Federal Court of Australia

A Nelson & Co Limited v Martin & Pleasance Pty Ltd [2021] FCA 228

ORDERS

THE COURT ORDERS THAT:

1.    Martin & Pleasance Wholesale Pty Ltd be joined as the Third Respondent.

2.    Upon the Applicants by their counsel giving the usual undertaking as to damages in accordance with Practice Note GPN-UNDR, the Respondents, by themselves, their servants and agents and associates:

(a)    be restrained from marketing, promoting and/or supplying products (or offering to supply products) or participating in any such marketing, promotion or supply:

(i)    using the word “RestQ”; and/or

(ii)    using the packaging the subject of the photograph comprising annexure B to the Statement of Claim filed on 2 March 2021 (“RestQ Packaging”); and

(b)    the First and/or Third Respondent to deactivate the Facebook account with the handle RestQMP, the Instagram account with the handle RestQ_MP and remove the website www.restqcalm.com.au within 24 hours of the making of this order.

3.    The Applicants’ costs of the Interlocutory Application be their costs in the cause.

4.    The proceeding is listed before the docket Judge for case management hearing 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

FLICK J:

1    On 2 March 2021 the Applicants in the present proceeding filed in this Court an Originating Application and a Statement of Claim. The First and Second Applicants were named as A Nelson & Co Limited (“Nelson”) and Bach Flower Remedies Limited (“Bach”). The Respondents were named as Martin & Pleasance Pty Ltd (“Martin & Pleasance”) and Aloe Vera Industries Pty Ltd (“Aloe Vera”). A Third Respondent, namely Martin & Pleasance Wholesale Pty Ltd, was later also added and an order made to that effect.

2    In very summary form, Nelson sells a range of natural healthcare products under the trade marks “Rescue” and “Rescue Sleep”. Bach is a wholly owned subsidiary of Nelson and the registered owner in Australia of the “Rescue”, “Rescue Sleep” and “Bach” trade marks.

3    Between September 2020 and October 2020 Aloe Vera has sought registration of the trade mark “RESTQ” and a mark including the words “REST Q CALM FORMULA MARTIN & PLEASANCE SINCE 1855 TRADITIONALLY USED TO RELIEVE SYMPTOMS OF STRESS AND MILD ANXIETY DR BACH ORIGINAL FLOWER REMEDIES REST & QUIET”.

4    The conduct the subject of the litigation arises out of steps taken by the Respondents to market, as from February 2021, products bearing the “RESTQ” mark.

5    The Applicants in their Statement of Claim allege that the conduct of the Respondents constitutes (inter alia):

    an infringement of their own trade mark; and

    a passing off by the Respondents of their products as those of the Applicants.

The Applicants further claim that the conduct of the Respondents:

    falls within s 18 and/or s 29(1)(a),(g) and (h) of the Australian Consumer Law.

Other claims for relief can presently be left to one side.

6    Of present concern is an application for interlocutory relief. It comes before the Court as a duty matter and in advance of the proceeding having been docketed to the Judge who will ultimately assume responsibility for the future conduct of the proceeding.

7    The form of interlocutory relief as first formulated in the Originating Application has since been refined. The Applicants now seek interlocutory relief in the following form:

1.     Martin & Pleasance Wholesale Pty Ltd be joined as the Third Respondent.

2.    Upon the Applicants by their counsel giving the usual undertaking as to damages in accordance with Practice Note GPN-UNDR, the Respondents, by themselves, their servant and agents and associates:

(a)    be restrained from marketing, promoting and/or supplying products (or offering to supply products) or participating in any such marketing, promotion or supply:

(i)    using the word “RestQ”; and/or

(ii)    using the packaging the subject of the photograph comprising annexure B to the Statement of Claim filed 2 March 2021 (RestQ Packaging); and

(b)    the First and/or Third Respondent to deactivate the Facebook account with the handle RestQMP, the Instagram account with the handle RestQ_MP and remove the website www.restqcalm.com.au within 24 hours of the making of this order.

3.    The Respondents each serve an affidavit from a director or authorised officer identifying:

(a)    each recipient of marketing or promotional material using the word “RestQ” or depicting the RestQ Packaging; and

(b)    each person to whom RestQ Products have been supplied or offered,

including contact information for each recipient, and, in the case of (b), the quantity of any RestQ Products supplied, and the date of supply.

4.    The Respondents pay the Applicants’ costs of the application for interlocutory relief.

5.    List the proceeding for a case management conference on [ ].

8    In resisting that claim, the Respondents maintain that:

    the Applicants have failed to establish any prima facie case for relief, be that relief founded upon an asserted infringement of their trade marks; passing off or any contravention of the Australian Consumer Law.

Even if such a prima case for relief were to be made out, which the Respondents deny, the Respondents further maintain that:

    the balance of convenience lies strongly in favour of refusing interlocutory relief; and

    the award of damages is an adequate remedy.

In part, the Respondents maintain that:

    the application for interlocutory relief is properly to be characterised as an application for final relief because any interlocutory relief would, as a practical matter, compel the Respondents to rebrand their products; and that

    the effect any interlocutory order would have upon the public interest and the interests of third parties strongly favours the refusal of relief.

9    For present purposes it is concluded that:

    irrespective of how the infringement of trade mark claims are to be finally resolved, a prima facie case has been made out as to the Respondents passing their products off as those of the Applicants and/or that the conduct of the Respondents will likely mislead or deceive consumers;

    the balance of convenience lies in favour of granting relief; and that

    the award of damages is not an adequate remedy.

Given the time constraints, it is possible only to set forth brief reasons for reaching these conclusions.

10    The grant of interlocutory relief, it should be expressly acknowledged, is only until further order of the Court. It remains a matter entirely within the discretion of the docket Judge to revisit the orders now to be made and, if the docket Judge sees fit, to either vacate or vary those orders in such manner as may seem appropriate.

A comparison of the products

11    Although the packaging of the products may vary slightly, one visual comparison of the products of the Applicants and the Respondents is as follows:

Another example which more clearly exposes the words under the Applicants’ labelling of “RESCUE SLEEP” is the following:

Trade marks, passing off and misleading & deceptive conduct

12    The three causes of action relied upon by the Applicants were an infringement of their trade marks, passing off and conduct which was said to be likely to mislead or deceive.

13    Given the imperative to make orders and provide reasons on the interlocutory application sooner rather than later, it is sufficient to merely outline some of the more relevant principles.

14    Insofar as an alleged infringement of trade marks is concerned, the starting point is to recognise that a “trade mark” is defined by s 17 of the Trade Marks Act 1995 (Cth) (“Trade Marks Act”) as being:

… 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.

Registration of a trade mark confers “exclusive rights”. Section 20(1) thus provides as follows:

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

(a)    to use the trade mark; and

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

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

The function of a trade mark is “to give an indication to the purchaser or possible purchaser as to the manufacture or quality of the goods — to give an indication to his eye of the trade source from which the goods come, or the trade hands through which they pass on their way to the market”: In Re Powell’s Trade-Mark [1893] 2 Ch 388 at 403-404 per Bowen LJ.

15    As noted by Burley J in Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd [2018] FCA 235 at [271], (2018) 354 ALR 353 at 417 (“Bohemia Crystal”), in E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15 at [43], (2010) 241 CLR 144 at 163 French CJ, Gummow, Crennan and Bell JJ approved the following statement of the Full Court in Coca-Cola Company v All-Fect Distributors Ltd [1999] FCA 1721, (1999) 96 FCR 107 (“Coca-Cola”):

Use “as a trade mark” is use of the mark as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods. … That is the concept embodied in the definition of “trade mark” in s 17 — a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else.

(citation omitted)

Justice Heydon agreed: [2010] HCA 15 at [87], (2010) 241 CLR 144 at 175. See also: Nature’s Blend Pt Ltd v Nestlé Australia Ltd [2010] FCAFC 117 at [19], (2010) 272 ALR 487 at 491 per Stone, Gordon and McKerracher JJ.

16    Infringement of a trade mark is addressed in s 120 of the Trade Marks Act. Secton 120(1) provides as follows:

When is a registered trade mark infringed?

(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.

The phrase “substantially identical” is not defined but its meaning is to be determined by its ordinary or usual meaning, namely that which is “in substance” the same or “essentially” the same: Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020 at [70], (1999) 93 FCR 365 at 387 per Branson J. Whether marks are “substantially identical” requires a side by side comparison and depends on the court’s own judgment: Shell Company of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 414. Windeyer J there observed:

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. “The identification of an essential feature depends”, it has been said, “partly on the Court’s own judgment and partly on the burden of the evidence that is placed before it”: de Cordova v. Vick Chemical Co [(1951) 68 R.P.C. 103, at p. 106]. Whether there is substantial identity is a question of fact: …

(some citations omitted)

In order to determine whether marks are “substantially identical”, they should thus be compared side by side with their similarities and differences noted: Coca-Cola [1999] FCA 1721 at [38], (1999) 96 FCR at 121 per Black CJ, Sundberg and Finkelstein JJ. By way of contrast, whether a mark is “deceptively similar” is not to be determined by a side by side comparison, but rather by reference to whether there is a likelihood of deception or confusion from a recollection or impression of the registered mark: Anheuser-Busch Inc v Budejovicky Budvar [2002] FCA 390 at [143], (2002) 56 IPR 182 at 216. Allsop J (as the Chief Justice then was) there observed:

[143]    The question of deceptive similarity must be judged by a comparison different from the side by side comparison undertaken to assess substantial identity; the question being the likelihood of deception or confusion from a recollection or impression of the registered mark. Thus, a side by side comparison is inadequate, and too narrow a test. The comparison is between, on the one hand, the impression based on recollection of the registered mark used in a normal or fair manner that persons of ordinary intelligence and memory would have, and, on the other hand, the impressions that such persons would get from the impugned mark as it appears in the use complained of: …

(citations omitted)

17    Section 122 of the Trade Marks Act should also be noted. Section 122(1)(b) provides as follows:

When is a trade mark not infringed?

(1)    In spite of section 120, a person does not infringe a registered trade mark when:

…

(b)    the person uses a sign in good faith to indicate:

(i)    the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

     (ii)    the time of production of goods or of the rendering of services; or

…

In Bohemia Crystal at [293], Burley J observed that the “purpose of subsection 122(1) is to protect the fundamental right of a trader to honestly describe his or her product” and “to provide a ‘second-line’ mechanism to preserve the freedom of traders to use descriptive terms”. His Honour went on to further observe (at 421 to 422) (without alteration):

[295]    The policy underlying subsection 122(1)(b)(i) may be seen to lie in a consistent aim in trade marks legislation to ensure that traders may continue to use language in respect of their goods or services insofar as it represents the normal usage of the English language. …

…

[297]    Turning to the “good faith” requirement, in Johnson & Johnson, at 354 Gummow J (Lockhart J agreeing at 341) noted that the concept of use in good faith in S 64(1) of the 1955 Act addressed the essential concern that the use be honest, and considered the test approved by Romer LJ in Baume & Co Ltd v Moore (A H) Ltd [1958] Ch 907; [1958] 2 All ER 133 at 123; [1958] RPC 226 at 235 under s 8 of the United Kingdom Trade Marks Act 1938 which required (emphasis added):

the honest use by the person of his own name without any intention to deceive anybody and without any intention to make use of the goodwill which has been acquired by another trader.

[298]    His Honour noted that this approach has also been adopted where there was claimed to be a descriptive use of a trade mark under s 64 of the 1955 Act in James Watt Constructions Pty Ltd v Circle-E Pty Ltd [1970] 3 NSWR 481 at 493, and went on to apply it as a means of considering whether there was good faith use in Johnson & Johnson (at FCR 355–6; ALR 731; IPR 32–3) in respect of the descriptive use of the word “caplets.

[299]    The same concept of good faith use has been applied by Sundberg J in relation to subs 122(1)(b)(i) of the TM Act in the context of the descriptive use of “luscious lips” in Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCA 198; (2010) 86 IPR 1 at [42], where his Honour said that to rely on the defence the respondent must show it acted honestly and without any ulterior motive.

18    If attention is shifted to the tort of passing-off, the essence of the tort is the protection of a plaintiff’s goodwill attaching to a business or commercial venture. In Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12 at [108], (2000) 202 CLR 45 at 88, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ thus observed that “… passing-off, at least so far as concerns equitable relief, protects against injury to the goodwill built up by the activities of the plaintiff”. It is not concerned with an invasion of privacy: 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 79 ALR 299 at 317 per Gummow J. The tort provides a remedy for the invasion of a right of property in the business or goodwill likely to be injured by misrepresentations made by the passing off of one person’s goods as those of another: Star Industrial Company Ltd v Yap Kwee Kor trading as New Star Industrial Company (Singapore) (1976) 1B IPR 582 at 592 per Diplock LJ; Pacific Publications Pty Ltd v Next Publishing Pty Ltd [2005] FCA 625 at [25], (2005) 222 ALR 127 at 135 per Tamberlin J. It is not a remedy for the invasion of a right of property in a mark, name or get-up which has been improperly used. Nor is it, unlike s 52 of the former Trade Practices Act 1974 (Cth) or ss 18 and 29 of the Australian Consumer Law, designed to protect consumers.

19    The precise definition of the elements of the cause of action, however, remain somewhat elusive: ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 355 per Gummow J (“ConAgra”); Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 268 per Gummow, French and Hill JJ. But, for present purposes, those elements were summarised as follows in Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731 at 742 by Diplock LJ:

My Lords, A. G. Spalding & Bros. v. A. W. Gamage Ltd., 84 L.J.Ch. 449 and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so.

His Lordship continued:

In seeking to formulate general propositions of English law, however, one must be particularly careful to beware of the logical fallacy of the undistributed middle. It does not follow that because all passing off actions can be shown to present these characteristics, all factual situations which present these characteristics give rise to a cause of action for passing off. True it is that their presence indicates what a moral code would censure as dishonest trading, based as it is upon deception of customers and consumers of a trader’s wares but in an economic system which has relied on competition to keep down prices and to improve products there may be practical reasons why it should have been the policy of the common law not to run the risk of hampering competition by providing civil remedies to every one competing in the market who has suffered damage to his business or goodwill in consequence of inaccurate statements of whatever kind that may be made by rival traders about their own wares. The market in which the action for passing off originated was no place for the mealy mouthed; advertisements are not on affidavit; exaggerated claims by a trader about the quality of his wares, assertions that they are better than those of his rivals even though he knows this to be untrue, have been permitted by the common law as venial “puffing” which gives no cause of action to a competitor even though he can show that he has suffered actual damage in his business as a result.

Lord Diplock’s statement as to the five “characteristics” of the cause of action for passing off has been adopted in Australia: Moorgate Tobacco Co Ltd v Philip Morris Ltd (No. 2) (1984) 156 CLR 414 at 443–444 per Deane J; ConAgra (1972) 33 FCR 302 at 308–309 per Lockhart J; Osgaig Pty Ltd v Ajisen (Melbourne) Pty Ltd [2004] FCA 1394 at [83]–[85], (2004) 213 ALR 153 at 167–168 per Weinberg J (“Osgaig”); Ward Group Pty Ltd v Brodie & Stone Plc [2005] FCA 471 at [29]–[30], (2005) 143 FCR 479 at 487 per Merkel J.

20    There is thus a need to establish goodwill or reputation attaching to the relevant goods in the mind of the purchasing public, misrepresentation and damage or a likelihood of damage: Betta Foods Australia Pty Ltd v Betta Fruit Bars Pty Ltd (1998) 41 IPR 347 at 356–357 per Goldberg J. The misrepresentation relied upon need only be likely to lead the public to believe that the goods are those of the plaintiff – proof of actual deception is not required: Osgaig [2004] FCA 1394 at [85], 213 ALR at 168 per Weinberg J. There need not, however, be any deliberate fraud or any intention on the part of a defendant to deceive: ConAgra (1992) 33 FCR at 344 per Lockhart J; Select Personnel Pty Ltd v Morgan & Banks Pty Ltd (1988) 12 IPR 167 at 170–171 per McLelland J. There is no requirement that a respondent has been fraudulent, malicious or negligent: R & C Products Pty Limited v S C Johnson & Sons Pty Limited (1993) 42 FCR 188 at 192 per Davies J. But the presence or lack of any conscious intent can be relevant as a matter of evidence in establishing whether there has been any unlawful passing off: Pacific Publications [2005] FCA 625 at [88], (2005) 222 ALR 127 at 148 per Tamberlin J.

21    Of relevance to both a case involving an alleged infringement of a trade mark and passing off is the prospect that a decision by a competitor to select a particular get-up of another product and borrowing aspects of the get up of that other product may, in some circumstances, be presumed to have the effect of appropriating part of the reputation of that other product. The application of the presumption is not restricted to circumstances in which the competitor is found to have been deliberately dishonest; the presumption illustrates a “broader rule”: Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd [2018] FCAFC 105, (2018) 264 FCR 422 (“Homart v Careline”). Murphy, Gleeson and Markovic JJ there addressed what they described as the “Intention findings” of the primary Judge as follows (at 444 to 445):

Intention findings

[94]    The relevant passage in [Australian Woollen Mills Ltd v FS Walton & Company Ltd (1937) 58 CLR 641] at 657 states:

[T]he examination made of the respondent’s motives and good faith seems to us to leave the question of infringement and passing off very much in the same position as it stood in without it. 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. Moreover, he can blame no one but himself, even if the conclusion be mistaken that his trade mark or the get-up of his goods will confuse and mislead the public. But the practical application of the principle may sometimes be attended with difficulty.

[95]    At [161] and [200], the primary judge referred to the following passage from the decision of Weinberg and Dowsett JJ in [Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 234 FCR 549], as an application of Australian Woollen Mills:

Without wishing to labour the point unduly, we again point out that where 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.

[96]    At [201], the primary judge said:

In the present case, I am satisfied that this was the intention of Homart. As noted in Red Bull at first instance (Conti J) at [64], the difference between the brand names is not necessarily decisive of an absence of the requisite intention. Nor, as I have noted above by reference to the Full Court decision in Peter Bodum, is the presence of a brand name determinative of an absence of misleading conduct. In the present case, in any action under s 18 of the ACL, one must look at the totality of conduct of the alleged deceiver.

[97]    We do not accept that the principle identified in Australian Woollen Mills is restricted in its application to cases of deliberately dishonest traders. In our view, that case illustrates the broader rule to the effect that a mark or get-up selected for the identified purpose should be presumed to be fitted for that purpose. There is no reason in principle why a finding of deliberate dishonesty is necessary for the application of that presumption. There is no reason to doubt the observation of Weinberg and Dowsett JJ in Red Bull (appeal) that the borrowing of aspects of a competitor’s get-up may give rise to an inference of the kind that their Honours identified.

22    Finally, the Applicants place reliance upon ss 18 and 29 of the Australian Consumer Law. That Law is in Sch 2 to the Competition and Consumer Act 2010 (Cth). Although the terms of s 18 of the Australian Consumer Law are well known, they bear repetition. Section 18(1) provides as follows:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

The other provision invoked by the Applicants, s 29(1)(a), (g) and (h) provide as follows:

29    False or misleading representations about goods or services

(1)    A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

(a)    make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or

…

(g)    make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or

(h)    make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or

…

23    Sections 18 and 29, it may be noted, are in substantially similar terms to ss 52 and 53 of the now-repealed Trade Practices Act 1974 (Cth).

24    As with the other causes of action of present relevance, it is unnecessary to canvas the applicable principles of relevance to ss 18 and 29 of the Australian Consumer Law. It was the application of those provisions and those principles which divided the parties on the present interlocutory application. But a few brief observations may be made.

25    First, ss 52 and 53, and now ss 18 and 29, are provisions designed to protect members of the public who are consumers of goods and services from unfair trading practices: Mark Foys Pty Ltd v TVSN (Pacific) Ltd [2000] FCA 1626 at [38], (2000) 104 FCR 61 at 72 per Beaumont, Tamberlin and Emmett JJ (citing Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 (“Hornsby Building Information Centre”)). They are not provisions specifically designed to protect traders, although the operation of those provisions may incidentally have that effect. As stated by Barwick CJ, with whom Aickin J agreed, in Hornsby Building Information Centre ((1978) 140 CLR at 220):

Section 52 is concerned with conduct which is deceptive of members of the public in their capacity as consumers of goods or services: it is not concerned merely with the protection of the reputation or goodwill of competitors in trade or commerce.

26    Second, in Domain Names Australia Pty Ltd v .au Domain Administration Ltd [2004] FCAFC 247, (2004) 139 FCR 215 (“Domain Names”), Wilcox, Heerey and RD Nicholson JJ outlined some of the matters to be proved and the manner of proof as follows (at 220):

[17]    It has long been established that

•    When the question is whether conduct has been likely to mislead or deceive it is unnecessary to prove anyone was actually misled or deceived: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 49 CLR 191 at 198.

•    Evidence of actual misleading or deception is admissible, and may be persuasive, but is not essential: Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 87.

•    The test is objective and the Court must determine the question for itself: Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202.Conduct is likely to mislead or deceive if that is a real or not remote possibility, regardless of whether it is less or more than 50%: Global Sportsman.

[18]    The likelihood of recipients of a representation being misled or deceived is not a matter to be proved by evidence (testimony, documents or things), or by judicial notice or its statutory equivalent…. The existence or otherwise of such a likelihood is a jury question for the trier of fact: …

(citation omitted)

27    Third, the statutory provisions nevertheless do not extend to circumstances in which people fail to take reasonable care of their own interests: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54, (2013) 250 CLR 640 at 651-652 (“TPG Internet”). French CJ, Crennan, Bell and Keane JJ there observed:

[39]    …Conduct is misleading or deceptive, or likely to mislead or deceive, if it has a tendency to lead into error. That is to say there must be a sufficient causal link between the conduct and error on the part of persons exposed to it. It is in that sense that it can be said that the prohibitions in ss 52 and 18 were not enacted for the benefit of people who failed to take reasonable care of their own interests.

(citation omitted)

See also: Mackinnon v Partnership of Larter [2019] NSWSC 1658 at [67] per Stevenson J.

28    Fourth, it is not necessary to prove an intention to mislead or deceive but proof of such an intention has a very strong evidentiary value: Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 394 per Gummow J. See also: Trani v Trani (No. 2) [2019] VSC 723 at [67], (2019) 349 FLR 261 at 277 per Forbes J.

29    Although there is an “overlap” between the tort of passing off and provisions such as those formerly found in the Trade Practices Act and now found in the Australian Consumer Law, both remedies address different concerns. In the context of the Trade Practices Act, in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2007] FCAFC 70, (2007) 159 FCR 397 at 418-419, Black CJ, Emmett and Middleton JJ thus observed:

[98]    There is an overlap between causes of action arising under Part V of the Trade Practices Act and the common law tort of passing off. However, the causes of action have distinct origins and the purposes and interests that both bodies of law primarily protect are contrasting. Passing off protects a right of property in business or goodwill whereas Part V is concerned with consumer protection. Part V is not restricted by common law principles relating to passing off and provides wider protection than passing off.

[99]    …. 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.

These observations were also applied, not surprisingly, in the context of the “analogues of ss 18, 29(1)(g) and(h)” of the Australian Consumer Law by Siopis, Rares and Katzmann JJ in Kosciuszko Thredbo Pty Ltd v TredbotNet Marketing Pty Ltd [2014] FCAFC 87 at [29], (2014) 223 FCR 517 at 524-525.

Infringement of the trade marks – good faith?

30    Although the grant of interlocutory relief has been founded upon a consideration of the causes of action founded upon the tort of passing off and for the conduct which falls within ss 18 and 29 of the Australian Consumer Law, it is (perhaps) prudent to address, in very summary form, the reasons why the reliance sought to be placed upon an asserted trade mark infringement has been placed to one side.

31    If it had been necessary to decide the point, it would most probably have been concluded that there was a serious question to be tried in respect to:

    whether the products of the Applicants and those of the Respondents were “substantially identical” or “deceptively similar” within the meaning of s 120(1) of the Trade Marks Act; and

subject to any defence of “good faith” (s 122(1)(b)):

    whether there had been an infringement of the Applicants’ marks.

The substantial identity of the two lines of products on a side by side comparison gives rise to much the same comparison as that undertaken when considering whether there has been a passing off of one product for that of another. So, too, would it most likely have been concluded that there was deceptive similarity between the two lines of products. And the same findings would have been reached in respect to the trade mark aspect of the case as those made in respect to similarities between the two lines of products as have been made for the purposes of the Applicants’ reliance on passing off.

32    The Respondents’ submission as to the phonetic difference between “Rescue” and “RestQ” would most likely have been rejected. A letter, such as the letter “T”, can of course make a difference: Pierre Fabre Dermo-Cosmetique v Senator Automation Pty Ltd [2007] FCA 1391 at [15]. Emmett J there relevantly concluded:

[15]    The Opponent also asserts aural similarity between the words “Avène” and “afene”. The Opponent suggests that the only difference is the substitution of the letter “f” for the letter “v” and the use of a grave accent. The Opponent suggests that the two words would, nevertheless, be pronounced similarly.

[16]    However, a consumer with any knowledge of French would pronounce “è” more or less in the same way as “air”. On the other hand the natural pronunciation of “afene” would be to pronounce the letter “e” in the same way as the middle “e” in the word “scene”. I do not consider that the natural pronunciation of the second vowel of the two words is similar, quite apart from the difference in the voiced and unvoiced fricatives “v” and “f”. I do not consider that any aural impression created by the Opponent’s Mark is such that aural use of either of Senator’s Marks is likely to deceive or cause confusion.

There, nevertheless, would have remained a concern as to whether people would have articulated the two words in a sufficiently clear manner as to avoid confusion. This concern remains notwithstanding the fact that the word “rescue” is obviously an ordinary English word, whereas the term “RestQ” is a made-up word which would have the potential to evoke different ideas to consumers. So, too, must care be taken to not place undue weight upon any aural comparison of terms but to also take into account their visual appearance, place and the context in which they are made available for sale: cf. Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 at 511 per Burchett J.

33    But all of these observations as to the substantial identity of the two lines of products or whether they are deceptively similar need not be further pursued.

34    The principal reason for placing reliance upon this cause of action to one side, however, emerges from a defence mounted by the Respondents founded upon s 122(1)(b) of the Trade Marks Act. The Respondents contend that any cause of action for infringement of the Applicants’ trade marks was a use of the trade mark in “good faith”.

35    It may be queried whether a Court should proceed to conclude that there was a serious issue to be tried in respect to the Applicants’ contention that the Respondents had infringed their marks for the purposes of s 120 without also forming some view as to the prospects of success – or whether there was a serious question to be tried – as to the defence under s 122(1)(b).

36    The evidence, at least in part, relied upon:

    the evidence of the Managing Director of Martin & Pleasance, Mr Richard Holyman; and

    the steps taken in late 2020 to obtain a “preliminary examination” as to whether the “RestQ” would meet the requirements for registration under the Trade Marks Act.

37    As to the former matter, Mr Holyman set forth in his affidavit the reasons why he settled upon the “RestQ” brand as follows:

Development of the RestQ brand, including packaging

64    From around October 2020, M&PW started work on the branding and packaging for the RestQ Products.

65    M&PW focused on the following key elements:

   (a)    the Martin & Pleasance business’ heritage extending back to 1855;

   (b)    a form of the “emotional wellness”, that is, experiencing rest and quiet; and

(c)    creating a bright and distinctive colour palette so that the RestQ Products would stand out.

66    The idea of the desired experience of “Rest and Quiet” led to my (and M&PW’s) decision to choose the brand name RestQ - RestQ and “Rest and Quiet” reflect the intended purpose of the RestQ Products, being that the consumer experiences rest and quiet. This decision was combined with the desire for bright and distinctive packaging, to create the dark blue and yellow RestQ logo on light blue packaging, shown below. The meaning of the brand name – “Rest and Quiet” - appears on all of the RestQ Products’ packaging, often on the top of the box and on the side of the pack immediately below the brand name as “REST + QUIET”. An example of the packaging for the RestQ Sleep Formula oral spray and the RestQ Calm Formula oral spray, with “REST + QUIET” displayed on the top and side of the box packaging under the RestQ logo, is shown below:

The affidavit thereafter set forth some depictions of the labelling settled upon and continued:

67    In selecting and subsequently using the brand RestQ, I did not believe that there was any possibility that a consumer could be confused into thinking that this meant that the RestQ Products were somehow affiliated with the Rescue Remedy Products, or that this would somehow result in the diversion of business from the Rescue Remedy Products to the RestQ Products. I believed that consumers would understand that the RestQ Products were competitors of the Rescue Remedy Products in the Bach flower remedy space. I continue to hold these beliefs.

38    As to the latter matter, Mr Holyman also set forth in his affidavit the steps taken to utilise “IP Australia’s TM Headtsart process, which provides a preliminary examination as to whether a particular trade mark is likely to be capable of registration”. On 23 September 2020, IP Australia provided an assessment “which stated that the results of the assessment ‘indicate that [the RestQ] trade mark would meet the requirements for registration under the Trade Marks Act 1995 (Cth)”. Registration was thereafter applied for and an objection was raised on 29 January 2021. The application for registration thus awaits a decision.

39    Unchallenged, such evidence would go a long way to making out a defence of “good faith” for the purposes of s 122(1)(b).

40    But, even on the present state of the evidence, there would be substantial reason to question Mr Holyman’s evidence. The present state of the evidence exposes a disturbing number of similarities between the “get up” of the Applicants’ products with the “get up” of the Respondents’ products. It could well be expected that at any final hearing Mr Holyman’s existing evidence would be the subject of challenge. Counsel for the Applicants has already during the course of the interlocutory hearing submitted that the Respondents’ conduct was, at the very least, “sailing close to the wind”.

41    One course open to the Court would be to proceed to reach a finding that there nevertheless remained a serious question to be tried in respect to trade mark infringement, notwithstanding the s 122(1)(b) defence. The course, however, which has been pursued is to place reliance upon the remaining causes of action. It has been considered preferable to proceed in that manner rather than make any finding or assessment on an interlocutory basis as to how good (or deficient) may be the s 122(1)(b) defence. If a finding were to be made, for example, that the s 122(1)(b) defence was not sufficiently sound as to answer a serious question of trade mark infringement, such a finding could expose Mr Holyman to unnecessary (and perhaps ill-founded) criticism. In the absence of other causes of action, it may have been necessary to make a finding. But, where there are remaining causes of action which do not so directly raise the good faith of Mr Holyman, the Applicants’ reliance on trade mark infringement has been left to one side.

42    It may be noted that a different course was pursued in Organic Marketing Australia Pty Ltd v Woolworths Ltd [2011] FCA 279. Katzmann J there referred to the good faith defence relied upon in that case but concluded:

[61]    Woolworths argued that the strength of such a defence undermines any prima facie case, pointing to the definitions of “honest” and “goodness” in the advertising. There was also evidence from Mr Dunkerley going to this issue. But at this point in the proceeding when Mr Dunkerley has not been cross-examined and all the evidence is not before me, I do not think that I should deny the applicants relief on the supposed strength of the foreshadowed defence.

Nor did the cross-claim in that case “militate against the grant of interlocutory relief”.

43    On the facts of the present case, Mr Holyman has not, of course, been cross-examined. But the evidence has been canvassed in sufficient detail to form a conclusion that his evidence would certainly not go unchallenged and that there is, at present, reason to question his evidence. Where there remain other causes of action which do not require such an immediate consideration of a person’s good faith and credit, and which provide a basis for the interlocutory relief sought, the more prudent course is to rely upon those other causes of action.

Passing off and misleading or deceptive conduct?

44    The bases upon which the present application for interlocutory relief has been resolved is by reference to the tort of passing off and the statutory prohibition against misleading or deceptive conduct.

45    In very summary form, and for the purposes of both causes of action, it is respectfully concluded that the Applicants have established a substantial goodwill in their products and that the “get up” of the Respondents’ products is so sufficiently similar as to cause in the mind of the consumer real confusion or the likelihood of real confusion as to whether they are the goods of the Applicants. There is considered to be a serious question to be tried as to whether the Respondents are passing off their own products as those of the Applicants and a serious question to be tried as to whether, in the manner in which the Respondents are presenting their goods for consumption, that the Respondents have engaged in conduct which (at least) creates a misleading and deceptive representation that its goods are those of the Applicants or are affiliated with the Applicants.

46    These conclusions remain, of course, a matter of judgment taking into account both the similarities of the two sources of product and their differences.

47    On the facts of the present case there are both similarities and differences.

48    The manner in which the two lines of products of the Applicants and the Respondents have similarities such as to attract the conclusions as to passing off and misleading or deceptive representations include:

    the wording on the two lines of products – the Applicants’ bearing the name “Rescue” and those of the Respondents bearing the name “RestQ”. Although the former is an ordinary word and the latter is a made up word, there is a serious question to be tried as to whether in the mind of the consumer (or in questions being asked of retailers) that there is such a sufficient difference as to separate the origins of the two lines of products; and

    the fact that on some of the Applicants’ products, but not all, there are the words “Traditionally used to relieve sleeplessness”, whereas on the Respondents’ products the comparable words are “Traditionally used to calm the mind & relieve sleeplessness”.

To a lesser extent, other similarities include:

    the fact that on both lines of products there appears the reference to the person who developed the original ingredients, Dr Bach – on the Applicants’ products the name “Bach” is in a more florid style with a line underneath whereas on the Respondents’ products the reference appears in an embossed imprint;

    the fact that (at least for that line of products being marketed spray bottles) both products have a depiction of a spray bottle at the bottom of the front of the packaging, and on the Applicants’ product the words “SPRAY 20mL Oral liquid” and on the Respondents’ the words “25 mL ORAL SPRAY”; and

    the fact that the Applicants’ products appear in yellow packaging whereas the Respondents’ products appear in blue packaging, albeit with the “Q” in “RestQ” appearing a similar shade of yellow to that of the Applicants’ products, and the fact that both lines of products use the colours yellow and blue, albeit in a very different manner.

49    The manner in which the two lines of products are dissimilar to each other include:

    the fact that the predominant colour on the two lines of products is different – the Applicants’ products being primarily in a yellow package, whereas the Respondents’ is primarily blue;

    the fact that the Respondents’ packaging includes on its face the reference to “Martin & Pleasance” and the company’s logo; and

    the fact that there is a price differential between the two lines of products, that assuming significance to the extent that consumers are “price conscious”.

Again, and to a lesser extent, the dissimilarities include:

    the fact that the Respondents’ packaging includes on the side panel to the package and on its lid, the words “Rest + Quiet”;

    the fact that on the side panel of the package, the Respondents’ products contain the words “Alcohol Free”; and

    the fact that the volume of active ingredients in each line of products is different – the Applicants’ “Sleep Spray” (for example) being in a 20ml container whereas the Respondents’ product is in a 25ml container.

50    It is stating the obvious to note that Counsel for the Applicants sought to emphasise the similarities whereas Counsel for the Respondents sought to “down play” those similarities and to emphasise the manner in which the products were different.

51    Although different minds could reach different conclusions, it is respectfully concluded, for the purposes of the interlocutory application, that there remains a serious question to be tried as to whether the Respondents are passing off their products as those of the Applicants and/or doing so in a manner which is likely to mislead or deceive. The reaching of that conclusion is one founded upon the objective facts presented and it is unnecessary to make any finding as to whether any consumer was in fact misled or deceived: cf. Domain Names [2004] FCAFC 247 at [17], (2004) 139 FCR at 220. It is also a conclusion reached notwithstanding the Respondents’ evidence as to the manner in which consumers are careful in the selection of products such as those now in issue: cf. TPG Internet [2013] HCA 54 at [39], (2013) 250 CLR at 651-652.

52    Moreover, and for the purposes of both the infringement of the trade mark case and (at least) the passing off case, a finding may be open that Mr Holyman “borrowed a number of aspects” of the Applicants’ get up of their products. Irrespective of any finding as to whether he deliberately intended to do so, an inference may be open that consumers may have been confused as to whether they were purchasing the Applicants’ products or products affiliated with those of the Applicants: cf. Homart v Careline [2018] FCAFC 105 at [94] to [97], (2018) 264 FCR at 444 to 445. The “aspects” of the Applicants’ get up of their own products which could arguably have been “borrowed” by Mr Holyman would be those “aspects” in respect to which the two lines of products have similarities. Whether or not there is, on the facts of the present case, a sufficient basis upon which any “presumption” or “inference” could operate has nevertheless been placed to one side. And, it would not assume much relevance for the purposes of the passing off claim or that founded upon the Australian Consumer Law, to make a finding as to whether there was any intention on the part of the Respondents to pass their own goods off as those of the Applicants or to make misleading or deceptive comments.

53    To the extent that some authorities seek to characterise the serious questions to be tried as “weak” as opposed to “strong”, if it were necessary to make such a characterisation, it is considered that the Applicants have certainly made out a prima facie case and made out a persuasive case as against the Respondents – albeit on an interlocutory basis.

The balance of convenience

54    Counsel for the Respondents resisted the conclusion that there was a serious question to be tried but further submitted that – if there was such a serious question – the balance of convenience was in favour of refusing interlocutory relief. Counsel for the Applicants submitted to the contrary.

55    At a very superficial level, but at an important level, the facts fell in favour of the Applicant by reason of the fact that:

    it had been in the homeopathic market for some time, having held (for example) exclusive rights to the supply of the ingredients the subject of the “RESCUE” products since late 1993; and

    it had established a reputation and goodwill in that market.

By way of contrast, the Respondents:

    had only entered the market in mid-February 2021; and

    had a less well-established market presence, albeit a presence which was growing at some pace.

56    Below that level of analysis, however, Counsel for the Respondents relied upon a number of further factors. The touch-stone to which he repeatedly returned was that the purpose of an interlocutory injunction to only make such orders as to create “the least risk of injustice”: Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 536 per McLelland J. Each of the factors relied upon should be briefly addressed, albeit not necessarily in the same order as set forth in the written Outline of Submissions.

57    First, on behalf of the Respondents it was urged that they were already in the market place and that that was the status quo with which the Court should not interfere. The status quo, so it was submitted, was that the Respondents were in the market place and had been for some three weeks and had in excess of 1,000 stores which were stocking its product. The argument, with respect, is less than persuasive. Given the finding that there is a serious question to be tried as to whether the Respondents were passing off their products as those of the Applicants or were engaging in conduct that was misleading or likely to mislead or deceive consumers, it is less than persuasive to submit that their existing market position was the status quo and that that position should be protected – indeed, bolstered in the event that interlocutory relief is refused. The status quo, with respect, was the state of the market prior to the Respondents very recent entry into it.

58    Second, the Respondents maintain that any interlocutory relief – assuming such relief extends up to the substantive hearing of the Applicants’ proceedings – would cause irreparable harm. The Respondents, so the argument runs, would be forced to rebrand their products with consequential loss being incurred by reason of the costs of re-branding and loss incurred by reason of an inability to sell their remaining stock. To grant interlocutory relief, so the submission culminates, would be tantamount to final relief: Collins House Pty Ltd v Golden Age Sunrise Development Pty Ltd [2015] FCA 724 at [105], (2015) 114 IPR 1 at 26. Mortimer J there observed:

[105]    The third matter is, as the applicants’ counsel properly recognised, that the applicants essentially seek final relief on this application. Once it is necessary for the respondents to rebrand the entire development, the objections of the applicants dissolve. That being the case, the principles set out in [Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238; 286 ALR 257; [2011] FCAFC 156] are applicable, and the applicants have failed to meet those thresholds of persuasion.

In Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156, (2011) 217 FCR 238 an appeal was allowed by Dowsett, Foster and Yates JJ in circumstances where it was concluded that there had been a failure at first instance to assess the strength of the Respondents’ case and that there was a “real and substantial” prospect that the claim would not succeed.

59    On the facts of the present case, there are some uncertainties that surround the second of the arguments presently being relied upon. It is, for example, unknown whether the docket Judge would be able to accommodate an expedited final hearing which, to some extent, would alleviate the present concern of the Respondents. Nor it is known whether any expedited hearing would be appropriate, taking into account the uncertainty as to legal and factual issues that could arise. Nor is it known with certainty whether the Respondents would in fact opt to re-brand their products. But the submission has been made and it is to be assumed that that remains a real prospect. However these uncertainties may be resolved, the fact remains that the Respondents are correct to urge upon the Court the harm that the Respondents would suffer if interlocutory relief is granted.

60    Third, any interlocutory relief would place the Respondents in the position that they would be unable (at least for a period of time) to meet and satisfy future orders by retailers to re-stock their products. The frequency with which retailers place further orders and re-stock varies. Again, that is a factor to be taken into account. So, too, should be taken into account the fact that:

    there is the potential for reputational damage to the Respondents and their products;

    the Respondents’ relationships with its distributors may be prejudicially affected;

    the perception of customers as to the RestQ products may be prejudicially affected;

    the Respondents will suffer loss of profits and revenue, including a substantial loss by the potential for existing stock to be no longer suitable for possible future distribution given the “shelf-life” of the products.

The fact that some consumers who presently purchase RestQ products may shift to the Applicants’ products is of itself a risk but remains far from persuasive.

61    The loss and prejudice to a party against whom interlocutory relief cannot be ignored; it is obviously a matter that has to be seriously taken into account when assessing where the balance of convenience truly lies: e.g., Boyd v Wild Hibiscus Flow Company Pty Ltd (No 2) [2012] FCA 74. With reference to the facts of that case, Foster J there concluded in part as follows:

[67]    That material demonstrates quite clearly that there would be serious prejudice to the respondents if an injunction is granted.

[68]    The applicants submitted that the prejudice was insignificant. However, I do not agree. The disruption to the marketing and sale of the respondents’ product and the cost that would be visited upon the respondents in order to meet the requirements of any injunction are considerable and cannot be ignored. …

Those observations were obviously fact-dependent upon the evidence before his Honour. But, to the extent that his Honour was reaffirming the need to also take into account the circumstances of a respondent, those comments are sound. Again by reference to the facts of that case, it is nevertheless instructive to also consider his Honours’ immediately succeeding comments, namely:

[68]    … The applicants sat on their hands from early October 2011 until 5 January 2012 during which time the respondents spent considerable time, effort and money promoting and marketing their product.

[69]    Finally, it is important to remember that, when one comes to consider the question of the balance of convenience and justice, to some extent it is appropriate and necessary to consider the strength of the case that is being put by the applicants. In this regard, as I have already mentioned, I do not think that the conduct relied upon by the applicants constitutes trade mark infringement or constitutes the other contraventions relied upon by the applicants. I am entitled to take into account my assessment of the strength of the applicants’ case when weighing the balance of convenience and justice. At best, the applicants’ case is weak.

The same findings cannot be made by reference to the facts of the present case. The Applicants have acted with all due speed and have not “sat on their hands”. The serious questions to be tried, moreover, cannot be characterised as “weak”.

62    Consistent with the reluctance to enter the arena of whether the Respondents acted in good faith for the purposes of s 122(1)(b) of the Trade Marks Act, so too is there reluctance to place much weight at all upon the Applicants’ proposition that the Respondents acted with their “eyes wide open” when recently entering the market. When resolving an allegation as to patent infringement, Dowsett, Foster and Yates JJ in Samsung Electronics Company Ltd v Apple Inc [2011] FCAFC 156, (2011) 217 FCR 238 at 288-290 concluded:

[191]    We turn to the proposition that Samsung prepared to launch the Galaxy Tab 10.1 with its “eyes wide open”. Her Honour gave “minimal” weight to this factor. In [Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618]Kitto, Taylor, Menzies and Owen JJ said at 626:

The plaintiff on 10 May 1967 warned the defendant that if it began to do so proceedings for infringement of the patents would be taken. It was in the face of this warning that the defendant commenced the acts now complained of, and the action was thereafter instituted without delay. Any goodwill the defendant may since have built up for hetacillin would of course be destroyed or damaged by granting an injunction, but that was a risk the defendant took with its eyes open. If it be not restrained, it will presumably take advantage of the time before the hearing to subject the goodwill of the plaintiff’s established trade … to the prejudice of competition … In no meaningful sense could matters be said to be kept in statu quo if in these circumstances the defendant were left free to pursue its course, merely keeping an account of the profits it makes.

[192]    Clearly, their Honours considered that where an asset or other benefit had been derived by an alleged infringer of rights, with notice of the allegedly infringed rights, it should not escape an interlocutory injunction by relying on any threat which such relief might pose to that asset or benefit. Whether their Honours meant that such knowledge was otherwise relevant to the grant of interlocutory relief is unclear.

[193]    In Smith & Nephew Pty Ltd v Wake Forest University Health Sciences (2009) 82 IPR 467, the Full Court observed at [51]–[52]:

51    Second, the applicant sought to argue that the primary judge had, in effect, imposed on the applicant an obligation as a matter of law to “clear the way”, and relied too heavily on the fact that the applicant embarked on the alleged infringing conduct with its “eyes wide open”. We do not consider that the primary judge did raise either consideration to a proposition of law, or that he placed too much weight upon them.

52    We do, however, accept that it would be an error in considering whether the grant of an interlocutory injunction, in the context of an infringement claim, where the validity of the patent is an issue, to impose on a person who seeks to launch an alleged infringing product, an obligation to “clear the way” by revoking the patent. Equally, the fact that a new entrant is prepared to take the risk of being restrained with its eyes wide open, should not be elevated beyond being a factor in the assessment of the many factors relevant to whether to grant an injunction.

Of present relevance is the caution expressed by their Honours – and their Honours’ reliance upon – not “elevating” any finding that a party has entered the market with its “eyes wide open”. The fact that the Respondents have only recently entered the market, it is considered, is accorded some considerable weight; any suggestion that it did so with its “eyes wide open” is a factor which has been given considerably less weight. On the part of the Respondents, Mr Holyman maintains that he entered the market not believing he was doing anything wrong. But that is a matter in respect of which no finding is presently made.

The public interest

63    A further plank in the resistance on the part of the Respondents to the granting of interlocutory relief was their submission that the granting of such relief would be contrary to the public interest or (at least) not in the public interest and/or that the granting of such relief would prejudicially affect third parties.

64    The relevance of the interests of third parties and the public more generally may be accepted: cf. Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30, (1998) 195 CLR 1. Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ there observed (at 41 to 42):

Third Parties

[65]    In applications to grant interlocutory injunctions, the court is concerned to examine and in appropriate cases to protect, pending the trial, the moving party's right to relief against that party's opponent. But the rights of plaintiff and defendant are not the only rights considered in determining where the balance of convenience lies. In Wood v Sutcliffe [(1851) 2 Sim (NS) 163 at 165-166] Sir Richard Kindersley V-C said:

“[W]henever a Court of Equity is asked for an injunction in cases of such a nature as this, it must have regard not only to the dry strict rights of the Plaintiff and Defendant, but also to the surrounding circumstances, to the rights or interests of other persons which may be more or less involved: it must, I say, have regard to those circumstances before it exercises its jurisdiction (which is unquestionably a strong one), of granting an injunction.”

The principle in Wood v Sutcliffe was approved by Cumming-Bruce LJ in Miller v Jackson [[1977] QB 966 at 988]:

“Courts of equity will not ordinarily and without special necessity interfere by injunction where the injunction will have the effect of very materially injuring the rights of third persons not before the court.”

His Lordship cited with approval a passage from Dr Spry’s Equitable Remedies [5th ed (1997), pp 402-403]. We too adopt the author’s statement:

“the interests of the public and of third persons are relevant and have more or less weight according to the other material circumstances. So it has been said that courts of equity ‘upon principle, will not ordinarily and without special necessity interfere by injunction, where the injunction will have the effect of very materially injuring the rights of third persons not before the courts’. Regard must be had ‘not only to the dry strict rights of the plaintiff and the defendant, but also the surrounding circumstances, to the rights or interests of other persons which may be more or less involved’. So it is that where the plaintiff has prima facie a right to specific relief, the court will, in accordance with these principles, weigh the disadvantage or hardship that he would suffer if relief were refused against any hardship or disadvantage that might be caused to third persons or to the public generally if relief were granted, even though these latter considerations are only rarely found to be decisive. (Conversely, detriment that might be caused to third persons or to the public generally if an injunction were refused is taken into account.)”

65    Aspects of the public interest or the rights of third parties seized upon by the Respondents (without being exhaustive) were:

    the prospect that consumers of the products in question could be denied access to those products – there being serious questions as to the ability of the Applicants to continue to supply products and the inability of the Respondents to continue their distribution of their own products if an injunction were to be granted;

    the disruption to the planning of retailers and the fact that some retailers have already commenced advertising the availability of the Respondents’ products; and

    the more generally expressed public interest in promoting competition.

66    Although these matters should be taken into account when exercising the discretion to grant or refuse interlocutory relief, they do not – with respect – weigh the balance in favour of refusing relief. The fact forever remains that there is at least a prima facie case that the Respondents are passing off their products as those of the Applicants and the prima facie case that consumers are likely to be misled or deceived as to the product they are purchasing.

Damages as an adequate remedy

67    Damages, it is respectfully considered, would not be an adequate remedy.

68    There may be some difficulty in assessing damages, should interlocutory relief be refused. The keeping of records by the Respondents would go some way towards relieving some of those difficulties.

69    The principal reason for concluding that damages would not be an adequate remedy is that the Applicants have an established reputation and goodwill developed over a considerable period of time in respect to the sale of their products, and it would be unjust to permit the Respondents, even for a short period of time in advance of any possible expedited hearing, to continue to pass off their products as those of the Applicants and unjust to continue to allow consumers to be exposed to misleading representations or the likelihood of being misled or deceived.

70    The more so is this the case where the Respondents have only been in the market for a very limited period of time of some weeks and where no submission is made on their behalf that the Applicants did not move quickly to restrain their conduct.

71    Not to be ignored is the oft repeated submission of the Respondents that interlocutory relief has the very real prospect of requiring them to rebrand their products with a consequential delay whilst that takes place. The award of damages, they submitted, adequately protects the Applicants; interlocutory relief inevitably dooms the Respondent to a rebranding exercise which they do not wish to undertake and which exposes them to inevitable loss.

72    The competing financial impacts upon the parties have to be taken into account.

73    But the view is adhered to that damages would not adequately address the interests of the Applicants.

Norwich Pharmacal

74    Part of the interlocutory relief sought by the Applicants was an order for the filing of affidavits identifying (inter alia) “each recipient of marketing or promotional material using the word ‘RestQ’ or depicting the RestQ Packaging”.

75    This form of order has its origins in Norwich Pharmacal Co v Commissioners of Customs and Excise [1974] AC 133 at 175 where Lord Reid referred to earlier authority and concluded:

… They seem to me to point to a very reasonable principle that if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration.

76    Thereafter, it would seem to be the position that in the United Kingdom at least that an applicant seeking such an order needs to satisfy “three threshold conditions”: Orb ARL v Fiddler [2016] EWHC 361. In that decision Popplewell J concluded:

The Norwich Pharmacal jurisdiction

[82]    The Norwich Pharmacal jurisdiction has its origin in the case of that name, Norwich Pharmacal Co and Others v Customs and Excise Commissioners [1974] AC 133….

[83]    As the jurisdiction has developed there are three threshold conditions which must be satisfied.

[84]    The first condition is that there must have been a wrong carried out, or arguably carried out, by an ultimate wrongdoer. The “wrong” may be a crime, tort, breach of contract, equitable wrong or contempt of court. It is not necessary to establish conclusively that a wrong has been carried out; it will be sufficient if it is arguable that a wrong has been carried out. The strength of the argument will be a factor in the exercise of the discretion, but an arguable case is sufficient to meet the threshold condition. The wrongdoing must be identified by the applicant at least in general terms: …

[85]    The second condition is that the disclosure sought must be necessary in order to enable to applicant to bring legal proceedings or seek other legitimate redress for the wrongdoing. …

…

[88]    The third threshold condition is that the person against whom the order is sought must be involved in the wrongdoing in a way which distinguishes him from being a mere witness. …

(without alteration and citations omitted)

77    On the facts of the present case, the Applicants would fall foul of the second condition – there being no evidence that the order is “necessary in order to enable the applicant to bring legal proceedings …”.

78    It may be queried whether the Australian authorities have proceeded in tandem with the position overseas.

79    But whether that is so or not, the interlocutory order for the filing of affidavits as sought by the Applicants is refused in the exercise of the Court’s discretion. Whether or not such an order may ultimately be made should remain a matter for the docket Judge to resolve in the event that the interlocutory application is renewed or when case managing the proceeding readying it for final hearing. Whether an order for discovery, in accordance with the Rules of this Court, would be the more appropriate way to proceed is a matter for future consideration.

Costs

80    The Applicants have been successful in obtaining interlocutory relief.

81    Although they initially sought an order for costs in the event of success, they ultimately settled upon an order that the costs should be their costs in the cause.

82    Such an order should be made.

CONCLUSIONS

83    It is has been concluded that the Applicants have made out a persuasive case in favour of granting the interlocutory relief which they seek. There is a serious question to be tried as to whether the Respondents have been passing off their products as those of the Applicants and an equally serious case to be tried as to whether in doing so their conduct falls within s 18 or s 29(1)(a),(g) and (h) of the Australian Consumer Law.

84    The balance of convenience lies in favour of granting such relief. Damages would not be an adequate remedy.

85    The Applicants costs should be their costs in the cause.

THE ORDERS OF THE COURT ARE:

1.    Martin & Pleasance Wholesale Pty Ltd be joined as the Third Respondent.

2.    Upon the Applicants by their counsel giving the usual undertaking as to damages in accordance with Practice Note GPN-UNDR, the Respondents, by themselves, their servants and agents and associates:

(a)    be restrained from marketing, promoting and/or supplying products (or offering to supply products) or participating in any such marketing, promotion or supply:

(i)    using the word “RestQ”; and/or

(ii)    using the packaging the subject of the photograph comprising annexure B to the Statement of Claim filed on 2 March 2021 (“RestQ Packaging”); and

(b)    the First and/or Third Respondent to deactivate the Facebook account with the handle RestQMP, the Instagram account with the handle RestQ_MP and remove the website www.restqcalm.com.au within 24 hours of the making of this order.

3.    The Applicants’ costs of the Interlocutory Application be their costs in the cause.

4.    The proceeding is listed before the docket Judge for case management hearing on a date to be fixed.

Associate:    

Dated:    17 March 2021