Category Archives: Trade Practices

Re Taco Company of Australia Inc; Taco Bell v Taco Bell Pty Limited; Denbrad Management Pty Limited; Robert Francis; Eric Baillie Francis [1982] FCA 136

ON 22 JULY 1982, the Federal Court of Australia delivered Re Taco Company of Australia Inc; Taco Bell v Taco Bell Pty Limited; Denbrad Management Pty Limited; Robert Francis; Eric Baillie Francis [1982] FCA 136 (22 July 1982).

http://www.austlii.edu.au/au/cases/cth/FCA/1982/136.html

Taco Bell Pty Ltd (the first respondent) was incorporated in NSW, Australia and had for several years operated a business in Bondi called Taco Bell’s Casa and in 1974 registered the business names of Taco Bell and Taco Casa. Taco Company of Australia Inc (the appellant) was incorporated in the United States with the intention to establish Taco Bell restaurants in Australia and from 1981 operated a Taco Bell restaurant in Sydney.

The respondents sued the appellant for misleading and deceptive conduce under s52 and s53 of the Commonwealth Trade Practices Act 1975 and for passing off. The appellant made similar counter-claims.

At trial, the first respondent was successful in establishing a breach of s52 and passing off.

An appeal was dismissed and injunctions were granted in favour of the respondents restraining the appellant from, within the Sydney metropolitan area (1) using the name Taco Bell or (2) passing off goods and services as being that of the respondents.

A number of observations and principles come from this case.

Representation

At 202, Deane and Fitzgerald JJ observed that a finding on whether or not conduct is a representation is “a question of fact to be decided by considering what [was] said and done against the background of all surrounding circumstances”.

and

“In some cases, such as an express untrue representation made only to identified individuals, the process of deciding that question of fact may be direct and uncomplicated. In other cases, the process will be more complicated and call for the assistance of certain guidelines upon the path to decision.”

The doctrine of erroneous assumption

At 200, Deane and Fitzgerald JJ held:

“no conduct can mislead or deceive unless the representee labours under some erroneous assumption”.

and

“Such an assumption can range from the obvious, such as a simple assumption that an express representation is worthy of credence, through the predictable, such as the common assumption in a passing-off case that goods marketed under a trade name which corresponds to the well-known trade name of goods of the same type have their origins in the manufacturer of the well-known goods, to the fanciful, such as an assumption that the mere fact that a person sells goods means that he is the manufacturer of them.”

When determining whether conduct should be categorised as misleading or deceptive or as likely to mislead or deceive, the nature of the erroneous assumption “will be a relevant, and sometimes decisive, factor”

Misconception

There must be a misrepresentation, not mere tendency to cause confusion or uncertainty.  At 201, Deane and Fitzgerald JJ accepted that 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”.

Injunctions

At 207, Deane and Fitzgerald JJ said “Injunctive relief granted to restrain contravention of s52 of the [TP Act] should plainly be limited to what is necessary in the circumstances of the particular case.”

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News Limited v Australian Rugby Football League Ltd [1996] FCA 870 | 4 October 1996

ON 4 OCTOBER 1996, the Federal Court of Australia delivered News Limited & ors v Australian Rugby Football League Ltd & ors; Brisbane Broncos Rugby League Football Club Ltd & ors v Australian Rugby Football League Ltd & ors; Cowboys Rugby League Ltd v the Australian Rugby Football Club Ltd & ors [1996] FCA 870 (4 October 1996).

http://www.austlii.edu.au/au/cases/cth/FCA/1996/870.html

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Sydney, Australia

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Trade Practices Act turns 40

The ACCC has released a commemorative magazine and video to celebrate 40 years of the Trade Practices Act 1974 (Cth), which commenced on 1 October 1974.

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Yorke v Lucas [1985] HCA 65 | 3 October 1985

Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 (3 October 1985).

http://www.austlii.edu.au/au/cases/cth/high_ct/158clr661.html

The High Court said that although an intention to mislead or deceive is not a requisite element for a contravention of s52 of the Trade Practices Act 1974, the passing on of false information by a corporation is not misleading or deceptive conduct if it is apparent that the corporation is not the source of the information and it disclaims any belief in its truth or falsity.

To be liable for misleading or deceptive conduct, the individual passing on the information must either be an intentional participant, or if not, a participant with knowledge of the essential facts constituting the contravention of s52 (even if he or she does not know that those matters amount to a contravention).

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Sydney, Australia

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Coles to publish notice that it broke the law

The Federal Court of Australia today delivered Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Limited (No 2) [2014] FCA 1022 (29 September 2014).

Chief Justice Alsopp declared that Coles Supermarkets Australia Pty Limited had from 1 July 2012 been breached the Competition and Consumer Act 2010 (Cth) by displaying the words “Baked Today, Sold Today” in circumstances where only some baking of certain products had taken place on the day on which they were offered for sale.

His Honour declared that the representations were false, misleading and deceptive.

It was ordered that Coles display corrective notices on their website and at their premises. Orders were also made to restrain Coles from engaging in similar conduct over the next three years.

http://www.austlii.edu.au/au/cases/cth/HCA/2014/11.html

“Free range eggs” $800,000 fine

In Australian Competition and Consumer Commission v Pirovic Enterprises Pty Ltd (No 2) [2014] FCA 1028 (23 September 2014), the Federal Court of Australia declared, by consent, that representations and conduct of Pirovic Enterprises Pty Ltd (Pirovic) promoting their eggs as “free range” was misleading. The company was fined $800,000.

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McIlhenny Co v Blue Yonder Holdings Pty Ltd formerly trading as Tabasco Design & Anor [1997] FCA 962 | 18 September 1997

ON 18 SEPTEMBER 1997, the Federal Court of Australia delivered McIlhenny Co v Blue Yonder Holdings Pty Ltd formerly trading as Tabasco Design & Anor [1997] FCA 962 (18 September 1997).

It is possible for a trademark to refer to another well known trademark, as long as the goods or services are not likely to appear to be connected and there is no likelihood of deception or confusion.

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Trade Practices Commission v Service Station Association Limited [1993] FCA 405 | 26 August 1993

ON 26 AUGUST 1993, the Federal Court of Australia delivered Trade Practices Commission v Service Station Association Limited [1993] FCA 405; (1993) Atpr 41-260 (1993) 116 ALR 643 (1993) 44 FCR 206 (26 August 1993).

Section 45 of the Trade Practices Act 1974 (Cth) prohibits a corporation from making or giving effect to contracts, arrangements or understandings in restraint of trade. The court held that an arrangement or understanding does not necessarily require an element of mutual commitment but, in practice, reciprocity of obligation would ordinarily be assumed by the other party.

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Sydney, Australia

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Trade Practices Act 1974 (Cth) | Competition and Consumer Act 2010 (Cth) | 24 August 1974

ON 24 AUGUST 1974, the Commonwealth Trade Practices Act 1974 was enacted. In 2010 it became the Competition and Consumer Law 2010.

http://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/

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Australian Knitting Mills Ltd v Grant [1933] HCA 35 | 18 August 1933

ON 18 AUGUST 1933, the High Court of Australia delivered Australian Knitting Mills Ltd v Grant [1933] HCA 35; (1933) 50 CLR 387 (18 August 1933).

http://www.austlii.edu.au/au/cases/cth/HCA/1933/35.html

Per Dixon J at 418:

“The condition that goods are of merchantable quality requires that they should be in such an actual state that a buyer fully acquainted with the facts and, therefore, knowing what hidden defects exist and not being limited to their apparent condition would buy them without abatement of the price obtainable for such goods if in reasonably sound order and condition and without special terms.”

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