Case: Vieright Pty Ltd v Myer Stores Ltd (1995) 31 IPR 361
Outcome: cited
elements of a cause of action in passing-off were identified by Lord Oliver in Reckitt and Colman Products Ltd v Borden Inc (1990) 17 IPR 1 at 7. In Vieright Pty Ltd v Myer Stores Ltd (1995) 31 IPR 361 at 369, the Full Court approved and summarised the elements to be derived from Reckitt : "(1) that the trader's get-up, including any brand name, is recognised by the public as distinctive specifically of the plaintiff's goods; (2) that there has been a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods offered by the defendant are the plaintiff's goods (whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods is immaterial, provided they are identified with a particular source, eg by means of a brand name which is in fact the plaintiff's); (3) that the plaintiff suffers or, in a quia timet action is likely to suffer, damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods is the same as the source of those offered by the plaintiff". See also TGI Friday's Australia Pty Ltd v TGI Friday's Inc (1999) 45 IPR 43 at 50. In Vieright the Full Court observed (at 373) that: "The settled course of authority holds that, as in the passing off claim, the essential question here is largely one of fact: is, in all the circumstances, the respondent's conduct likely to mislead? In the present kind of case, it will usually be the situation that if a passing off claim is established, it will be so by reason of a finding of a misrepresentation of the type discussed in the authorities. Such a misrepresentation will usually constitute a contravention of s 52, and possibly s 53 , of the Trade Practices Act ". In the present case there can, in my opinion, be no doubt that the conduct of Hepbourne, acting through its sole director and shareholder, was likely to mislead purchasers of the footwear manufactured in and distributed from its premises. The second element of the tort of passing-off is established, as too are contraventions of ss 52 and 53 of the TP Act. The third element needed to make out the tort of passing-off is that an applicant must suffer damage as a result of a respondent's conduct. In the present case there can be no doubt that damage has been inflicted on Deckers. That damage occurred as a result of loss of sales and the undermining of the confidence of consumers in the Deckers products because of the poor quality of the counterfeit footwear manufactured and distributed by Hepbourne and others. I will return later in these reasons to the quantification of Deckers' losses. It is sufficient for present purposes to record that the sales of counterfeit products yielded many millions of dollars for Hepbourne and other respondents. It may reasonably be inferred that much of this money would have been expended on genuine Deckers footwear had the purchasers not been induced to purchase counterfeit products. There is also evidence to support a finding, which I do make, that the counterfeit product was, in many respects, inferior to the genuine Deckers footwear. This has implications for the reputation which Deckers' products enjoy in the marketplace. The evidence to support this was provided by Mr Ken Hirshberg, the Director of Materials, Quality Control and Logistical Sourcing for the applicant. He has had 53 years' experience in the footwear manufacturing industry. He has been involved in the industry in various capacities, primarily in the sourcing of materials for the manufacture of footwear, coordinating and supervising the manufacture of footwear, and quality control in the manufacturing of footwear. Mr Hirshberg found many deficiencies in the quality of the counterfeit footwear. These deficiencies included the: