respondents engaged, albeit understandably, is an exercise the ordinary consumer is unlikely to undertake. A person seeing or hearing the registered marks might not be particularly struck by the “In”. After all, “in”, “out”, and “down” are all directional terms. As the applicant submitted, in the context in which they are used, at least some people may well understand DOWN-N-OUT (with or without the hyphens) to convey a similar idea to IN-N-OUT since “down” does not only mean “from higher to lower” but also means “into ... a lower position ...” (Macquarie Dictionary (4th ed, 2005)), as in “down the stairs and into the bar”, consistent with the location of the first DOWN-N-OUT pop up.

111    Although, when compared side by side, there are obvious differences in the design of the arrow in each of the respondents’ logo marks, the fact that they feature an arrow, a prominent feature of the applicant’s device marks, is an additional point of similarity. As the applicant submitted, it reinforces “the common directional idea”. Indeed, the respondents submitted, in effect, that the purpose of the arrows used in the respondents’ logos was to indicate the direction into a restaurant. It is likely that at least some people with an imperfect recollection of the INO marks would not be able to identify the differences in the arrows used by the respective businesses.

112    Does this mean that there is a real risk that a number of persons might be caused to wonder whether the applicant is the source of the respondents’ DNO goods and/or services or whether the respondents are in some way allied to, or associated with, the applicant?

113    In order to answer this question it is first necessary to examine two pieces of evidence.

114    The first is the evidence upon which the applicant relied to establish actual confusion, if not deception. That evidence was conveniently collected in a table annexed to the applicant’s closing submissions and reproduced below. Although the table was said to contain examples only, no other examples were drawn to my attention. If there were more, it is reasonable to assume that these were the best of them. Despite the heading given to this annexure, the first post appears to be taken from the Tablou Instagram account and not from a social media account operated by any of the respondents.

Annexure G – Schedule of examples on Down N' Out’s Social Media Pages that associate or confuse Down N' Out with In-N-Out

115    Evidence of actual confusion can be very persuasive. But it is always necessary to evaluate the quality of the evidence “by reference to its internal features”, together with the other evidence and the court’s own knowledge of human affairs: Vivo at [137] (Nicholas J). In the absence of evidence of context and without being able to identify the people who posted the remarks, it is difficult to put a great deal of weight on any of this evidence. None of the authors of the posts gave evidence. It is impossible to know what factors they took into account. While all but the last of these posts suggest some confusion, it is conceivable, I suppose, as the respondents submitted, that this was the work of people “just joking around on social media”. In any case, even if they are genuine instances of confusion, when regard is had to the total number of comments across the respondents’ social media platforms and the period during which the DNO marks have been in use, they are few and far between.

116    Be that as it may, in order to establish the likelihood of deception or confusion, it is not necessary to adduce evidence that anyone was in fact deceived or confused. The test is an objective one. As Lord Devlin observed in Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265 at 291 in a passage cited with approval by the Privy Council in Colgate-Palmolive at 665:

[W]hat the judge has to decide in a passing off case is whether the public at large is likely to be deceived. What would the effect of the representation be upon the reasonable prospective purchaser? Instances of actual deception may be useful as examples, and evidence of persons experienced in the ways of purchasers of a particular class of goods will assist the judge. But his (sic) decision does not depend solely or even primarily on the evaluation of such evidence. The court must in the end trust to its own perception into the mind of the reasonable man …

117    Colgate-Palmolive was both a passing-off and a trade mark infringement case, but these remarks were not cited only in connection with the passing-off suit. In Colgate-Palmolive no evidence of confusion was admitted at the trial, yet neither the Court of Appeal nor the Privy Council had any difficulty in concluding that the mark TRINGATE used in connection with a brand of toothpaste was deceptively similar to COLGATE.

118    Moreover, the evidence of the social media posts does have some probative value. On the face of things it raises the possibility that some people did wonder about the relationship between IN-N-OUT BURGER and DOWN-N-OUT, including after the arrows and hyphens were removed and the hashtag inserted. Importantly, neither Mr Kagan nor Mr Saliba saw fit to answer the questions raised by the posts or dispel the possibility of confusion, let alone take steps to remove them. It is reasonable to infer that they were happy to leave the question hanging.

119    That brings me to the second piece of evidence: the evidence of the respondents’ intentions.

120    Apart from the likelihood of deception or confusion, the only real factual dispute concerned the respondents’ intentions. As I said earlier, although the owner of a registered trade mark is not obliged to prove intention in order to establish a case of infringement, the alleged infringer’s intentions are not irrelevant. An inference may be drawn from evidence disclosing an intention to deceive or confuse, that deception or confusion is likely to occur. As Dixon and McTiernan JJ explained in Australian Woollen Mills at 657:

The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive.

121    The rule is not restricted to cases of “deliberate” dishonesty; it is enough that the allegedly infringing trader borrows aspects of the other trader’s mark: Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd (2018) 264 FCR 422 (FC) at [97] (per curiam).

122    An imitation of another person’s product, however, does not necessarily signify an intention to deceive consumers: Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at [33]. Furthermore, as Burley J observed in Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd [2017] FCA 403; (2017) 349 ALR 598; 126 IPR 498 at [34], in a passage cited with approval by the Full Court on the appeal (Homart at [14]), albeit in the context of a misleading or deceptive conduct claim, “the role of intention should not be overstated”. It all depends on the circumstances. In some circumstances, proof of an intention to mislead may readily lead to an inference of the likelihood of deception, in others it may lead nowhere, the intention may simply miscarry: Windsor Smith Pty Ltd v Dr Martens Australia Pty Ltd [2000] FCA 756; (2000) 49 IPR 286 at [33] (Sundberg, Emmett and Hely JJ).

123    The applicant submitted that the inescapable inference is that the Down-N-Out name and logos were deliberately chosen in order to obtain the benefit of market recognition of the In-N-Out name, trade marks, and branding. The respondents’ position was that they were merely inspired by the applicant, indeed their counsel submitted that it was “plain as a pikestaff that [they] were inspired by In-N-Out”.

124    The evidence establishes that it was no coincidence that Messrs Kagan and Saliba settled on the name DOWN-N-OUT. The respondents’ own media release referred to the adoption of the name as “cheeky”, thereby owning up to their impudence. In closing argument, the respondents accepted that the “N-Out” was taken from the applicant’s trade name IN-N-OUT BURGER. They adopted the DOWN-N-OUT name, not to paint a picture of a person down on his luck, but to remind consumers of IN-N-OUT BURGER. On the face of the evidence, Messrs Kagan and Saliba chose the name DOWN-N-OUT because of its resemblance to IN-N-OUT. Why would they do that unless they believed that they would derive a commercial benefit from doing so?

125    In their June 2015 Facebook promotion for the “Funk N Burgers” pop-up, Messrs Kagan and Saliba described the IN-N-OUT burger as “legendary”. Mr Kagan attended the applicant’s pop-up event in January 2016, observed the length of the queue, and noted that the burgers sold out “before even opening”. Mr Saliba was in possession of a colour copy of the registered In-N-Out logo. So, too, was Mr Paine because Mr Saliba had sent it to him, asking him to make “a funk n burgers sign like in n out burger”. It was soon after this that Messrs Kagan and Saliba adopted the name DOWN-N-OUT for their new pop-up and created and adopted logos combining DOWN-N-OUT with a bent yellow arrow, knowing that the applicant’s registered logo mark used a bent yellow arrow, too.

126    Messrs Kagan and Saliba issued a media release which featured IN-N-OUT, not DOWN-N-OUT, in the title. The media release also referred to a “simple” menu “similar to the original”, together with “secret menu hacks” such as In-N’Out’s “Animal Style” and “Protein Style”. The media release made no reference to what the respondents submitted was the idea or impression given by the name DOWN-N-OUT as something disreputable or pitiable. Further, as the applicant submitted, if this were the message they were intending to convey, why choose DOWN-N-OUT rather than “down and out”?

127    Mr Kagan and/or Mr Saliba endorsed Ms Tucker’s Instagram post in which she declared that she was teaming up with Messrs Kagan and Saliba to “bring In-N-Out down under”.

128    When the first DOWN-N-OUT pop-up opened, “it broadly adopted the theme and style of an IN-N-OUT pop-up”, as the applicant put it, in that it was held inside a bar, offering a simple menu with three burgers and a “secret menu”. The so-called secret menu featured items the names of which, to the knowledge of Mr Kagan and Mr Saliba, were registered trade marks of the applicant. The use by Messrs Kagan and Saliba of these names, together with the reference to the “secret menu” when the applicant’s “secret menu” also offered burgers in ”Animal Style” and “Protein Style”, is likely to have fostered confusion. Having regard to the history and in the absence of evidence to the contrary, it is reasonable to infer that in all probability that was their intention.

129    There is no evidence that Messrs Kagan and Saliba took any steps to dispel the possibility of confusion before they were served with the applicant’s cease and desist letter. They did not reply to the queries or comments posted on their Facebook and Instagram pages. They did not remove the posts. Moreover, their endorsement of the Tablou post (that they were bringing In-N-Out down under), indicates that they were actively encouraging it.

130    The first promotional use of the name DOWN-N-OUT was to advertise the Funk N Burgers event on Facebook on 28 June 2015. That referenced IN-N-OUT BURGER. Unlike the Funk N Burgers event, however, the DOWN-N-OUT pop-up and its successors were not promoted as “tributes” to IN-N-OUT BURGER. The use of “N-OUT”, the choice of font, and the selection of the particular shade of red for the DOWN-N-OUT name were plainly designed to reflect the applicant’s branding. So, too, was the use of the yellow arrow, as Mr Kagan all but conceded in his reply to the applicant’s cease and desist letter. It will be recalled that the colour and particular shade of yellow were chosen by Mr Paine to match the applicant’s branding, a decision approved by Mr Kagan and, by inference Mr Saliba, too. As I have already mentioned, the respondents accepted during closing argument that the “-N-Out” in DOWN-N-OUT was taken from the trade name IN-N-OUT, the essential feature of all the INO marks.

131    Without explanation, neither Mr Kagan nor Mr Saliba gave evidence, although they were both present in the courtroom during the trial. Any inference favourable to the applicant for which there is a foundation in the evidence can more confidently be drawn when a person presumably able to put the true complexion on the facts relied on for the inference has not been called by the respondent and no sufficient explanation is given for his absence: Jones v Dunkel (1959) 101 CLR 298 at 308 (Kitto J); see also at 312 (Menzies J), 320–321 (Windeyer J). Where, as here, the only persons who could give direct evidence on the question of the respondents’ intentions “preferred the well of the court to the witness box”, the Court is entitled to be bold: The Insurance Commissioner v Joyce (1948) 77 CLR 39 at 49 (Rich J); also SS Pharmaceutical Co Ltd v Qantas Airways Ltd [1991] 1 Lloyds Rep 288 at 293 (Gleeson CJ and Handley JA).

132    The respondents submitted that the applicant’s evidence did not rise high enough to enable such an inference to be drawn or to warrant an explanation from the respondents. I disagree. The inference is open from the evidence tendered by the applicant that the respondents adopted aspects of the applicant’s registered marks in order to capitalise on its reputation. In the absence of evidence to the contrary, that is the inference that should be drawn. If this were not their intention, why choose DOWN-N-OUT? Why not stick with FUNK‑N‑BURGERS? In these circumstances, the choice of DOWN-N-OUT should be presumed to be fitted for the purpose and therefore likely to confuse, if not deceive, consumers.

133    It is true that the media release made it clear that down-n-out was an innovation of Hashtag Burgers, which I infer was at this point a business name used by Mr Kagan and Mr Saliba, and described the DOWN-N-OUT pop-up as “Sydney’s answer to In-N-Out burgers”. On balance, however, in the absence of evidence from Mr Kagan and Mr Saliba, the representations in the media release are not sufficient to dispel the inference or rebut the presumption that they intended at least to cause confusion. The similarities in the menus offered by the parties and their stated intention to use “Animal Style” and “Protein Style”, although they admittedly knew they were the applicants’ trade marks, support that conclusion.

134    Of course, the seriousness of the allegation made by the applicant necessarily affects the answer to the question of whether the issue has been proved to the requisite standard: Evidence Act 1995 (Cth), s 140(2); see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362. But for two pieces of evidence, I would not have been disposed to conclude that Messrs Kagan and Saliba were being dishonest in their decision to appropriate aspects of the applicant’s marks. Over-exuberant, perhaps foolhardy, might have been more accurate.

135    The first piece of evidence is the emphatic denial by Mr Kagan in his reply to the letter of demand that they had ever used the terms “Animal Style” and “Protein Style” for their menu items. The denial is inconsistent with both the statements made to Mr Khatri and the unequivocal representation made in the respondents’ media release that:

Of course there will be shakes and a plethora of secret menu hacks such as Animal Style and Protein Style.

136    In the absence of any evidence from Mr Kagan or Mr Saliba explaining the inconsistency, I have come to the conclusion that Mr Kagan’s denial was not only false but knowingly false. This false representation lends weight to the inference that that the respondents adopted the name “Down-N-Out” for their burger business, and for some time also used a yellow arrow in their logo, for the purpose of appropriating part of the applicant’s reputation and, potentially, its trade.

137    I therefore find that the respondents sought to attract potential customers by having them wonder whether DOWN-N-OUT was, indeed, IN-N-OUT BURGER, perhaps a down-market or down-under version, or, at least, that the two were connected or allied in some way. That was what was cheeky about its choice of name.

138    This question was defined in the agreed statement of issues as “which, if any, of the respondents’ trade marks/logos were adopted for the deliberate purpose of appropriating the trade marks/branding or reputation of the applicant”. Since all the respondents’ marks and the domain name included the phrase “Down N Out”, and it was not just the arrow but also the name that was adopted for this purpose, the answer must be all of them. As the applicant submitted, the incremental changes made by the respondents were not changes of substance. They do not affect in any way the sound of the name and it was the name that built the link between IN-N-OUT BURGER and DOWN-N-OUT.

139    The second piece of evidence is about the respondents’ lack of compliance with their discovery obligations.

140    An order was made by consent on 29 March 2019 for the respondents to give verified discovery by 10 April 2019. The order required verified discovery of documents evidencing or recording:

(a)    The creation, selection or adoption of, or the reason(s) why the Respondents created, selected or adopted, any of the Down-N-Out names and logos.

(b)    Any knowledge of one or more of the Respondents prior to 17 June 2016, or any investigation or research conducted by or on behalf of one or more of the Respondents prior to 17 June 2016 (including all investigation and research results, and any information received by the Respondents) in respect of In-N-Out, In-N-Out's pop ups, restaurants, menu, branding or logos.

(c)    Any instructions, briefs, plans or proposals that concern the design or adoption of the name, logos, branding, fit out, menu, concept or aesthetic of any of the Down-N-Out pop ups or restaurants and reference In-N-Out, In-N-Out’s pop ups, restaurants, menu, branding or logos in any way.

(d)    Any communications prior to the commencement of the proceedings, by or on behalf of any of the Respondents, with media publishers, journalists, bloggers, promoters, or customers regarding any of the Down-N-Out pop ups or restaurants or In-N-Out in any way.

141    A verified list of documents was emailed to the applicant’s solicitors on 24 April 2019, two weeks after the expiry of the time fixed by the order. The documents appearing in the list were emailed to the applicant’s solicitors on 29 April 2019.

142    On 15 May 2019 Baker McKenzie wrote to Yates Beaggi Lawyers expressing concern about the paucity of documents that were produced and requested that the respondents provide a description of the steps taken to conduct “a good faith proportionate search to locate discoverable documents, including details of what records were searched, any search criteria or terms which were used, and what databases were searched”. Ms Gleeson replied by email on 22 May 2019 that:

We are instructed that our clients searched all Facebook messages, emails and SMS messages between Ben Kagan and Andrew Saliba, and graphic designers, interior designers and media contacts for any mention of ln-N-Out or any reference to the design and branding process and development, in order to locate the discoverable documents.

Our clients also looked through all Facebook, emails and SMS messages and emails in the months leading up to the Sir John Young pop-up restaurant, to locate the discoverable documents.

143    If the instructions given to Yates Beaggi Lawyers were as Ms Gleeson represented, and there is no reason to think they were not, then Ms Gleeson was either misled or the search conducted by Messrs Kagan and Saliba was manifestly inadequate.

144    On 5 June 2016 a subpoena was issued at Baker McKenzie’s behest to Olivia Tucker, trading as Tablou. The subpoena sought the production of documents that should have been discovered and which would have been discovered if the representation by Ms Gleeson were correct. They were documents created during 2016 that evidence or record any instructions given to one of the respondents’ graphic designers concerning the design of any Down-N-Out names and logos or any Down-N-Out pop-up restaurant; any concepts, plans, or proposals she created in response to those instructions; and the creation, selection or adoption of the Down-N-Out names and logos.

145    The following day Baker McKenzie wrote again to Yates Beaggi Lawyers. They stated that the applicant had serious concerns about “the adequacy and completeness” of the discovery. They pointed out that the discovery appeared to be limited to communications rather than documents and, notwithstanding what they apparently told their lawyers, that the respondents had apparently failed to search and discover documents that might have been created and stored on other platforms, such as Instagram, WhatsApp, and, apart from Facebook messages, Facebook. They listed a number of documents which appeared on the Instagram and Facebook accounts of Mr Kagan and Mr Saliba, which had not been discovered, and sought an explanation as to why they were not discovered. They also attached images of the documents. Those documents were:

(a)    an image appearing on Mr Kagan's Instagram account (@hashtag_hustler) dated 20 January 2016, showing a queue at our client's pop up restaurant at Dead Ringer in Sydney on 20 January 2016. The Instagram post by Mr Kagan tags our client's lnstagram account, by its handle @innout (lnstagram Post).

(b)    an image and Face book post dated 5 January 2017 from Mr Saliba's Facebook page showing food from an In-N-Out restaurant and the hashtags “#overrated” and “dno41yf” (January 2017 Facebook Post); and

(c)    a Facebook post dated 11 November 20I7 from Mr Saliba's Facebook page with a photo in which Mr Kagan is wearing one of our client's IN-N-OUT T-Shirts (November 2017 Facebook Post).

146    Baker McKenzie also noted that the respondents had not discovered any documents relating to the creation of the Down-N-Out name and logo in the form in which it was first used at the Sir John Young Hotel. They pointed out that documents produced by Ms Tucker on subpoena indicate that on 13 May 2016 Mr Kagan possessed documents evidencing or recording the Down-N-Out name and logo. They requested that Yates Beaggi Lawyers conduct a thorough investigation and asked for confirmation of certain matters. They foreshadowed, amongst other things requiring the respondents to attend court to be cross-examined on the issue of whether or not they complied with their discovery obligations.

147    Ms Gleeson sent back a fiery response on 12 June 2019, repudiating Baker McKenzie’s various contentions. A supplementary list of documents was sent at the same time. Only one document was on that list. It appears to be the first of the three documents mentioned in the Baker McKenzie letter.

148    Ms Gleeson’s apparent indignation was unjustifiable.

149    On 26 June 2019, just five days before the hearing was due to start, the respondents filed a second supplementary list and produced a further document. That document contained Facebook messages between Messrs Kagan, Saliba, and Paine. Included in the document were messages relating to the Funk-N-Burgers pop-up event in 2015. In one of them Mr Saliba asked for “a funk n burgers sign like in n out burger” and sent Mr Paine an image of the in-n-out device mark with the registration symbol ® clearly visible. The same day a subpoena was issued to Mr Paine requiring him to produce the same classes of documents that were sought in the subpoena to Ms Tucker.

150    At the hearing the applicants tendered a number of documents which should have been, but were not, discovered on 24 April 2019. They were either discovered in response to the letters of complaint from Baker McKenzie or produced to the Court on subpoena by third parties. Those documents and their sources are listed below:

(1)    the Facebook messages between Mr Kagan, Mr Saliba, and Mr Paine dated 10–17 June 2015 (additional discovery provided on 26 June 2019);

(2)    a print out of a Facebook Event entitled “FUNK N BURGERS VOL. 2 @ THE LORD GLADSTONE (FREE ENTRY)” dated 28 June 2015 (additional discovery provided 22 May 2019);

(3)    a print Out of a Facebook Event entitled “FUNK-N‑BURGERS: DOWN‑N‑OUT (IN‑N-OUT TRIBUTE) ~FREE PARTY~” dated 31 January 2016 (additional discovery provided 22 May 2019);

(4)    a message thread between Mr Kagan and Mr Paine dated 5 May 2016 (subpoena to Mr Paine);

(5)    SMS from Mr Kagan to Ms Tucker of Tablou Collective sending DOWN-N-OUT logo dated 13 May 2016 (subpoena to Ms Tucker);

(6)    a colour version of the Tablou Collective Down-N-Out Proposal 2016 dated 17 May 2016 (subpoena to Ms Tucker);

(7)    a message thread between Mr Kagan and Mr Paine dated 17 May 2016 (subpoena to Mr Paine);

(8)    a message thread between Mr Kagan, Mr Saliba and Mr Paine dated 25 May 2016 (subpoena to Mr Paine);

(9)    SMS from Mr Saliba to Ms Tucker dated 22 June 2016 (subpoena to Ms Tucker);

(10)    Facebook messages between Ms Tucker and Mr Saliba dated 24 June 2016 (subpoena to Ms Tucker);

(11)    Facebook messages between Ms Tucker and Mr Kagan dated 24 June 2016, 29 June 2016 and 7 July 2016 (subpoena to Ms Tucker);

(12)    A message thread between Kagan and Mr Paine dated 6 July 2016, to which Mr Saliba was contributed (subpoena to Mr Paine);

(13)    8 x Photographs of the CBD Restaurant — file created dates 8 June 2016 and 12 August 2016 (subpoena to Ms Tucker); and

(14)    Facebook messages between Ms Tucker and Mr Saliba dated 13 August 2016 (subpoena to Ms Tucker).

151    Given the nature and quantity of this material, in the absence of evidence from Messrs Kagan and Saliba it is difficult to avoid the conclusion that the respondents felt that they had something to hide by not discovering these documents in accordance with the original court order. I do not think it is insignificant, for example, that these documents included the disingenuous response to Mr Paine’s inquiry about the applicant’s problem with the DNO’s “previous images” in which Mr Kagan had replied that “the stupider people in society” could be fooled by the combination of “secret menu, menu ingredients, logo, name etc.” into thinking that they “ARE In-N-Out”. It will also be recalled that he appeared to treat the matter as “a bit of fun”.

152    The only remaining question is whether the respondents achieved what they set out to do. In my opinion, they did. They sailed too close to the wind.

153    There is a sufficiently close resemblance between the two names to give rise to a real, tangible danger of confusion. Careful analysis is not the measure of the response of the ordinary consumer with an imperfect recollection. As Luxmore LJ observed in dissent in Rysta Limited’s Application (1943) 60 RPC 87 at 108–9, speaking of a case of aural similarity, in a passage adopted by Viscount Maugham with whom Lords Thankerton and Wright agreed in the House of Lords in Aristoc Ltd v Rysta [1945] AC 68 at 86:

The answer to the question whether the sound of one word resembles too nearly the sound of another so as to bring the former within the limits of s. 12 of the Trade Marks Act, 1938, must nearly always depend on first impression, for obviously a person who is familiar with both words will neither be deceived nor confused. It is the person who only knows the one word, and has perhaps an imperfect recollection of it, who is likely to be deceived or confused. Little assistance, therefore, is to be obtained from a meticulous comparison of the two words, letter by letter and syllable by syllable, pronounced with the clarity to be expected from a teacher of elocution. The court must be careful to make allowance for imperfect recollection and the effect of careless pronunciation and speech on the part not only of the person seeking to buy under the trade description, but also of the shop assistant ministering to that person's wants.

I interpolate that s 12 of the Trade Marks Act 1938 (UK) relevantly prohibited the registration of a trade mark in respect of goods or description of goods that so nearly resembled a registered trade mark belonging to a different proprietor as to be likely to deceive or cause confusion.

154    Having regard to the ordinary meanings of the word “down”, when used in relation to the sale of fast food, the sign DOWN-N-OUT might suggest to some potential customers that if they come down to, or into, the restaurant or bar they will be served quickly and, should they wish to take their purchases away, they will be able to leave quickly, the very notion suggested by IN-N-OUT. Further, upon seeing or hearing the name DOWN-N-OUT in connection with a burger restaurant, it is possible that some people with imperfect recollections of the INO marks might not remember that the first word used in those marks was “In”.

155    In any event, upon seeing or hearing the name DOWN-N-OUT used in connection with burgers, some people with an imperfect recollection of the INO marks might indeed wonder whether a burger restaurant called DOWN-N-OUT was IN-N-OUT BURGER or was in some way related to it, as at least one of the social media posts suggests. The use of “Down” in conjunction with “N-Out” in connection with the sale of burgers and related goods raises a reasonable doubt about whether there a relationship between IN-N-OUT BURGER and DOWN-N-OUT. No evidence was led to indicate that “N-Out” or “N Out” had been used in the brand name of anyone other than the applicant before Messrs Kagan and Saliba decided to use it in DOWN-N-OUT to refer to their own burgers while at the same time referencing IN-N-OUT BURGER.

156    Besides, having regard to the ordinary meaning of “down and out”, the use of the name DOWN-N-OUT, with or without the variations in punctuation, to sell burgers and related goods, might also cause some people with an imperfect memory of the applicant’s marks to wonder whether the name refers to a down-market or “no frills” version of IN-N-OUT BURGER.

157    In closing argument, counsel for the respondents submitted that the DNO marks evoked the idea “if you’re down and out that you’re going to be … struggling in a grungy bar”, only able to afford burgers and fries. He asked rhetorically, “if you’re down to your last 10 bucks and you need something to eat, what are you going to get?” Since the applicant also sells burgers and fries and its goods are also inexpensive, this is scarcely a point of distinction. Where the registered goods are associated with the very idea “down” as opposed to “in” is said to convey, the substitution of “Down” for “In” could not eliminate the danger of confusion.

158    As the applicant submitted, the surrounding circumstances do not include idiosyncratic features of the respondents’ business, such as cartoon hamburger drunkards, prostitutes, and vagabonds or its “dive-bar feel”. Nor do they include the differences in get-up. The relevant surrounding circumstances are these. The trade marks are used in connection with the sale of fast food, particularly, but not exclusively, burgers. The goods and services to which they relate are sold and supplied in branded restaurants and pop-up events in restaurants and bars belonging to other traders. They may also be taken away and eaten off the premises. The undisputed evidence of Mr Warnick was that for those customers who choose to dine in, residency time is short. The goods are low cost and are not the subject of close appraisal or careful inspection.

159    It is true that there are visual dissimilarities between the respective marks, which increased progressively over time. But none of these changes affected the impression created by the sound of the marks. That never changed. In Berlei Hestia, where there was no finding of visual similarity, BALI-BRA was held to be deceptively similar to BERLEI by reason only of the aural (“phonetic”) similarity of the two marks. Similarly, in Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 (FC) the marks REVISE and LEVI’S were held to be deceptively similar because of their aural similarity, despite the obvious visual differences.

160    Whatever bearing it may have on their intentions, it is otherwise irrelevant that the respondents’ media release made it clear that the goods they would be serving did not come from the applicant. As Greene MR stated in Saville at 161:

In an infringement action, once it is found that the defendant's mark is used as a trade mark, the fact that he makes it clear that the commercial origin of the goods indicated by the trade mark is some business other than that of the plaintiff avails him nothing, since infringement consists in using the mark as a trade mark, that is, as indicating origin.

161    For all these reasons, I find that all the DNO marks infringed the applicant’s registered marks because they were deceptively similar to those marks in that they so nearly resembled the applicant’s marks that they were and are likely to cause confusion.

The ACL claims

The claim

162    This claim relates to the use of the DNO name and logos at the Sir John Young Hotel and the various other venues where the respondents staged pop-up events or opened restaurants. It also extends to the use of the DNO marks on the respondents’ website and social media.

163    The applicants pleaded that by using the DNO marks to advertise, market or promote their restaurant and take-away services and to distribute, offer for sale and sell fresh-made burgers and associated food and beverages, the respondents “[sought] to mimic or model the applicant’s goods and services”. They relied on the alleged resemblance between the menu items offered by the applicant and the respondents and the adoption and use by the respondents of “the applicant’s feature of a ‘secret menu’”.

164    They also pleaded that on each of the occasions when one or more of these signs has been used the respondents falsely represented that:

(1)    the respondents’ goods and services are provided by the applicant;

(2)    the respondents’ goods and services are associated with the applicant;

(3)    the respondents’ goods and services are provided with the endorsement, approval, licence, authority or sponsorship of the applicant;

(4)    the respondents’ goods and services are associated with the applicant’s goods and/or services;

(5)    the respondents, or one or more of them, are associated with the applicant;

(6)    the respondents, or one or more of them, have the endorsement, approval, licence, authority or sponsorship of the applicant.

165    The applicant pleaded that this conduct contravenes ss 18, 29(1)(g) and/or 29(1)(h) of the ACL. At the trial, however, it sensibly chose to proceed only with the s 18 claim.

166    It was no part of the applicant’s case that any aspect of the get-up used by the respondents was relevant to these representations.

167    The respondents submitted that there are significant points of difference between the parties’ names: that, on their face, the DNO marks communicate a different message and impression than the registered marks; and that there is nothing inherent in the phrase “Down N Out”, its variants or the DNO logos which communicates that any of the respondents is the applicant or that the respondents’ goods and services are provided, sponsored, endorsed or approved by the applicant. They also submitted that, when the use of the DNO marks is considered in context, “it is tolerably plain” that the respondents’ restaurant is not the applicant’s and is not otherwise associated or endorsed by the applicant. They argued that, from its inception, the respondents’ branding and advertising adopted a “playful ‘down n out’ theme consisting of cartoon hamburger drunkards, vagabonds and hashtags in a ‘dive-bar’ setting” and that this motif and message is reinforced on signs, billboards, burger wrappers, tray liners and uniforms in all the DNO stores. They claimed that this was “the key message and impression” communicated in those stores and on their website and online social media platforms. Furthermore, they argued that the manner and context in which the DNO marks have been used differs markedly from the clean 1950s diner-style branding associated with the applicant’s in-n-out brand and incorporated in all of its signage, packaging, uniforms and store fit-outs, making them instantly recognisable to anyone who has ever patronised its restaurants.

168    The respondents relied on the judgment of the Full Court in TGI Friday’s Australia Pty Ltd v TGI Friday’s Inc [1999] FCA 304; (1999) 45 IPR 43, a case they submitted has “parallels to [the present case]”, in which the Full Court (Wilcox, Kiefel and Emmett JJ) considered that the differences between the parties trade indicia, get-up and advertising were so substantial that there was no prospect of deception. I will return to this case later.

169    Before going any further it is necessary to say something about the applicant’s reference to “take-away services” allegedly offered by the respondents. The statement of agreed facts did not mention any such services and there was no reference to them in the respondents’ evidence. There is no reason to believe, having regard to the nature of the respondents’ business, however, that such services would not have been available. Indeed, there is every reason to think otherwise. In any case, Ms White’s evidence included several screenshots of the DNO website which referred to DNO menu offerings being available online through two online delivery companies. No doubt an order could also be placed by a phone call to the restaurants themselves and collected. I am satisfied that it is more likely than not that take-away services were available from all the respondents’ restaurants and pop-ups.

170    The earliest screenshot of the DNO website dates back to 27 October 2016. That and several others were obtained using the Wayback Machine website. No evidence was led to show that the webpages formed part of the records of the business conducted by the persons responsible for the Wayback machine, which means that the evidence was hearsay (see, for example, Voxson Pty Ltd v Telstra Corporation Limited (No 10) [2018] FCA 376 at [36]–[37] per Perram J). But the evidence was admitted without objection.

The relevant principles

171    Section 18(1) of the ACL prohibits a person from engaging in trade or commerce in conduct that is misleading or deceptive or likely to mislead or deceive.

172    Once again, the relevant principles were not in dispute. They are well-established. They are drawn from the case law on the predecessor of s 18(1), s 52 of the Trade Practices Act 1974 (Cth), which is relevantly indistinguishable from s 18(1).

173    First, conduct is misleading or deceptive if it leads or is capable of leading a not insignificant number of people into error: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198–199 (Gibbs CJ). While some of the authorities speak of a “significant” or “substantial”, rather than “not insignificant” number, there is no material difference in the meaning of these terms: see Optical 88 at [336]–[341]. Conduct is likely to mislead or deceive if there is a real chance that it will lead to error: Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 87 (Bowen CJ, Lockhart and Fitzgerald JJ). In contrast to trade mark infringement, however, “ordinarily” conduct which merely causes some confusion or uncertainty is not enough: Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 200–1 (Deane and Fitzgerald JJ); Campomar at [106]. As Deane and Fitzgerald put it in Taco Bell at 200, “no conduct can mislead or deceive unless the representee labours under some erroneous assumption”. In some circumstances, however, their Honours explained at 201, in a passage the Full Court of the High Court expressly endorsed in Campomar at [106], there is no necessary dichotomy between confusion on the one hand and misleading or deception on the other. Their Honours explained:

Conduct which produces or contributes to confusion or uncertainty may or may not be misleading or deceptive for the purposes of s 52. In some circumstances, conduct could conceivably be properly categorized as misleading or deceptive for the very reason that it represents that confusion or uncertainty exists where, in truth, there is no proper room for either. Ordinarily, however, a tendency to cause confusion or uncertainty will not suffice to establish that conduct is of the type described in s 52. The question whether particular conduct causes confusion or wonderment cannot be substituted for the question whether the conduct answers the statutory description contained in s 52.

174    Second, while no intention to mislead or deceive need be proved, where there is such an intention a court may more readily infer that the intention has been realised or that the conduct is likely to mislead: Campomar at [33]. As Weinberg and Dowsett JJ stated in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 234 FCR 549, a case concerning similarities in get-up rather than trade names, at [117]:

[W]here a trader, having knowledge of a particular market, borrows aspects of a competitor’s get-up, it is a reasonable inference that he or she believes that there will be a market benefit in so doing. Often, the obvious benefit will be the attraction of custom which would otherwise have gone to the competitor. It is an available inference from those propositions that the trader, with knowledge of the market, considered that such borrowing was “fitted for the purpose and therefore likely to deceive or confuse”. Of course, the trader may explain his or her conduct in such a way as to undermine the availability of that inference. Obviously, this reasoning will only apply where there are similarities in get-up which suggest borrowing.

175    Third, where, as here, the allegation relates to the use of words in connection with a particular product or product range and a restaurant or number of restaurants, it is necessary first to determine what the words mean to a relevant person when used in relation to the relevant products or restaurants: Taco Bell at 180–1 (Franki J).

176    Fourth, where the conduct is directed to members of the general public, it must be judged by its effect on ordinary or reasonable members of the class of prospective purchasers: Campomar at [102]. That includes the experienced and inexperienced, the intelligent and the not so intelligent, the well-educated and the poorly educated, the astute and the gullible (Taco Bell at 202 per Deane and Fitzgerald JJ; Parkdale at 199 per Gibbs CJ), but not those who fail to take reasonable care of themselves: Parkdale at 199. The question is whether the misconceptions or deceptions alleged to arise or likely to arise are properly to be attributed to the ordinary or reasonable members of that class: Campomar at [105]. Extreme or fanciful assumptions are to be disregarded because they would not be attributed to the ordinary or reasonable members of the class of prospective purchasers: Campomar at [102]–[105].

177    Fifth, the inquiry is much broader than that which is undertaken to determine deceptive similarity for the purpose of a trade mark infringement claim. Here, the respondents’ conduct must be considered as a whole and all the surrounding circumstances must be taken into account including circumstances extraneous to the marks: Taco Bell at 202 (Deane and Fitzgerald JJ). Those circumstances include the strength of the applicant’s reputation, a matter to which I will come shortly; the strength of the respondent’s reputation and the extent of its advertising; the nature and extent of the differences between the products; whether the parties are in direct competition; the circumstances in which the respective products are offered to the public; and whether the respondent has copied the applicant’s products or intentionally adopted prominent features and characteristics of them: see Verrocchi v Direct Chemist Outlet Pty Ltd (2016) 247 FCR 570 (FC) at [69].

178    Sixth, although evidence of actual deception is relevant, it is not essential and a finding may be reached in its absence: Global Sportsman at 87; Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73 at [45] (Allsop CJ).

179    Seventh, conduct will be likely to mislead or deceive if there is a “real and not remote chance or possibility” of it occurring and the chance need not be greater than 50%: Global Sportsman at 88.

The nature and extent of the dispute

180    There is no dispute that the impugned conduct occurred in trade or commerce in connection with the supply or possible supply of goods or services and also in connection with the promotion of the supply or use of goods or services. Nor is it in dispute that, if any of the pleaded representations was made, it would have been false and therefore misleading or deceptive or likely to mislead or deceive. During closing argument, counsel for the applicant acknowledged that, in order for the applicant to succeed, it was only necessary for the Court to be satisfied that the respondents had made one of the pleaded representations and that there was no utility in the Court making findings on each of them. Consequently, the only issue is whether one or more of the respondents made any of the pleaded representations. It is therefore enough that the applicant establish that, by their conduct, the respondents represented that there was an association between them and the applicant. It is unnecessary to determine the nature of that association.

181    There is, however, an anterior issue. That is whether at the relevant time the applicant’s brand enjoyed a reputation in Australia. It was common ground that the relevant date for the determination of this question is the date the impugned conduct began: see Budweiser at [153]. That date is 25 May 2016, when the DNO Facebook page was launched.

The applicant’s reputation

182    Unlike in passing-off, to which I will come in due course, which is concerned with the protection of goodwill, reputation is not an element of the statutory cause of action, which is concerned with the protection of consumers. But that does not mean that reputation is irrelevant. As the Full Court put it in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 at [99]:

The question is not whether an applicant has shown a sufficient reputation in a particular get-up or name. The question is whether the use of the particular get-up or name by an alleged wrongdoer in relation to his product is likely to mislead or deceive persons familiar with the claimant’s product to believe that the two products are associated, having regard to the state of the knowledge of consumers in Australia of the claimant’s product.

183    Thus, unlike in trade mark infringement, evidence of reputation is admissible and may be probative. Indeed, it is necessary where, as here, the applicant is a foreign trader. As Hill J observed in ConAgra Inc v McCain Foods (Aust) Pty Ltd (1991) 101 ALR 461 at 487–8:

[F]or conduct to be misleading or deceptive or likely to mislead or deceive it will, in a case such as the present, be necessary for the applicant to establish a reputation in the country. This is so because, if the applicant has no reputation in Australia, then the respondent's conduct in adopting the “Healthy Choice” name and get up cannot be said to be misleading because it would not cause persons in the community to be misled …

184    That said, his Honour went on to explain:

However, at the end of the day, the question is not so much whether an applicant has shown a sufficient reputation, looked at in the abstract, rather, whether the launching of a product under a name and get up which would lead persons familiar with the applicant's product to believe the two products were associated is, in Australia, conduct which is misleading or deceptive or likely to mislead or deceive having regard to the state of knowledge of consumers in Australia of the applicant's product … [P]rovided that the applicant shows on the balance of probabilities that a not insignificant number of persons have such knowledge, the applicant should be entitled to succeed. If the number of persons with the necessary knowledge is insignificant, then a fortiori the conduct complained of will not be able to be characterised as conduct that is misleading or deceptive. Once it passes, however, the threshold of insignificance, then there is much to be said for the view that the conduct in question has become misleading.

185    In their defence the respondents pleaded that the applicant does not conduct its fast-food business in Australia and therefore has no goodwill here. Goodwill in this context is the same as reputation: ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 (FC) at 340 (Gummow J).

186    The respondents’ pleading reflects the position taken by Hill J, who felt constrained at first instance in ConAgra to find that the tort of passing-off requires the existence of a business in Australia and, in the absence of a business in Australia, that cause of action was doomed to fail. But that position was rejected by the Full Court on appeal. In separate judgments, all members of the Full Court (Lockhart, Gummow, and French JJ) held that it was not necessary for a foreign trader to have either a place of business or a physical presence in Australia for it to have a reputation here. Lockhart J 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 comer 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.

187    These remarks were made 27 years ago in 1992, two years before Amazon was founded, “when the World Wide Web was still in its infancy” (Pham Global at [81]), before Google, Facebook, Instagram or Twitter, indeed before the advent of publicly available internet browsers, and when the cost of air travel was beyond the reach of many Australians. With the increased availability of cheaper air travel, the massive expansion of the internet, the popularity of online shopping and social media, it is true with even greater force today.

188    As Lockhart J put it at 344, it is enough that the goods [and/or services] of the foreign trader have a reputation in this country among people present here, whether or not they are Australian residents, of a sufficient degree to establish that there is a likelihood of deception among consumers and potential consumers. As for the extent or scope of the reputation required, his Honour held at 346, confirming the position taken by Hill J, that the applicant must prove that there are a substantial number of persons who are aware of the its products (and who were therefore potential customers).

189    Similarly, Gummow J said at 372:

In my view, where the plaintiff, by reason of business operations conducted outside the jurisdiction, has acquired a reputation with a substantial number of persons who would be potential customers were it to commence business within the jurisdiction, the plaintiff has in a real sense a commercial position or advantage which it may turn to account. Its position may be compared with that of a plaintiff who formerly conducted business within the jurisdiction and has retained a reputation among its erstwhile customers, and with that of a plaintiff with a reputation which arises from its trade in the jurisdiction, but extends to goods or services which are not presently marketed by him. If the defendant moves to annex to itself the benefit of such a reputation by attracting custom under false colours, then the defendant diminishes the business advantage of the plaintiff flowing to it from the existence of his reputation.

This is so whether the plaintiff is a party which may expand into a new field of business or resume a former business conducted in the jurisdiction, or a party which may enter the jurisdiction to establish a business for the first time. The immediacy and intensity of the intention of the plaintiff to commence or resume business is, in my view, a question going not so much to the invasion of the plaintiff's rights as to the imminence of a threat sufficient to justify an injunction …

190    The appeal in ConAgra was only concerned with passing-off. Notwithstanding the differences between passing-off and misleading or deceptive conduct under the ACL, neither side suggested that these principles were not equally applicable to the statutory claim.

191    The applicant submitted that Australians have been exposed to its restaurants in the United States for decades. Evidence was adduced of the number of Australian resident short-term departures to the United States. The Australian Bureau of Statistics estimated that there were 441,400 in 2006 and 1,053,400 in 2016. As at May 2016, the applicant had over 300 restaurants located in six States. LAX is a major entry port into the country. California, in particular, is a popular tourist destination, including for Australians. One of the applicant’s restaurants, for example, is situated in Anaheim, the home of Disneyland, a popular holiday destination for many Australian families. Many of the applicant’s restaurants are strategically located in high profile tourist areas and on major thoroughfares.

192    The respondents disparaged this evidence. They submitted that it was of little assistance in that it falls short of establishing that a significant number of Australians have visited the applicant’s restaurants and are aware of its products and services. But this evidence was a small portion of the applicant’s case on reputation and it should not be taken in isolation. The applicant also tendered numerous articles from the popular press encouraging Australians to visit an In-N-Out restaurant and sample the burgers when they travel to the United States to enable me to conclude that it is more likely than not that a not insignificant number of Australians who have travelled to the United States and to California, in particular, have eaten at one or more of the applicant’s restaurants or at least seen its signs, whether from the skies, on the road, or by passing one of its restaurants.

193    When all the relevant evidence is taken into account, I am satisfied that as at 25 May 2016 a substantial number of persons in Australia were aware of the applicant’s brand, its restaurants and its products. Indeed, it is difficult to understand why the respondents contested the point.

194    It will be recalled that in January 2016, soon after the applicant’s Sydney pop-up at the Dead Ringer restaurant and bar in Surry Hills, Messrs Kagan and Saliba described In-N-Out burgers as “legendary”. Moreover, as the applicants put it, In-N-Out’s reputation was the very platform from which the respondents launched their first pop-up. Put another way, it was the bait used in their advertising campaign to attract customers to their business. Furthermore, the media release for the first DOWN-N-OUT pop-up at the Sir John Young Hotel was headed “Sydney’s Answer to In-N-Out Burgers Has Finally Arrived”. If the applicant had no reputation in Sydney, what was the point of the reference?

195    There was evidence of the applicant’s overseas trading and considerable media interest in its business. There was extensive evidence about the popularity of In-N-Out burgers and the notoriety of the brand in the United States. It is clear from ConAgra that reputation may spill over from overseas trading. I have no doubt visitors to Australia from the United States would be well aware of the brand. It is sufficient for present purposes, however, to refer to the Australian reports.

196    Well before the first pop-up event in Australia, In-N-Out was being discussed in the Australian media. On 26 February 2006, for example, Danielle Teutsch, a decade earlier, in the Travel section of The Sun Herald, wrote that in the United States people were said to drive miles out of their way to visit the burger chain. She noted that it had “inspired many a convert because of its use of fresh ingredients”. She said that for some of the In-N-Out faithful, buying a burger at IN-N-OUT was “a religious experience”. On 5 August 2006 Jessica Halloran reported that IN-N-OUT was Ian Thorpe’s favourite fast food place because the protein style burger, which replaces the bun with lettuce leaves, complied with his no-carbohydrate diet. On 9 September 2006 the Fairfax press carried a news item on Paris Hilton’s arrest in Hollywood for drink-driving, reported that Ms Hilton conceded that she might have been speeding a little but was desperate for an In-N-Out burger.

197    On 7 August 2007, in the Sports section of The Age, Warwick Green wrote:

SO YOU’RE Maria Sharapova and you’ve just won a three-setter against Patty Schnyder to stitch up the Acura Classic in San Diego. Would you celebrate by jumping in the car and heading down to the In-N-Out Burgers for a patty in a bun? Well, if you’re Sharapova, yes, you would. But why, the journalists wanted to know, “The burgers … derr”, was the reply. Ask a stupid question.

198    In an interview with two long-time residents of Los Angeles, published in the Australian Financial Review (“AFR”) magazine on 24 April 2009, “a double-double at In-N-Out” was mentioned in response to a question about the flavour of the city. Similar references appeared in other travel articles published in Australian newspapers in September and October 2009. IN-N-OUT was described as an institution in California in the AFR Life & Leisure section on 18 December 2009 and its offerings were referred to as “the best bargain in town”. It was described as an institution in several American states in a travel article in The Sun Herald on 16 August 2009, which was accompanied by photographs of its menu. Readers were directed to the applicant’s website for further information. In-N-Out was similarly promoted in another article in the same newspaper on 6 June 2010.

199    In the television guide in South Australia’s Sunday Mail on 21 February 2010, grabbing an In-N-Out burger was described as a “thing … these days in La-La-Land”.

200    In an interview reported on 11 August 2010, in the men’s magazine, Alpha, the American golfer, Phil Michelson, told a journalist that, if he could have someone waiting for him at the end of the 18th hole with a cold beer from his favourite burger restaurant, In-N-Out, he would be “a very, very happy man”. He said that, although the restaurant was 30 minutes away from his home, it was worth the trip because the burgers were so good.

201    More than one Australian newspaper referred to the “cult-like” appeal of the applicant and its burgers.

202    The day after the first pop-up event, held in January 2012 at Barrio Chino, in Kings Cross, The Daily Telegraph reported that a riot had broken out there. The piece was included in a regular column called “Sydney Confidential”:

BATTLING FOR A CULT BURGER

A RIOT broke out in Kings Cross yesterday …

Cult California fast food chain In-N-Out Burger had a “pop-up store” at Mexican canteen Barrio Chino for just a few hours.

The wait at one point was 90 minutes but Kyle Sandilands – who owns an office on the same street – was first in line.

203    The event was also reported in the Sydney Morning Herald four days later, on the Saturday, in Andrew Hornery’s “Private Sydney” column. He wrote:

IN, BUT MOSTLY OUT

Celebrity endorsements come in all shapes and sizes and, depending on the celebrity and the product, they can have varying degrees of success. So, PS is a little unsure if it was the presence of rotund radio motor-mouth Kyle Sandilands slobbering over an IN-N-OUT in Kings Cross this week, or the cult-like appeal of the US burger chain, that resulted in fast food joint’s Kings Cross “pop-up” store being such an overwhelming success. The makeshift store … proved so popular it ran out of burgers in less than an hour, despite original intentions for a whole day’s trading. Officially, the chain has no plans to launch permanently in Australia.

204    In another report on the event, the queues were said to be so long that many people did not get served. On 7 February 2012, the AFR reported that word about the In-N-Out pop-up spread on Twitter and the burgers were sold out by lunchtime.

205    The Northern Territory News Corp publication, Centralian Advocate, carried an article on 11 January 2013 in which the author, Jeffrey Gitomer, told readers that he frequented In-N-Out Burger whenever he was in California.

206    On 21 January 2013, The Daily Telegraph reported that Connie Mitchell and Angus McDonald of the Australian dance music group, Sneaky Sound System, had flown to Los Angeles “for a whirlwind songwriting session … and to indulge their love of In-N-Out burgers”.

207    In its travel section on 17 February 2013, The Sun Herald featured an article by Ben Groundwater in which he waxed lyrical about the delights of In-N-Out Burger. He described his visit to an In-N-Out restaurant as “the grand finale” of his trip to California. He reported that Californians “don’t just like it”:

In-N-Out, they love it. Hollywood celebrities love it. Grumpy chefs such as Gordon Ramsay and Anthony Bourdain love it. It’s an institution and it demands a visit. No tour would be complete without it.

208    At the end of his description of his visit, he wrote: “I’ve saved the best for last …”

209    On 12 July 2013, Hannah Tattersall in the Life & Leisure section of the AFR, told readers that when in San Francisco they had to try “the West Coast-only In-N-Out burger” and encouraged them to order a Neapolitan thick shake from the “secret menu”. On 2 August 2013, Wish magazine, a News Corp publication supplied with The Australian newspaper, referred to In-N-Out Burger as “a west coast institution”. It was listed as the “best fast-food fix” in the world. No visit to Los Angeles was said to be complete without a visit to one of its drive-through restaurants.

210    In an article published in The Age on 24 June 2014, In-N-Out Burger was described as a “celebrated American burger chain” and one of a number that have “heavily influenced Melbourne’s new-wave burger scene”. The following month, on 26 July 2014, Sydney’s The Daily Telegraph reported that the pop star, Katy Perry, allows herself a day off a weak to “go buck wild and eat In-N-Out Burger”. On 26 August 2014, The Sydney Morning Herald noted that, following the MTV Video Music Awards, Miley Cyrus took a homeless man to In-N-Out Burger and had shared the moment on Instagram. On 21 September 2014, Aaron Peasley wrote in Melbourne’s Herald Sun about his temptation, following his departure from a luxury health retreat in Malibu, to “direct the driver to the nearest In-N-Out for a burger and fries”.

211    On 2 March 2015, John Upton, in Business Spectator, another News Corp publication, in an article on renewable energy, wrote that In-N-Out Burger was one of the defining features of the Southern Californian landscape. On 1 July 2015, Ben Groundwater, writing in the Fairfax papers, The Age and The Sydney Morning Herald, asked rhetorically whether culture was an In-N-Out burger. References to In-N-Out topped and tailed his article. On 2 September 2015, Laura Nelson reporting for the website, news.com.au, on her trip to Los Angeles mentioned In-N-Out as one of her two favourite fast-food outlets. On 8 September 2015 The Gold Coast Bulletin carried an article on a local eatery called “Betty’s Burgers”, in which the owner described the enterprise as “in the mould of In-N-Out and The Shake Shack” — “simple but delicious”. No further explanation followed, presumably because it was considered unnecessary. On 23 October 2015, Fairfax-owned media across the country carried an article on four-wheel drive vehicles in which it was reported that Christina Aguilera was spotted in a new Range Rover while driving through In-N-Out.

212    On 19 January 2016, under the heading, “In-N-Out pops up in Australia and sells out in 10 minutes”, Mashable, a US online magazine, reported that “California’s cult burger chain” had returned to Australia and had attracted “a crowd of hundreds wanting a taste of their special source”. A reporter and photographer for the magazine arrived at 10.20am by which time the line had already stretched to more than a hundred “eager burger fans queuing from early in the morning”. The In-N-Out logo was “proudly on display” and “servers were kitted out in the red and white uniforms that are an essential part of the chain”. Photographs of a burger, eager burger fans, and In-N-Out staff accompanied the article. Mashable reported that the pop-up-store was open from midday through to 4pm but told readers not to bother going since “the line got cut off at 11.10am AEDT, as the final wristbands were handed out. No wristband = no burger”. One newly married couple, who were at the top of the queue, told the magazine that they had been to In-N-Out in San Francisco on their honeymoon and “loved it” and the moment they saw that it was coming to Sydney they “dropped everything” to get there. The first person to be cut off “among a hoard of burger fans” was “devastated”, according to the report, lamenting that he should have taken an Uber instead of a train.

213    Four thousand three hundred people shared the Mashable story. These were not just people who knew about the business, but liked it, and were engaged with it enough to want to spread the word.

214    In another online article the same day, Emilie Cornish counselled Sydneysiders to try to remain calm about the event. She described In-N-Out’s burgers as “world-famous”.

215    The Australian business website, SmartCompany, reporting on “the peaks and pitfalls of retail pop-ups” on 21 January 2016, noted that “devoted fans who have sampled the fast food outlet in the US and In-N-Out newbies have whipped up a social media storm”. The author of the article, a lecturer in marketing at the University of Melbourne, continued:

Despite a pre-advertised limit of 300 burgers, customers began queuing in an inner-city Sydney street at dawn, hunkering down in the summer heat until … midday for the chance to consume a burger, fries or shake at the opening of the In-N-Out Burgers pop-up store.

216    On 24 January 2016 The Sun Herald also reported on the event in its News section.

217    On 20 January 2016, under the pseudonym “hashtag_hustler”, Mr Kagan posted a picture on his personal Instagram account of the long queue in the street waiting to get into the Dead Ringer bar for the In-N-Out pop-up. He also wrote: “About 300 deep and counting”. He remarked that the event was “sold out before even opening”. Another photograph taken the same day showed him leaving the premises wearing an In-N-Out Burger T-shirt.

218    Having regard to the fact that the applicant has held pop-up events in Australia at least once and sometimes twice a year since 2012, by May 2016 about 1200 burgers are likely to have been consumed in Australia and up to about 1200 consumers are likely to have experienced its products and services on Australian soil.

219    The applicant’s trade marks and branding were extensively used at the pop-up events. Photographs of the pop-ups show large banners featuring the applicant’s device mark alongside a queue of eager customers and inside the venues and the device mark emblazoned on paper bags, on T-shirts and other items of apparel worn by staff at those events, on the menus and on the wrist bands that were evidently given to all those who entered. They also reveal that T-shirts were available for sale at the events and it appears that some customers, like Mr Kagan, took to wearing them there and then.

220    Mr Warnick’s undisputed evidence was that the pop-up events are advertised only one or two days before they occur. As the applicants submitted, it is not plausible that their pop-ups could generate such a response unless the applicant’s brand had a significant reputation in Australia.

221    Then there is the evidence about the number of Australian visitors to the applicant’s website.

222    Messrs Kagan and Saliba sought to capitalise on the success of the applicant’s Sydney pop-ups in inner-city suburbs of Sydney by hosting their own, promoted as “tributes” to In-N-Out Burger, both at the Lord Gladstone Hotel in Chippendale, another inner-city Sydney suburb. After the second, held 11 days after the applicant’s own pop-up at the Dead Ringer bar, it was reported that “[l]ines snaked down the block and 500 burgers went in two hours”. This outcome reflects the success of the applicant’s Dead Ringer pop-up. It is highly likely that the success of the respondents’ “tribute” event was in no small measure due to the reputation and popularity of In-N-Out Burger. Moreover, the Sir John Young pop-up was located only a 20-minute walk from the Dead Ringer bar. These events were obviously designed to attract customers who had been customers of the applicant and new customers who had heard of, or read about, the applicant and its products.

223    The respondents submitted that, if the applicant were found to have a reputation, that reputation is not confined to the names, trade marks and logos it uses, but extends to “the whole of the applicant’s approach to the marketing and promotion of its restaurants”. They argued that, if anything, “the combination of all the applicant’s features conveys the clean, wholesome image of the family-friendly restaurants located in the United States and which are sought to be replicated, albeit on a small and temporary basis, in its pop-ups in Australia. It includes the quick service approach to food consumption so readily associated with venues with drive-through facilities. It includes the awareness of the applicant has stores only in the western half of the United States of America and that, to all intents and purposes, it will not establish a permanent business presence in Australia”. But it cited no evidence to support this argument. There is certainly no evidence to suggest that the fact that the applicant currently has no plan to establish a permanent restaurant in Australia is known to members of the relevant class.

224    I am persuaded that at the relevant time the applicant’s name and brand were known to a substantial number of people who were its potential customers, whether from visiting an In-N-Out restaurant or from reading or hearing about the restaurants and its burgers. They include Australian consumers and visitors to Australia, particularly visitors from the United States. Some of those people are likely to have been familiar with the look and feel of the restaurants. A not insignificant number, however, would not have been.

The respondents’ reputation

225    The respondents made no submissions about this subject and there is a dearth of evidence about the extent of the reputation of either Hashtag Burgers or the DNO brand. No evidence was led about the respondents’ advertising or expenditure on advertising. The only evidence consisted of the social media posts and the existence of Facebook and Instagram accounts and the website. The name “Down-N-Out” was first used publicly by Messrs Kagan and Saliba on 31 January 2016 in its Facebook advertisement for the Funk-N-Burgers event — 11 days after the sell-out In-N-Out Surry Hills pop-up. There is no evidence to indicate that the name “Hashtag Burgers” was known by a substantial or significant number of consumers at any relevant time. I am not satisfied that either Hashtag Burgers or the DNO brand had a significant or substantial reputation in Australia at the time the impugned conduct began or, indeed, should it be relevant, at any later time.

The relevant class of consumer

226    It was not disputed that the relevant class of consumer was as the applicant defined it: “those members of the public who have been, are or may be in the future interested in acquiring burgers and associated food/beverages and related restaurant services”. As the applicant put it, this encompasses “a wide spectrum of the public, of all ages, backgrounds, levels of sophistication and intelligence”. These are the prospective purchasers.

The respondents’ intention

227    For the reasons given above, Messrs Kagan and Saliba deliberately used significant features of the INO marks with the intention of confusing consumers in order to appropriate part of the applicant’s reputation. In addition to those reasons I take into account the following matters.

228    “Down” was a deliberate allusion to Australia. Australia is colloquially referred to as “the land down under” or just “down under”. “Down Under” is defined in the Macquarie Dictionary online (accessed 10 July 2019) when used as a noun as “1. Australia; 2. New Zealand, and 3. Australia and NZ considered broadly as a region” and when used as an adjective to mean “of or relating to Australia or NZ or both”. The Macquarie Dictionary online gives this pertinent example from AAP News, 2000: “The Aussie Stampede was proposed as a Down Under version of Dolly Parton’s Dixie Stampede at Dollywood in Tennessee”.

229    “Down Under” was also a very popular Australian song released in 1981 by the Australian band, Men at Work. I venture to suggest that there would be few Australians who listened to commercial radio at the time who do not remember it and who could not hum, if not sing, the opening lines. A copyright dispute about the use of a riff in the song, which was heard in this Court in 2009, attracted a great deal of media attention.

230    In his reply to the cease and desist letter, Mr Kagan expressly referred to this connotation. Ms Tucker alluded to it in the post to which he and/or Mr Saliba responded with the three victory emojis. Having regard to the connection between Australia and “Down Under”, the evidence of the applicant’s reputation, and the applicant’s history of popping up in Australian restaurants and bars, a significant number of people with an imperfect recollection of the applicant’s marks might well have wondered whether Down-N-Out was an Australian branch or franchise of In-N-Out Burger established to appeal to Australian consumers. There is a real chance that the use by Messrs Kagan and Saliba of the “secret menu” and the offerings of burgers “Animal Style” or “Protein Style” would have added to the confusion. Mr Kagan admitted as much in his text message to Mr Paine on 7 July 2016 (see [57] above).

231    In the context of the infringement claim, I did not decide that the respondents’ use of the DNO marks was likely to deceive. It was unnecessary to do so, as it was sufficient for that purpose that it was likely to cause confusion. Here, however, there is no contravention unless there is a likelihood that the respondents’ conduct was misleading or deceptive in that it made one or more of the pleaded representations. This is not an easy question to answer. As Lockhart J observed in Bridge Stockbrokers Ltd v Bridges (1974) 4 FCR 460 at 473, while the notions of conduct which is likely to confuse and conduct which is misleading or deceptive or likely to mislead or deceive are logically distinct, in practice the boundary between the two is sometimes very fine. As his Honour also observed, “the state of being misled or deceived often follows an earlier state of confusion or uncertainty”.

232    So was the respondents’ conduct misleading or deceptive or likely to mislead or deceive? Did it make any of the pleaded representations?

Did the respondents make any of the pleaded representations?

233    The applicant relies on six categories of conduct:

(1)    the initial representations at the Sir John Young Hotel during the period 6 June 2016 to August/September 2016;

(2)    incremental changes at the Sir John Young Hotel during the period August/September 2016 to July 2018;

(3)    representations at the DNO restaurants in Penrith, Ryde, Wollongong, and Crows Nest;

(4)    representations at the relocated CBD restaurant;

(5)    representations at the relocated Ryde restaurant; and

(6)    website and social media use.

Category 1: initial representations at the Sir John Young Hotel (6 June 2016 to August/September 2016)

234    These representations were depicted in a number of images taken from photographs of the exterior and interior of the pop-up during this period and feature the use of the DOWN-N-OUT name with logos 2 and 3 prominently displayed on the signs and, after the issue of the applicant’s cease and desist letter, logo 5.

235    The applicant submitted that the context in which the DNO marks were used included the ordinary décor of a bar in which IN-N-OUT BURGER might have popped up, illustrated by the photos of the Sir John Young Hotel and the following description of the interior in the local magazine Sydney Eats:

The back dining room has had a minor update on the wall but otherwise the furniture has remained the same. The crowd is a mix of burger fans and backpackers. Large TV screens are dedicated to sports. A handful of outdoor tables line the footpath.

236    The applicants also relied on the following additional contextual items: the similarity of the DNO menu to the applicant’s menu and the “copy-cat Animal Style and Protein Style offerings”.

237    The applicant submitted that this conduct involved the making of representations to the effect that the respondents’ goods and/or services are provided by the applicant, are associated with the applicant and its goods and services, or are otherwise endorsed, approved, licensed, authorised or sponsored by the applicant. It is indisputable that if any such representation were made, it would have been misleading or deceptive or likely to mislead or deceive. The submission was based on the following premises.

238    First, having regard to the applicant’s reputation, there is at least a real and not remote possibility that some consumers will think that the two businesses are in some way connected.

239    Second, the respondents have deliberately appropriated parts of the applicant’s trade marks and branding.

240    Third, the respective parties are in the same business, selling the same goods to the same class of consumers using the same theme (such as pop-ups and secret menus) and very similar names, trade marks, and branding.

241    In these circumstances, the applicant submitted that it is highly likely that at least a not insignificant number of persons who know of IN-N-OUT BURGER and were exposed to the respondent’s conduct would be misled into believing that the respondents’ goods and/or services were provided by the applicant, or at the very least, were somehow associated with IN-N-OUT BURGER (such as an IN-N-OUT BURGER approved, authorised or endorsed “down under” spin-off or Australian version of IN-N-OUT BURGER).

242    For the most part, the applicant’s submissions should be accepted.

243    The respondents highlighted the different exteriors of the respective parties’ restaurants. In this instance they compared a photograph of the entrance to the pop-up with the vastly different appearance of the applicant’s restaurant in Anaheim Hills, California:

244    But this is a false comparison. The true comparison should be between the respective pop-ups and that was one the respondents did not undertake.

245    In any event, I do not consider the differences in the appearances of the exterior of the applicant’s permanent restaurants and the respondents’ pop-up at the Sir John Young Hotel to be relevant, particularly since the evidence is that the applicant established pop-up restaurants in other venues, including bars, which bear no resemblance to the exteriors of the applicant’s permanent restaurants.

246    I accept that the use of red and yellow is not unique to the applicant and that a number of businesses in the fast food industry, including burger restaurants, deploy those colours. Annexed to Ms Gleeson’s first affidavit was a blog on branding from a UK website written by a colour and design consultant, which was admitted without objection. In it the consultant expressed the following opinion:

Looking at the positive psychology qualities of red & yellow in relation to the fast food industry, red triggers stimulation, appetite, hunger, it attracts attention. Yellow triggers feelings of happiness and friendliness.

When you combine red and yellow it’s about speed, quickness. In, eat and out again …

247    The consultant cited the examples of Kentucky Fried Chicken, McDonald’s, Burger King, and IN-N-OUT. Ms Gleeson’s evidence also referenced Hungry Jacks.

248    For this reason I would not put any weight on the respondents’ use per se of red and yellow. What is significant, however, is that Messrs Kagan and Saliba chose to use those colours in precisely the same way as the applicant’s colours were used: red letters for the name and a bent yellow arrow either similarly positioned to the applicant’s yellow arrow in its logo or, in the case of the exterior neon sign, enclosed in a thin red border. There was a real prospect that the use of these features in this way would suggest to consumers with an imperfect recollection of the applicant’s signs that the two businesses were at least related and reinforce the impression created by the use of “-N-OUT” in the name of the respondents’ business. I have little doubt that this was the intention of Messrs Kagan and Saliba.

249    It is true, as the respondents submitted, that the interior of the DOWN-N-OUT pop-up bore little resemblance to any of the applicant’s restaurants, including the applicant’s pop-ups. Such evidence as there is of the applicant’s pop-ups in Australia shows that they featured the same colour scheme used throughout their fixed restaurants in the pop-ups. For example, the evidence shows that the applicant’s staff wore white shirts featuring the INO logo and white trousers, red aprons, and white paper hats or red caps both also emblazoned with the same trade mark. The evidence indicates that at all relevant times the applicants used paper cups, cartons, paper bags, tray liners, and wallpaper featuring designs of recurring red palm trees. There is no evidence to indicate that the respondents used any such or similar design on their corresponding items or at all. Inside the applicant’s pop-ups, there were also large white banners bearing its signature slogan “Quality you can taste”, which also appeared in all its Australian advertisements, and in prominent neon signs in its fixed restaurants. The evidence does not indicate that any similar slogan was used by the respondents.

250    Except for the chefs, who appear to have been dressed in white, hardly a distinctive feature in itself, the evidence indicates that the Down-N-Out staff at the Sir John Young Hotel pop-up sported black T-shirts with the sign “#burgers” printed on the front and did not wear hats or aprons. Further, the Sir John Young Hotel pop-up had a blackboard menu. The evidence indicates that the applicant did not use blackboard menus at any of its restaurants or pop-ups and the menu used in the pop-ups were in the applicant’s ubiquitous red and white colour scheme. While there were some similarities in the menus, with the exception of the reference to “secret menu”, those similarities could be attributed to the nature of the food and drinks. Apart from the reference to a “secret menu” which offered “Animal Style” and “Protein Style” burgers, the applicant did not suggest that there was anything distinctive about its menu offerings. What is more, the menu offered at the Down-N-Out pop-up was very basic and looked nothing like the menu displayed at any of the applicant’s restaurants.

251    If, however, as the applicant submitted, the use of the Down-N-Out name alone is misleading or deceptive or likely to mislead or deceive, then the differences in the appearance of the interiors are of no moment.

252    It is well established that “conduct which misleads a consumer so that, under some mistaken impression of a trader’s connection or affiliation, he or she opens negotiations or invites approaches may be misleading or deceptive even if the true position emerges before the transaction is concluded”: SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1821; (1999) 169 ALR 1; 48 IPR 593 at [51] (French, Heerey and Lindgren JJ). In Taco Bell at 199, Deane and Fitzgerald JJ said that it was sufficient if the conduct in the circumstances is misleading or deceptive or likely to mislead or deceive and that it was “unnecessary to go further and establish that any actual or potential consumer has taken or is likely to take any positive step in consequence of the misleading or deception”.

253    In Verrocchi v Direct Chemist Outlet Pty Ltd (2015) 228 FCR 189, a case, as his Honour described it at [63], “involving the adoption of trade indicia, rather than a trading name”, Middleton  J concluded that the interiors of the parties’ stores were so different that consumers would not be misled or deceived as alleged but added that, if the respondents had misled consumers only by their storefront get-up, he would have found that those consumers would already have been enticed in the respondents’ marketing web. His Honour said:

As will be apparent, I have reached the view that the interiors of the parties’ stores are sufficiently different, to the extent that consumers would not be misled or deceived on the basis pleaded by the applicants in this proceeding. Nevertheless, if the respondents had misled consumers only by their storefront get-up, I would have concluded that such customers would have already been enticed into the “marketing web” of the respondents.

254    Later, at [60]–[61], his Honour referred to SAP v Sapient at [51] and also to the High Court’s observation in Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [50]:

It has long been recognised that a contravention of s 52 of the TPA may occur, not only when a contract has been concluded under the influence of a misleading advertisement, but also at the point where members of the target audience have been enticed into “the marketing web” by an erroneous belief engendered by an advertiser, even if the consumer may come to appreciate the true position before a transaction is concluded.

255    The argument the respondents put in the present case about the significance of the distinctiveness of the applicant’s get-up was put in Taco Bell and rejected: see Taco Bell at 183 (Franki J); at 205 (Deane and Fitzgerald JJ). As the authors of Shanahan observed at 924, “[i]n Taco Bell, it was no consolation to diners who had travelled some distance to eat to find on arrival that the restaurant had a get-up different from that expected and to learn only then that it was not associated with the plaintiff’s restaurant of similar name; the defendant was restrained from using the name ‘Taco Bell’”. “Thus”, they continued, “if the defendant’s conduct is a trigger or springboard for making a sale, even if the erroneous conclusion is rectified beforehand, it will be misleading or deceptive”.

256    In any case, as I mentioned earlier, not all members of the relevant class will actually have been to an IN-N-OUT restaurant or pop-up. Some may have visited the website and would have seen the hallmark trade dress there. But a not insignificant number will merely have read about IN-N-OUT in a magazine or newspaper or online, or have heard of it through word of mouth. Hardly any of the articles tendered by the applicant feature the distinctive branding features. For those people, the differences used in the get-up of the respective restaurants or pop-ups would not remove the chance of deception brought about by the similarities in the names and logos.

257    It is convenient at this point to consider the significance of the decision in TGI Friday’s.

258    TGI Friday’s relevantly concerned an action under s 52 of the TPA brought by two American companies — Friday’s Inc and its subsidiary, TGI Friday’s Minnesota Inc — against two Australian companies — Friday’s Australia Pty Ltd and an associated company — over the use of the trade mark TGI FRIDAY’S in connection with the supply of restaurant and/or alcoholic bar services. Friday’s Inc operated a chain of restaurants in the United States and 29 in other countries. The chain operated under the name “TGI Friday’s”. “TGIF” is a well-known acronym for “Thank God It’s Friday”.

259    Each restaurant displayed the sign “TGI Friday’s” in a distinctive script. Customer service was standardised across the American chain. In August 1995 TGI Friday's entered into a franchise agreement with an Australian company, unrelated to Friday’s Australia and its associate, which opened a restaurant in Melbourne under the TGI Friday’s name in October 2005 and a second restaurant under the same name in January 2007. Friday’s Australia and its associate carried on businesses in the outer western suburbs of Sydney in a tavern and a hotel/motel. Friday’s Australia was the owner of the registered Australian trade mark and the business name tgi friday’s.

260    The primary judge found that the man behind Friday’s Australia “set out to pirate the name TGI Friday’s for use in connection with premises licensed to sell liquor” and that his conduct “manifested his obvious recognition of a commercial advantage attaching to association with the name of the restaurants in the [American] chain”, which provided a reliable and expert opinion both as to reputation and the likely consequences of the respondent’s conduct. He was satisfied that the TGI restaurants had acquired “a not insignificant” reputation in Australia. He had no difficulty in concluding that, “in hoisting its signs with the TGI Friday’s name in the colours of the applicant’s logo”, Friday’s Australia and its associate “blatantly” contravened s 52 of the TPA. He held that the public was likely to believe that the services they offered were those of the American company or one of its franchisees.

261    But his Honour’s judgment was set aside on appeal. Wilcox, Kiefel and Emmett JJ held at [27]–[28]:

The respondents to the present appeal do not claim the name TGI Friday’s was invented by them or is inherently descriptive of their business. Nor is the use of the name peculiar to them. The evidence establishes that the full name or some recognisable corruption of it is used by a wide range of Australian businesses offering relaxation and refreshment. The respondents' case, whether under the Trade Practices Act or the law of passing off, depends on the argument that, by April 1996, they had acquired a reputation in the use of that name in connection with restaurants, they having operated restaurants under that name in many countries, including in Australia from October 1995. However, as Mr Wing made clear, this use was always associated with a particular “distinctive layout” and type of decor. The photographs bear out this claim. They show Friday’s Inc restaurants in many countries. Although there are some differences in get up, there is a consistency of style. For example, the name TGI Friday’s is invariably shown in block capitals, with the letters TGI being smaller than those used in the word Friday’s. With only a couple of exceptions, the outside of the building is adorned with a red and white diagonal striped awning. The combination of these elements makes the outside of the restaurants, wherever situated, instantly recognisable to anyone who has ever patronised one of them, as no doubt the respondents intended. And when one gets inside, there are the peculiarities of decor mentioned by Mr Wing. In his words, the elements of the decor combine to present “a visual package that is unique to TGI Friday’s”.

The contrast with the appellants’ use of the name could hardly be more stark. At neither Raby nor Penrith is the name used to denote the establishment itself, but merely a bar in a hotel; in both cases a very ordinary bar in a very ordinary suburban hotel, albeit one in which light meals are available. Secondly, in every case the appellants put Friday’s or Friday in cursive script. The lettering is quite unlike that used by Friday’s Inc. The appellants have no equivalent of Friday’s Inc’s red and white awning. Their internal décor bears no resemblance to that described by Mr Wing. These differences would be so obvious to any intending patron of the appellants’ hotels who knew of Friday’s Inc’s restaurants that he or she would immediately assume the hotel’s use of the name to be coincidental; the differences proclaim disassociation.

262    There are obvious parallels with the present case, but there are also differences. One obvious difference is that, in Australia, the applicant had operated pop-ups in bars. In TGI Friday’s there was no such evidence. Another is that, in TGI Friday’s, the evidence established that TGIF was not a distinctive name and a range of Australian businesses used it. Here, however, there was no evidence to indicate that “IN-N-OUT”, “N-OUT” or “N’OUT” was used by any Australian business before Messrs Kagan and Saliba adopted the “DOWN-N-OUT” name or, indeed, at any later time. In TGI Friday’s the Court also noted the significant differences between the fonts used by the respective companies in their signs. Here, at least for some period of time, the fonts used in the DNO signs were very similar to those used in the applicant’s signs. It is trite to observe that each case turns on its own facts.

263    Taking into account the deliberate appropriation by Messrs Kagan and Saliba of significant components of the INO marks, the intentional substitution of “DOWN” for “IN” to evoke an association with Australia, the similarities in the names, particularly through the common use of “–N-Out”, the common use to which the names were put (to describe burgers and burger restaurants), the manner in which the colours were used in the respective signs, the applicant’s reputation, its history of popping-up in Australia in various places, and the dearth of evidence concerning the respondents’ reputation, I am persuaded that this is not a case of conduct likely to cause mere confusion. Rather, having regard to all the relevant circumstances, I am satisfied that the conduct of Messrs Kagan and Saliba at the Sir John Young Hotel was misleading or deceptive or likely to mislead or deceive a not insignificant number of members of the relevant class of consumer into thinking that there was an association of some kind between the applicant and the people behind DOWN-N-OUT (Messrs Kagan and Saliba), such as a franchise or licence arrangement, although most consumers are unlikely to have given much, if any, thought to the nature of the association. The prospect of deception was heightened by the incorporation of the bent yellow arrow in the Down-N-Out signs. Although the arrows were removed from the internal signs, the external signs were not altered, despite the acknowledgment by Mr Saliba that the “yellow arrow definitely needed to go”. Both the differences in the get-up and the removal of the arrows from the signs in the interior of the restaurant are of no consequence since, by the time the interior signs were visible, the potential for deception had already arisen.

Category 2: incremental changes at the Sir John Young Hotel (August/September 2016 to July 2018)

264    This category encompassed the conduct illustrated in the following images:

265    The applicant also relied on the sign below, which the evidence indicates was placed on the ground outside the hotel entrance during the period from at least 30 May 2018 until 9 July 2018:

266    In addition, the applicant relied on the following sign hanging outside the restaurant:

267    Finally, the applicant relied on the use of the sign “DOWN N’ OUT” on the respondents’ menus:

268    The applicant drew attention to the following matters:

(1)    the incremental changes to the branding were limited to the use of logos that substituted a hashtag for the O in “DOWN” in the DNO logos;

(2)    the continued use of the same red and yellow in the DNO logo;

(3)    the use for part of the period of D#WN N’OUT red and yellow neon signs;

(4)    the use of neon signs when the applicant used in-store neon signs in their dining rooms in the United States; and

(5)    the continued offering of a “secret menu”.

269    The applicant also submitted that the respondents took no steps to correct the earlier representations. They claimed that this gives rise to a hangover effect, noting the observations made by Burchett J in Duracell Australia Pty Limited v Union Carbide Australia Limited (1988) 14 IPR 293 at 299, a case of misleading advertising, that “a change so subtly shaded might well escape the attention of a [potential customer] already imbued with the existing message” and that “[t]he impression originally gained might be reinforced by the repetition of a closely similar message, not corrected”.

270    I do not consider the use by the respondents of neon signs to be of significance. Neon signs are commonplace. The applicant pointed to evidence from Mr Warnick that the “Quality you can taste” sign used in the Australian pop-up events seeks to simulate the in-store neon signs used in the applicant’s US dining rooms. That may well be so, but this evidence does not suggest that the mere fact that the DNO logo appears on a neon sign is misleading or deceptive or likely to mislead or deceive in the manner alleged. Furthermore, the continued use of the “secret menu” is neither here nor there as there is nothing to indicate that the expression was used outside the restaurant.

271    For the reasons given above, however, the use of the hashtag in lieu of the “O” in “Down” makes no material difference to the impression created by the use of the name DNO name. The only significant differences during this period are the use of cartoon hamburgers and the presence of what I gather is a representation of the Pokémon character, Pikachu, outside the restaurant on the day the photograph was taken (30 August 2016, according to the agreed facts).

272    The respondents made no submissions about the significance of the Pokémon character. Rather, they again emphasised the differences in appearance between the applicant’s permanent restaurants and the streetscape approaching their pop-up in the Sir John Young Hotel. For the reasons given above (at [243]-[244]), this is a false dichotomy. The respondents also repeated their submissions about the allegedly significant points of difference between the parties’ name, the allegedly different impression or message created by the respective marks, and the differences created by the appearance of the interior of the DNO pop-up. As I have already observed, neither the substitution of the hashtag for the “O” or the incorporation of an apostrophe after the conjunctional “N” in the respondents’ signs is of any consequence. Since I have found the DNO name to be misleading or deceptive or likely to mislead or deceive, the differences in the interiors of the respective venues are not material.

273    The respondents did not address the applicant’s point about a potential hangover effect.

274    Despite the potential for a hangover effect, if there had been evidence of the extent, if any, of the reputation of Hashtag Burgers in Australia and its association with Pokémon characters and cartoons of hamburgers and if there was evidence that the Pokémon character was always present outside the respondents’ premises, I might well have concluded that the presence of such a figure was significant. In the absence of such evidence, however, I am unable to come to such a conclusion.

275    It follows that during this period the conduct of Messrs Kagan and Saliba in connection with the premises they occupied at the Sir John Young hotel continued to be misleading or deceptive or likely to mislead or deceive and that, from 23 June 2017, the conduct of Hashtag Burgers was misleading or likely to mislead or deceive because there is a real chance that a not insignificant number of ordinary or reasonable members of the relevant class of consumer would have been led to the erroneous belief that the respondents had an association with the applicant.

Category 3: Penrith, Ryde, Wollongong, and Crows Nest

276    The applicant argued that the conduct in this category was essentially the same as that which is captured by category 2, save that, apart from the Penrith restaurant, all the venues were permanent restaurants, rather than pop-ups, and the colour scheme used in the signs was red and white on a black background or with a black outline, rather than red and yellow. The applicant submitted that the use of red and white in preference to red and yellow does not assist the respondents since the evidence demonstrates that red and white are extensively used by the applicant in both its US restaurants and its Australian pop-ups. It also submitted that the interior of the restaurants looks like the interior of any restaurant in which the applicant could pop up and that the incremental changes are not sufficient. It maintained that there remains “a hangover effect”.

277    A number of photographs of the relevant DNO restaurants were in evidence. They were of variable quality.

278    I accept the applicant’s submission that the interior of the Penrith pop-up could resemble the interior of any restaurant in which the applicant could pop-up. On the other hand, when the applicant pops up in a restaurant, it has always been careful to stamp the premises with its logos and trade dress. None of the photographs of the Penrith pop-up is marked by a similar trade dress as the IN-N-OUT pop-up. Be that as it may, the difficulty remains that the name given to the restaurant, which appears on the sign beckoning members of the public to enter the premises, was misleading or deceptive or likely to mislead or deceive and, for the reasons given above, any different impression created by the interior appearance does not cure the problem.

279    There are marked differences between the exterior appearance of the Ryde restaurant and the exteriors of most of the applicants’ restaurants depicted in the photographs tendered in evidence. For a start, the Ryde restaurant has a glass street frontage. Further, because of the glass frontage, it is possible that the interior of the restaurant is visible from the street. But the photographs are not good enough to enable me to be satisfied that it is or even to indicate what could be seen if it were. Of course, the respondents could have called evidence about this, but they did not. In any case, as I observed above, a not insignificant number of potential customers would not be familiar with the applicant’s trade dress so that the prospect of a misconception brought about by the similarities in the names when used in conjunction with burger restaurants would not be dispelled by differences in get-up, taking into account the reputation of the applicant and the lack of evidence concerning the reputation of Hashtag Burgers.

280    No photograph of the exterior of the Crows Nest restaurant was annexed to the applicant’s submissions and none was drawn to my attention — by either side. It seems that no such photograph was tendered. The same is true of the Wollongong restaurant, except that in this case there is a photograph of a sign featuring a D#WN N’ OUT logo beside which the words “Infamous Burgers” appears in upper case letters. Moreover, no witness described the exterior appearance of the Wollongong or Crows Nest restaurant.

281    One photograph of the bar at the Crows Nest restaurant was exhibited to Ms Latreille’s affidavit. That displays none of the applicant’s trade dress or anything like it. For the reasons given earlier, however, for a not insignificant number of people in the relevant class that would not dispel the misleading impression created by the use of the DOWN N’ OUT name.

282    Further, for the reasons given earlier, the replacement of the “O” by a hashtag is of no moment. While the absence of an arrow removes one point of similarity, the similarities in the name remain. There is a real chance that that name would suggest to a not insignificant number of people in the relevant class an association of some kind between the applicant and the respondents.

Category 4: relocated CBD restaurant

283    This category encompassed the conduct illustrated by a number of images taken from a video made by Ms Latreille on a visit to the restaurant on 24 June 2019. Entrance to the restaurant is via a doorway over which a neon sign appears with the name “D#WN N’OUT” and up a set of stairs. On the footpath outside the premises is another sign which reads” D#WN N’OUT” under which is a red arrow directing people upstairs to the restaurant. The interior is very different in appearance from any IN-N-OUT restaurant, including any of its pop-ups. But it is not visible from the street. Just inside the doorway, on the day the video was taken, some posters and a blackboard menu can be seen. None of what is depicted in the video resembles an IN-N-OUT restaurant. Apart from the name, there is no apparent prospect of deception.