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Australian Lawyers and Consultants

The Injunction Remedy

April 2003

The Federal Court, the Supreme Courts, County Courts and VCAT, each have jurisdiction to issue an injunction as an interlocutory order (i.e. prior to the main hearing on the merits of the case) in circumstances where the court or tribunal considers “on the balance of convenience” it is the best solution that the defendant’s offending conduct be restrained immediately. The court must weigh up the “inconvenience” factors such as the cost that the defendants and others may suffer or the alternative remedies that might present other solutions. Generally, in Australian jurisdictions, any plaintiff will be required to produce an Undertaking as to damages that might be sustained by the party whose conduct is to be restrained.

When a company brings out a new product line, the naming, advertising or design of the product may give rise to legal action either for intellectual property passing off rights, or action taken under the Trade Practices Act for misleading or deceptive conduct. An injunction may sometimes be necessary.

In Tooheys Pty Ltd v Coopers Brewery Limited [2003] FCA 148 (7 March 2003), Tooheys Breweries sought an interlocutory injunction against Coopers Brewery in regard to their new range of draught and light beers. The advertising and labelling used by Coopers Brewery in their new range involved phrases such as “New Draught” and “New Light”. Tooheys claimed that the use of the word “new” was misleading and deceptive because Tooheys uses the word “new” in connection with its flagship beer.

In response, Coopers claimed that the use of the word “new” was meant to inform customers of its new beer products and was intended for use within a limited time period. Coopers indicated that it would phase out any references to the word “new” and revert to labels “Coopers Light” and “Coopers Draught”. Coopers also claimed that the use of the word “new” in relation to their new range would not be of significant detriment to Tooheys as Coopers’ main market was South Australia and that Tooheys did not have a key market share or reputation within South Australia.

The Federal Court of Australia agreed that the use of “new” by Coopers did NOT constitute misleading and deceptive conduct and that “the damage and inconvenience likely to be caused to Coopers outweighed the inconvenience and hardship asserted by Tooheys” that would occur if the injunction was accepted and if the relabelling of their products was required. Taking into consideration the damage likely to be caused to each company in the case of an interlocutory injunction being accepted, the court refused the injunction sought by Tooheys.

Nevertheless, the case reminds us that using a new product name or new advertising strategy can potentially provoke a legal action for infringements to competitors and one should be aware of the risks. Even a relatively simple case, such as this one, where the word “new” was being used to promote a new range of beer, gave rise to legal proceedings.

For further information, contact Sam Recht at BALDWINS, Australian Lawyers & Consultants.

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