Visual Misrepresentation and Passing-Off

Deceptive Pictorial Advertising.

Television is a powerful medium of influence and poses a significant challenge to regulators. Gerald Thain, a former Assistant Director of the FTC Bureau of Consumer Protection recognised the problem when he observed that:

“Television is a visual experience. Factors of cognition, recognition and acceptance of messages have origins and methods of development which appear to set them well apart from printed or even solely verbal material. Television advertising can combine visual, verbal and emotional stimuli to provide what is essentially a non-rational experience for the viewer. A “mood” may be induced, by colour, music, and camera techniques which is capable of overcoming rational considerations … ” ²

The very wide area of possible deception includes product demonstrations purporting to prove non-existent abilities or properties; disparaging competitor’s products by “tests”, and the use of special camera and film techniques to depict the performance of a product.

In determining whether conduct is “misleading or deceptive”, the Courts have regard to the audience that is to be protected. In Taco Co. of Australia -v- Taco Bell Pty Limited (1982) 42 ALR 177, it was held that the relevant class of persons included the astute and the gullible, the intelligent and the not so intelligent, the well educated and the poorly educated.

In order to determine whether a pictorial representation has the capacity or tendency to deceive, it is helpful to have some understanding of the techniques used by advertisers.

Psychology as a discipline plays a major role in advertising. As early as 1895, an advertising trade publication, Printers’ Ink, predicted that “probably, when we are a little more enlightened, the advertising writer, like the teacher, will study psychology. For, however diverse their occupations may at first sight appear, the advertising writer and the teacher have one great object in common – to influence the human mind”.³

With basic understanding of the psychological influences on modern advertising, the consequences of pictures in contemporary advertising technology can be better understood.

The language of pictures is outside the training of most lawyers. While lawyers may be experts at inferring objective meaning from ambiguous language, they would not normally be competent to expertly evaluate objectively the meaning of most pictures.

Three categories of pictorial misrepresentation can be identified:
    (1) Blatant misrepresentation.
    (2) “Best Light” representation.
    (3) Susceptive manipulation.

Blatant misrepresentation involves showing a product to have a property that it does not possess.  Images in this category pose the least problem in regulation as there is no visual ambiguity. If a quality is pictorially attributed to a product which is in fact not intrinsic to it, it is deceptive. For example, the wearing of a white coat and stethoscope to give the impression of medical expertise.

In the United Kingdom, section 14 of the Trade Description Act 1968 provides that:

The section bears some similarity to section 53 of the TPA although it should be recalled that section 53 may be breached in the absence of any intent.

Section 14 of the Trade Description Act 1968 was considered by the English High Court in Yugotours Limited -v- Wadsley (1988) 153 JP 345. In that case, a 1986 Yugotours holiday brochure advertised a holiday entitled “Adriatic Island Adventure”. The text was accompanied by a photo of a three masted schooner. The holiday description included the words “the excitement of being under full sail on board this majestic schooner” and “lie back and enjoy the wind-filled sails”. A letter which was sent to the tour company’s customers stated “Your cruise will be a combination of sailing and motor sailing” and stated also that the aforesaid schooner had two showers.

The plaintiffs booked holidays in reliance on the brochure and complained that the vessel provided for the holiday was not the vessel pictured in the brochure. It was not a three masted schooner, nor had it any sails. It did not have two showers as advertised but only one. Yugotours were charged under section 14 of the Trade Descriptions Act with recklessly making a false statement. Two of the charges related to the brochure and the statement alleged to be false was that the vessel pictured was the one to be provided. The High Court held that anyone reading the brochure could come to no other conclusion than that the words “under full sail on this majestic schooner” under the photograph of the three masted schooner, could only be a representation either that Yugotours had control of the vessel depicted, or at least of a three masted vessel, or at the very least that they had the intention of providing such a vessel. Lord Justice Parker said that there was no explanation in the brochure that the photograph of the three masted schooner was merely to depict the type of vessel provided as could so easily have been done. In the result, the Court held that a breach of section 14 had been proved.

Mock-ups or test simulation in television advertising also fall within the category of blatant misrepresentation. A landmark case in this area is the decision of the United States Supreme Court in  Colgate-Palmolive Co -v- FTC 380 U.S. 374 (1965).

The case concerned a commercial for shaving cream where the product’s super-moisturising properties were “proved” by shaving sandpaper.

The main charges levelled were first that the “sandpaper” was actually a mock-up made of plexiglass to which sand had been applied, which was deceptively used to “prove” the merits of the product; and second, that the soaking of the shaving cream into the paper would actually take much longer than indicated by the simulated test i.e. approximately 80 minutes. The Court held that a false presentation offered as “proof” of a claim, whether or not the claim is true, is a deceptive practice within the meaning of section 5 of the Federal Trade Commission Act because it is material to the inducement of a sale.

Television is only a moving version of the printed picture and there seems to be no reason not to apply similar restrictions as to the printed media.

The category of “Best Light” representations deals with the portrayal of a product in surroundings or in a manner which best highlights and enhances the object. In this way, the maker of the statement is not misrepresenting qualities intrinsic to product e.g. size or weight but is depicting the item as having extrinsic qualities which it does not possess e.g. freedom and adventure. It is the benefits that can be derived from the product that have been misrepresented: the benefits are depicted as flowing from the product, when they more truthfully flow from the user.

It is not considered that images in this category should be the subject of overly broad regulation as the problems would be insurmountable. Every photograph used in an advertisement probably shows the product in its “best light”.

In susceptive manipulation, a stimulus may produce some impression on the viewer even though there is no recognition or even detection at the conscious level. The idea behind subliminal perception is that images can be flashed too fast or in some other way “hidden” to be consciously perceived, as the length of exposure is below (sub) the threshold (limen) of consciousness. It is hypothesized that the image is recorded on the subconscious and that it can appeal to the instincts directly at that level. This causes the subject to respond to a suggestion without realising that he was ever given a suggestion⁴.

If images in advertisements can affect a person’s buying behaviour without his knowledge or consent, it is arguably deceptive and should be regulated.

In the United Kingdom this technique is regulated by the Television Act, 1964,  section 3(3) which provides that:-

“It shall be the duty of the Authority to satisfy themselves that the programmes broadcast by the Authority do not include, whether in an advertisement or otherwise, any technical device which, by using images of very brief duration or by any other means, exploits the possibility of conveying a message to, or otherwise influencing the minds of, members of an audience without their being aware, of what has been done”.

It is suggested that there is no reason in principle why section 52 of the TPA could not be employed to regulate such conduct. The legal framework could conceivably support such an action. What is lacking is the scientific data to establish at the subliminal level, the “truthfulness” or otherwise of the pictorial content in advertisements.

In Australia, advertising claims brought under section 52 of the TPA tend to be restricted to the field of comparative/disparaging advertising. The Courts also tend to recognise that a degree of latitude is to be allowed.

In H.W. Thompson Buildings Pty Ltd v Allen Property Services Pty Ltd (1983) ATPR 40-371, the Federal Court considered an argument that an artist’s impression in a brochure was misleading conduct within section 52 of the TPA.

In that case, the applicant had contracted to purchase two strata units in a building. The building was part of a project known as “Tweed Gardens”. The brochure contained “an artist’s impression of the completed project, consisting of three high rise buildings of 25 floors, situated in a landscaped area of approximately 16 acres, containing a lake, swimming pools adjacent to each of the three towers, tennis courts and various coloured pictures depicting the surrounding area, the sporting and recreational activities available, such as surfing, fishing and the local scenery.

The text of the brochure was also descriptive of the project. At the time the contracts were entered into, however, the vendor only intended to proceed with the building of one tower.

The applicant sought a declaration under section 87 of the TPA that the contract was void, an order that the deposit be repaid and damages. It was alleged that the brochure and certain statements made by an agent of the vendor prior to the receipt of the brochure, certain letters and advertisements in newspapers and journals which reproduced the artist’s impression in the brochure were misleading or deceptive contrary to section 52 and had induced the applicant to enter into the contract. It was also alleged that at the time the contract was entered into, the vendor had represented first that it intended to proceed with building three towers, and secondly that all the facilities described in the brochure would be available to those buying units in the first tower.

The court dismissed the application and found that the vendor’s conduct was not misleading nor was the court satisfied on the evidence that the applicant had entered into the contract in reliance on the vendor’s conduct.

In Butcher & Anor v Lachlan Elder Realty Pty Ltd [2004] HCA 60, the High Court considered the effect of representations made in an advertising brochure for the sale of a waterfront property which included a photograph and a survey drawing and a disclaimer as to the accuracy of the information contained in the brochure. The front of the brochure consisted mainly of a photograph of the rear of the property showing boats moored at a jetty, the lawn, a metal picket fence and the house. On the back of the brochure, in the top right hand quarter of the page appeared a survey diagram which showed among other things, a brick house, a pool, a line marked “MHWM” (Mean High Water Mark). In fact, the MHWM was not located where it was shown on the survey diagram but traversed the swimming pool. The trial judge concluded the reader comparing the survey drawing with the photo on the front of the brochure would conclude that the picket fence ran along the MHWM. The purchaser sued the owner of the house alleging fraudulent and innocent misrepresentation and misleading and deceptive conduct and sued the real estate agent alleging misleading and deceptive conduct. The trial judge found that the owner had made an innocent misrepresentation and the real estate agent was not liable because of the disclaimer. On appeal the High Court upheld the trial judge’s finding.

Although the court did not find a breach of section 52 on the evidence in both H.W Thompson and Butcher’s Case, it is interesting in that the courts appear to accept that a pictorial representation can amount to a misrepresentation within the terms of section 52.

Character Merchandising and Passing-Off

The term “character merchandising” is generally used to include merchandising practices involving the name, likeness or person of both real and fictional characters. The practice was described by Justice Burchett in the Sue Smith Case (1988) ATPR 40-851 in the following terms:

“When Shakespeare, in Venus and Adonis pictured the “True-love in her naked bed, Teaching the sheets a whiter hue than white” he was not advertising a washing powder, but, as it happens his language is remarkably provocative of a modern technique of selling, by which a product is associated with a desirable personality  in whose reflected light it will appear more pleasing. The technique is called character merchandising (a feature of which) is that the advertiser uses the public image of the personality concerned to develop in the minds of consumers an identification of the product with that personality.”

In Pacific Dunlop Limited v Hogan (“Crocodile Dundee Case”) (1989) 87 ALR 14 (Full Court), Justice Burchett said:

“The whole importance with character merchandising is the creation of an association of the product with the character; not the making of precise representations. Precision would only weaken an impression which is unrelated to logic, and logically indefensible”.

His Honour’s comment shows a clear understanding by the court of the techniques employed by advertisers.

Cases in this category are normally brought under sections 52 or 53 of the TPA. The key to successful character merchandising is the possession of a property right in the intangible values sought to be protected. Another basis for the protection of character merchandising falls within the realm of the common law tort of passing-off. In this context, section 52 of the TPA operates in effect as a statutory passing-off action. In Hornsbv Building Information Centre Pty. Limited v Sydney Building Information  Centre  Limited (1978) 1 B IPR 818, Justice Murphy observed that “passing-off is a classical example of misleading or deceptive conduct”. The doctrinal bases of the common law and the statutory action are different in that passing-off is designed to protect the plaintiff’s “property in the business or goodwill likely to be injured by the misrepresentation” whereas section 52 is designed to protect consumers from misleading or deceptive conduct. In cases involving character merchandising, section 52 is invariably pleaded as an alternative to passing-off. In interpreting section 52, the courts often apply passing-off principles.

However, the High Court in Butcher & Anor v Lachlan Elder Realty Pty Ltd  [2004] HCA 60 has cautioned on this practice and in referring to the construction of section 52 said at paragraph [98]: “Section 52 must be construed against the background of the general law, for its intended scope cannot be fully perceived without an understanding of that background. But common law principles of liability do not govern the operation of the section. While those principles may often be relevant in determining whether a contravention of s 52 has occurred, they are not determinative and do not always provide a safe guide to the operation of s 52”.

In character merchandising cases, the same factual considerations and legal principles have been applied in both the section 52 and the passing-off actions. Generally, if no misrepresentation is involved, neither misleading or deceptive conduct nor passing-off can be established. The classic action for passing-off was enunciated in Reddaway v Banham (1896) AC 199 at 209 per Lord Herschell. In that case, passing-off was formulated as misrepresentation by one trader that his goods were those of a rival trader. This formulation was extended over time and later Lord Diplock’s  statement in Erven Warnink B.V. v J. Townend & Sons (Hull) Limited (1979) AC 731 became the standard statement of the action for passing-off as follows:

(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 a trader by whom the action is brought or (in a quia timet action) will probably do so.

In later developments it was held that passing-off is wide enough to encompass other descriptive material, such as slogans or visual images, which radio television or newspaper advertising  campaigns can lead the market to associate with a plaintiff’s product, provided always that such descriptive material has become part of the goodwill of the product.⁵

This article will focus on that aspect of passing-off and character merchandising relating to visual images. The classic action protects trading goodwill while the extended action protects promotional goodwill.

In the extended action

“… the defendant does not necessarily seek to disguise the source of his goods or his services. He simply makes a representation which links him with the plaintiff or his goods. The public, while recognising that the goods or services in question come from the defendant, is nevertheless deceived into believing that the plaintiff is somehow associated with them – and this is the essence of the extended action for passing-off. The proprietary interest filched does not involve the plaintiff’s trading goodwill: it is promotional goodwill, the ability to recommend or promote other goods or services – or merchandising rights — which are appropriated”.⁶

The extended action of passing-off now permits the bringing of a suit in respect of an “image”. This was expressly recognised by Justice Pincus in Hogan v Koala Dundee Pty. Limited (1988) 83 ALR 187 where His Honour said:

“I think the law now is, at least in Australia, that the inventor of a sufficiently famous fictional character having certain visual or other traits may prevent others using his character to sell their goods and may assign the right so to use the character; furthermore, the inventor may do these things even where he has never carried on any business at all, other than the writing or the making of the work in which the character appears”.

In Hogan’s Case, the respondents who operated two retail outlets called “Dundee Country” in display signs inside and outside the shops as well as on various items sold in the shop displayed the image of a koala in a get-up reminiscent of the character Crocodile Dundee. The applicants who were associated with the film Crocodile Dundee sought an injunction restraining the respondents from using the koala image with or without the word “Dundee” in their business. The action was brought under section 52 of the TPA and the law on passing-off. The relevant allegations concerning section 52 were that the goods of the respondent or the business had the endorsement of the applicants or that the business was owned or conducted under a franchise or license from the applicants.

The Court granted the injunction and found that the implied representation that the business was associated with the film was a ground for a passing-off liability. The Court did not find it necessary to consider the section 52 claim. The case is interesting for its extension to the traditional doctrine of passing-off in permitting an action to be brought in respect of an image unconnected with any business at all. His Honour at pages 49,705 and 49,706 said in respect of images:

“I use the word “images” to refer generally to things seen — whether objects or pictures or words”.

In reaching his conclusion, His Honour recognised the difficulties involved in the use of images in advertising. At page 49,711 His Honour said:

“Unlike a representation as to the origin or quality of goods, use of mere images in advertising although presumably effective to generate sales, does not necessarily do so by creating, or relying on, any specific conclusion in the minds of the buying public”.

Evidence was lead by an expert on behalf of the applicants relating to the psychological aspects of character merchandising. The witness explained his view as follows:

“The personality or the character used to promote a product is intended to assist the promoter in jolting the minds of those viewing the advertisement to a happy or memorable association, so that the product gets the “rub-off” associated with the personality or character”.

His Honour commented upon that evidence in the following terms:

“This description points out the difficulty of the law’s intruding into the rather nebulous area. As the facts of this case illustrate, however, rights to use a personality or character can be extremely valuable. It appears to me that the trend of recent Australian authority is to treat protection of such rights as a proper function of the Courts, at least if there is a clear and deliberate use by the respondent”.

His Honour quoted with approval the decision of the New South Wales Court of Appeal in Henderson v Radio Corporation Pty Limited (1960) SR (NSW) 576. His Honour also made the interesting remark that English law had not progressed much beyond the traditional notion of passing-off and that the case law in the United Kingdom showed clearly that protection of images simpliciter is but embryonic there.

Henderson v Radio Corporation Pty. Limited was a passing-off action brought by a husband and wife team who were professional ballroom dancers. The defendant was a company that manufactured and distributed gramophone records. The defendant placed on the market a gramophone record intended for ballroom dancing the front cover of which featured as the background a ballroom scene in which a dancing couple became a prominent feature. The couple although not identified in any way in writing were the plaintiffs. It was alleged by the plaintiffs that the photograph conveyed the impression that the plaintiffs endorsed or sponsored the record and had been remunerated in some way for their photograph being used to publicise the record. The action was based in passing-off and the Court granted an injunction to the plaintiffs on a number of bases including that based upon the defendant’s wrongful appropriation of the plaintiffs’ professional or business reputation by falsely representing that they recommended its product. It is noteworthy that when the covers were printed, the defendant was not aware of the identity of the persons whose images appeared on the cover and had never heard of the plaintiffs. The case is important as an early decision which establishes character mechandising more closely to the tort of passing-off and is authority that there is no need for the plaintiff to be in the business of making goods to justify a passing-off suit. The simple test propounded by the Court was enunciated by Chief Justice Evatt and Justice Myers at page 593 when they said:

“In our view, once it is proved that A is falsely representing his goods as the goods of B, or his business to be the same as or connected with the business of B the role of passing-off has been established and B is entitled to relief”.

The enhanced protection available to the plaintiff through the extended formulation of passing-off is nevertheless limited by the requirement of misrepresentation. Lord Parker in A. G. Spalding  & Bros. v A. W. Gamage Limited (1915) 32 RPC 273 at 284 said that the “basis of a passing—off action (is) a false representation”  In the absence of any misrepresentation, neither passing-off nor section 52 will provide a remedy. In Newton-John v Scholl-Plough Australia Limited (1986) ATPR 40-697, the respondent advertised a range of cosmetics in an advertisement which contained a coloured photograph of a young lady who was said to bear a considerable resemblance to the applicant Olivia Newton-John. At the top of the advertisement, in very large and striking letters, were the words:

“Olivia? No Maybelline!”

The applicant suggested that the prominent photograph would attract a significant number of people as being a photograph of herself. It was alleged that although the bold words on the advertisement made it clear that the photograph was not that of Olivia Newton-John, an inference could nevertheless be drawn that the applicant was in some way connected with the advertisement. It was further alleged that in some subliminal way the alleged appropriation of the appearance of the applicant may have been deceptive. The application was dismissed by Justice Burchett who held that the printed words negatived any association. His Honour said at p.47,663:

“The applicant submits that from the appearance of someone who obviously is intended to look like Olivia Newton-John combined with the reference to her name twice in the advertisement elsewhere, the inference could be drawn that she is in some way associated with the advertisement. It is conceded it would be a matter of speculation how she is associated, but it is suggested that consumers would make that association, and some reliance is placed on a passage from a judgment of Justice Dixon as he then was, in Radio Corporation Pty.Limited v Disney (1937) 57 CLR 448 at page 457. In that citation Justice Dixon referred to representations, by a trader, of Mickey Mouse, and made the comment:

“No doubt this means the trader makes use of elements which belong to the reputation and fame of Disney’s creations, and it may be that in some vague way the buyer supposes that Disney must have sanctioned it.

It seems to me, that in the present case, the inference clearly arises that there has been an appropriation of the appearance of the applicant, and it is suggested that in some subliminal way this may be a means of deception. The difficulty, as I see it, is that this advertisement tells even the most casual reader, that even the first glance that in fact it is not Olivia Newton-John who is represented in the advertisement.

… I accept that it is legitimate to employ the argument from the subliminal effect of an advertisement, and I accept that an advertisement may be deceptive even without making any untrue statement, but that does not excuse the Court from the requirement from being able to find some indication that in fact the subliminal effect would be conveyed. It is not enough to talk about subliminal effects, it is necessary to be able to see that the case in question poses a real not remote prospect that this effect would indeed occur”.

The case is interesting as it is an express acceptance by the Court that subliminal effects of an advertisement may be deceptive within the terms of section 52 of the TPA.

In 10th Cantanae Pty. Limited v Shoshana Pty. Limited (1988) ATPR 40-833 (often cited at the Sue Smith Case), the respondent was a distributor of video recorders. In the course of its business, the respondent placed advertisements depicting a young woman in bed holding a cat and watching the screen of a television set on which appeared a picture of another woman apparently grimacing or screaming. Written across each advertisement were the words “Sue Smith just took control of her video recorder”. The smaller print conveyed information that the video recorder advertised enabled the user, “Sue Smith” in the text, easily to control the functions of the recorder itself and the television to which it was attached.

The applicant, Sue Smith, was found by the Court to be a prominent and extremely well known television  personality. The applicant succeeded at first instance but an appeal to the Full Court allowed the appeal. The conduct complained of was essentially that the applicant had without the permission of the respondent exploited her name and identity in advertising their product.  The Full Court sustained the appeal on the basis that the finding that readers would be likely to read the advertisement as containing a reference to the respondent or as being associated with her could not be sustained. The majority held that no wrong had been done because the personality was insufficiently identified.

In his dissenting judgment, Justice Gummow considered that it would be wrong to place too much emphasis on the alleged dissimilarities in appearance in evaluating the overall effect of the advertisement on readers. The following extract from his Honour’s judgment discloses an understanding of the techniques used in advertising:

“It is … of the nature of glossy advertisements of this kind that they create an impression and
evoke a response which does not proceed from a discerning analysis.

…readers of the advertisement must include many who, by reason of the wide publicity given to Sue Smith’s name would immediately associate the heavy print of the headline with the well known television personality, even though, had it not been for the presence of the headline, they would not have recognised either photograph in the advertisement as that of Sue Smith” (at 40-961).

His Honour’s dicta appears to relate directly to the technique of association adopted by modern advertisers.

Actions for passing-off misleading or deceptive conduct also failed in Honey v Australian Airlines Limited (1989) ATPR 40-961. In that case, the actions were brought by a well known amateur athlete in respect of the unauthorised use of his photograph on a poster which formed part of a series promoting and encouraging sport. The claim was based upon a breach of sections 52 and 53 of the TPA and passing-off. The applicant claimed that the use of his name and photograph on the poster indicated contrary to the fact that an association or connection existed between him and the airline and that the airline had exploited without his permission his name and identity.

The photograph was selected because it was a “work of art” a “dynamic presentation … which highlights the energy and momentum of a champion striving his upmost to achieve success”. At the bottom of the poster in small print there was a description of the sport and event, the photographer’s name, the athlete’s name and the name and logo of the airline. The Court held that passing-off was not made out and that the facts did not disclose a “typical type of advertisement in relation to the sale of goods”: the photograph was used to depict an activity and for decorative purposes. Accordingly, the Court was not satisfied that the applicant had established that a reasonably significant number of persons seeing the poster, would be drawn or would likely to draw from them the message that the applicant was giving his endorsement to Australian Airlines. In coming to the conclusion reached, the Court also said that regard must be had to the overall effect of the poster and the class of persons to whom it was directed. The Court found that it was directed to schoolchildren, members of sporting clubs and associations and that its purpose was to promote sport. The Court found that the name “Australian Airlines” was seen as nothing more than a source of the poster.

The Crocodile Dundee Case demonstrates the ambit of passing-off to restrain unauthorised character merchandising. It was there held that the respondent’s send-up of the famous “knife” scene from the movie Crocodile Dundee in advertising shoes constituted passing-off and misleading or deceptive conduct. This was based on a particular type of misrepresentation involving use of the image or indicium in question to convey the representation of a commercial connection between the applicant and the goods or services of the respondent, which connection did not exist. The applicant contended that in its advertising the respondent had used or adapted strong images from the film, and particular the “knife” scene to seek to persuade prospective purchasers of their product that it had an association with or endorsement by Paul Hogan as “Crocodile Dundee”.

The vagueness of the message did not prevent the application of the principle of passing-off or of section 52. Justice Burchett held that “vagueness is not incompatible with great effectiveness”. His Honour said “In my opinion, the deployment in circumstances of the present kind of techniques of persuasion, designed to influence prospective customers in favour of a trader or his products upon the basis of some underlying assumption which is false, may be held to be misleading or deceptive or to be likely to mislead or deceive within the meaning of Section 52, and may also be held to constitute passing-off” (at 50,349).

Justice Burchett also remarked in the course of his judgment(at 50,347) on the techniques of modern advertising:

“Character Merchandising through television advertisements should not be seen as setting off a logical train of thought in the minds of television viewers. Its appeal is nothing like the insistence of a logical argument on behalf of a product, which may persuade, but also may repel. An association of some desirable character with the product proceeds more subtly to foster favorable inclination towards it, a good feeling about it, an emotional attachment to it”. (50,348).

His Honour said “the only medium likely to convey the vague message of character merchandising, while giving it the force and immediacy of an exciting visual impact, is television. That is why the technique has grown in importance with the rise of the television industry. Its implications have hardly yet been explored in the Court. The exploration involves the application of established principles in an unfamiliar setting, where a pervasive feature is not so much the making of statements that may mislead the mind directly, as suggestions that they may inveigle the emotions into false responses”.
   
Joseph Jacob

EQUITY CHAMBERS

Footnotes:

1.  In Thompson -v- Riley McKay Pty Ltd (No. 2) (1980) 42 FLR 279 Fisher J suggested that “a statement is made either orally or in writing whereas a representation may be made either orally, in writing or pictorially”. See also Pryor -v- Given (1980) 30 ALR 189 where the Full Court of the Federal Court agreed with the conclusion of Franki J that a television advertisement, taken as a whole, was a misleading statement within s.53A(1)(b).
2. Thain, Consumer Protection Advertising – The FTC Response, 27 Bus. Law 891 (1972). See also Jones, The Cultural and Social Impact of Advertising on American Society, 1970 Law & Soc Ord 379,380.
3. Quoted in W. Scott, the Psychology of Advertising In Theory And Practice (1921)
4. See generally N. Dixon, Subliminal Perception: The Nature of A Controversy (1971)
5. Cadbury-Schweppes Pty. Limited v Pub Squash Company Pty.Limited (1980) 55 ALJR 333, at 336 per Lord Scarman (Privy Council)
6. Murumba, Commercial Exploitation of Personality (1986) at p.65