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4.3 The “Taco test”

Taco Company of Australia Inc v Taco Bell Pty Ltd,[1] involved an Australian company that had operated a Mexican restaurant called Taco Bell’s in Bondi in Sydney since 1977. A chain of Mexican restaurants of the same name had existed in the US for several years. In 1981, the US Company began operating two restaurants called Taco Bell in other parts of Sydney. The Australian company successfully took action under TPA s. 52 and under the tort of passing off.

 

While aspects of this case have been superseded, the Court in Taco Company of Australia Inc v Taco Bell Pty Ltd,[2] outlined a widely adopted, although not always expressly cited, four-step test of central relevance for the application of TPA s. 52 and thus subsequently for ACL s. 18. We will now examine this text step-by-step.

 

In the Federal Court of Australia’s July 2020 decision in Australian Competition and Consumer Commission v Kogan Australia Pty Ltd,[3] Davies J, drew upon the ‘Taco test’ and advanced a seven-step process for applying ACL s. 18 (the ‘Kogan test’). The description below of the application of the four steps of the ‘Taco test’ incorporates references to the approach articulated by Davies J’s ‘Kogan test’.

 

It is noteworthy, that at least at the time of writing, the seven-step test from Kogan has not since been applied by the Federal Court in subsequent s. 18 decisions.[4]


  1. (1982) ATPR 40-303.
  2. (1982) ATPR 40-303.
  3. [2020] FCA 1004.
  4. See e.g., ACCC v Employsure Pty Ltd [2020] FCA 1409; Telstra Corporation v Singtel Optus Pty Ltd [2020] FCA 1372; TPG v ACCC (2020) 384 ALR 496; ACCC v TPG Internet Pty Ltd (2020) 381 ALR 507 (note the final two listed cases are Full Federal Court decisions.).
  5. (1982) 42 ALR 177, 202.
  6. (1981) ATPR 40-219.
  7. Handley v Snoid (1981) ATPR 40-219, 42-975.
  8. (1982) 149 CLR 191, at 199.
  9. Australian Competition and Consumer Commission v Kogan Australia Pty Ltd [2020] FCA 1004 [10].
  10. (1982) 42 ALR 177, 202.
  11. (2000) 202 CLR 45.
  12. [2004] FCA 516.
  13. [2004] FCA 1047.
  14. Seven Network Ltd v News Interactive Pty Ltd [2004] FCA 1047, at para 13.
  15. (2016) 118 IPR 239.
  16. Citing Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 [102]-[103].
  17. (2015) 330 ALR 67.
  18. [2017] FCA 709.
  19. (2013) 249 CLR 435.
  20. See ACCC v Trading Post Australia Pty Ltd (2011) 197 FCR 498 [122].
  21. (2019) 368 ALR 441.
  22. (2000) 202 CLR 45.
  23. .au Domain Administration Ltd v Domain Names Australia Pty Ltd [2004] FCA 424, at para 21.
  24. (2000) 202 CLR 45.
  25. (2000) 202 CLR 45.
  26. [2004] FCA 424.
  27. (1982) ATPR 40-303, at 43-752.
  28. (2005) ASAL 55-147.
  29. Australian Competition and Consumer Commission v Kogan Australia Pty Ltd [2020] FCA 1004, [11]-[15].
  30. (2020) 381 ALR 507.
  31. See ACCC v TPG Internet Pty Ltd (2020) 381 ALR 507 [23].
  32. See ACCC v TPG Internet (2020) 381 ALR 507 [23](g).
  33. (2003) 202 ALR 24.
  34. (2004) 207 ALR 521.
  35. (2016) 118 IPR 239.
  36. [2017] FCA 709.
  37. (1982) 42 ALR 177, 202.
  38. [2004] FCA 1047, at 31.
  39. Australian Competition and Consumer Commission v Kogan Australia Pty Ltd [2020] FCA 1004, [16].
  40. (1982) 42 ALR 177, 203.
  41. (1978) 140 CLR 216.
  42. [2004] FCA 424, at 12.
  43. (1978) 140 CLR 216.
  44. Hornsby Building Information Centre v Sydney Building Information Centre (1978) 140 CLR 216, at 230.
  45. [2020] FCA 1409.

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Svantesson on the Law of Obligations Copyright © 2022 by Dan Svantesson is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.

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