How much reputation is enough?

The Full Court has allowed Hansen’s appeal from the dismissal of its trade practices/passing off action against Bickford’s Monster Energy drinks.

Before the trial judge, it was conceded that Bickford’s get up would be confusingly similar to Hansen’s, but the trial judge found that Hansen did not have sufficient reputation with the public in Australia to found its claim.

Hansen had never traded here nor sold its energy drinks here.  However, there was evidence that it had “indirectly” promoted its brand name and get up here through activities such as sponsorships of sporting events and logos on clothing.

The Full Court reported the trial judge as finding that Hansen could not succeed unless it established a relevant reputation within its target market in Australia – males between the ages of 18 to 30.  His Honour went on to find the evidence was insufficient to support such a finding.  The indirect advertising was too fleeting and occasional to establish a reputation within the target youth market in Australia “other than perhaps some extreme sports enthusiasts”.

The Full Court allowed the appeal on the grounds that the “target market” was not the relevant section of the public to test Hansen’s reputation. It was necessary only for Hansen to show that it had a reputation in Australia with any relevant section of the public.

Tamberlin J (with whom Siopis J agreed) held:

[46] … In our view, the language of the section and its purpose do not require the Court to select any particular group as targeted by advertisers when assessing whether a breach has occurred. The fact that certain pieces or strategies of advertising may target a particular class of people as potential customers of the relevant product does not justify the conclusion that a significant number of persons in that class must be shown to be aware of the reputation before a claim under s 52 is made out. The question which must be answered can properly be framed as being whether a not insignificant number of persons in the Australian community, in fact or by inference, have been misled or are likely to be misled. (emphasis supplied)

Finkelstein J agreed in the result, but disagreed about the need for a reputation amongst more than an insignificant number of persons.  While his Honour accepted that passing off required the establishment of a reputation amongst a significant or substantial number of the Australian public, there was no warrant to import that requirement into an action for contravention of the Trade Practices Act.

Siopis J, as noted, agreed with Tamberlin J indicating also (?) that the earlier decisions requiring a not insignificant number were not “plainly wrong”.

The significance of the High Court’s reference in [103] of Campomar v Nike to isolating a representative of the class as the hypothetical individual to test “representations to the public”, therefore, bearing in mind the references in [102] to “ordinary” or “reasonable” members of that class, remains to be tested in some future High Court case.

As the trial judge did not explicitly find that Hansen did in fact have a reputation amongst Australian extreme sports enthusiasts, matter was remitted to him for further hearing.

Importantly for the future, Finkelstein J accepted that indirect marketing activities could be sufficient to establish the foundation for a s 52 claim:

63 There are a plethora of examples of indirect advertising and it is a key topic of discussion in advertising literature. Indirect advertising of the kind with which everyone is familiar is the sponsorship of sports. Many people in many countries place great value upon entertainment, competition and accomplishment, all of which are seen in the sporting arena. Brand names and logos appear around sporting arenas, on the clothing worn by sportsmen and women and on the equipment sportsmen and women use. This form of advertising is seen by many thousands of fans who attend sporting events and, in the case of popular sports, by hundreds of thousands of people if the event is broadcast on television. There are numerous studies that show that this type of indirect advertisement is far more effective at eliciting a consumer recall response than a direct television commercial.

64 In my opinion the judge was entitled to infer that the indirect brand advertising employed by Hansen (and, for that matter, Bickfords) can establish reputation as well as, if not better than, direct advertising. After all, everyone knows that James Bond drives an Aston Martin, Janis Joplin wanted to own a Mercedes Benz and Audrey Hepburn had breakfast at Tiffany’s.

Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181

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