Caterpillar Inc v Sun Forward Pty Ltd

[1996] FCA 1187

CATCHWORDS

Practice and Procedure - Appeal - Interlocutory judgment included final orders - Whether leave to appeal should be granted - Whether leave should only be granted if the judgment appealed from is attended by doubt and substantial injustice would result if leave is refused - Whether leave should be granted if special considerations warrant the grant of leave.

Federal Court of Australia Act 1976 (Cth) s 24(1A)

Cases

Niemann v Electronic Industries Limited [1978] VR 431
Decor Corporation v Dart Industries Inc (1991) 33 FCR 397
Jarrett v Seymor (1993) 46 FCR 557
Minnesota Mining and Manufacturing Company v C. Jeffries (1992) 37 FCR 294

VG185\1996 CATERPILLAR INC., AND DESERT STORM MANAGEMENT
PROPRIETARY LIMITED V. SUN FORWARD PTY. LTD.

COURT:MERKEL J

PLACE:MELBOURNE

DATE:        9 December 1996

IN THE FEDERAL COURT
OF AUSTRALIA
VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION  No. VG 185 of 1996

BETWEEN:

CATERPILLAR INC.      First Applicant

DESERT STORM MANAGEMENT
  PROPRIETARY LIMITED
  (ACN 003 356 474)     Second Applicant

and

SUN FORWARD PTY. LTD.
  (ACN 064 840 115)           Respondent

COURT:MERKEL J

PLACE:MELBOURNE

DATE:        9 December 1996

REASONS FOR JUDGMENT

On 20 November 1996 on a motion for judgment of the applicants under Order 20 Rule 1 Drummond J made the following orders and declarations -

1. The importing by the respondent of Caterpillar branded Logger boots into Australia without the licence of the first applicant bearing a reproduction of the first applicant's Raised Sprocket Tractor logo (as defined in paragraph 13 of the amended statement of claim herein) ("the Raised Sprocket Tractor logo") constitutes an infringement of the copyright of the first applicant.

1. The respondent, whether by itself, its employees or agents or howsoever otherwise, has passed off, is continuing to pass off and has threatened to pass off footwear as and for footwear manufactured by or under the authority of the first applicant and imported and distributed in Australia by the second applicant by promoting, offering for sale and selling footwear in the following get-up:

(a)footwear packaged in a box bearing the expressions "GAT" or "GAT Walking Stage" with or without a depiction of a tank device;

(the "GAT get-up")

1. The promotion, offering for sale and sale by the respondent whether by itself, its employees or agents or howsoever otherwise of footwear under or by reference to the GAT get-up constitutes conduct which is
   misleading or deceptive or which is likely to mislead and deceive in contravention of s 52 of the Trade Practices Act 1974 (Cth).

1. The respondent, whether by itself, its employees or agents or howsoever otherwise by promoting, offering for sale and selling footwear under or by reference to the GAT get-up has:

(a)falsely represented that the said footwear has the sponsorship or approval of one or both of the applicants;  and

(b)represented falsely that the respondent has a sponsorship, approval or affiliation with one or both of the applicants;

in contravention of the provisions of s 53(c) and (d) of the Trade Practices Act 1974 (Cth).

1. The applicants have leave to discontinue the proceeding insofar as it makes claims not disposed of by these orders.

1. Upon the applicants by their counsel undertaking to file a notice of discontinuance of the proceeding forthwith insofar as it makes claims not disposed of by these orders ("the undertaking to discontinue") the respondent be and is hereby restrained whether by itself, its employees, or agents or howsoever otherwise without the licence of the first applicant from:

(a)(i)   importing for the purpose of sale or by way of trade offering or exposing for sale;

(ii)selling or by way of trade offering or exposing for sale;

(iii) exhibiting in public by way of trade;

Caterpillar branded Logger boots bearing a substantial reproduction of the first applicant's Raised Sprocket Tractor logo;

(b)passing off footwear under or by reference to the GAT get-up or any get-up deceptively or misleadingly similar thereto or constituting merely a colourable imitation thereof as and for the footwear manufactured by or under the authority of the first applicant and imported and distributed by the second applicant;

(c)promoting, offering for sale and selling footwear under or by reference to the GAT get-up or any get-up deceptively or misleadingly similar thereto or constituting merely a colourable imitation thereof in trade or commerce in Australia;

(d)(i)   representing that footwear promoted, offered for sale and sold under or by reference to the GAT get-up  or any get-up deceptively or misleadingly similar thereto or constituting merely a colourable imitation thereof has the sponsorship of approval of one or both of the applicants;

(ii)representing that the respondent has in connection with the promotion or sale of footwear under or by reference to the GAT get-up or any get-up deceptively or misleadingly similar thereto or constituting merely a colourable imitation thereof, a sponsorship, approval or affiliation with one or both of the applicants.

1. Unless the respondent files and serves a notice of motion and all material to be relied upon by it on or before 22 November 1996 seeking an order that it be at liberty, on such terms and conditions as the Court may impose, to retain and sell all footwear, promoted, offered for sale and sold under or by reference to the GAT get-up or any get-up deceptively or misleadingly similar thereto or constituting merely a colourable imitation thereof, the respondent deliver up to the applicants for destruction:

(a)all of the said footwear in its possession, power, custody or control or that of its employees or agents;

(b)all signs, signage, cards, advertising and promotional material, labels, packaging, catalogues, price lists, brochures and other documents and materials in the possession, power, custody or control of the respondent or its employees or agents
relating to the advertising, promotion or sale of the said footwear;

such delivery to occur on or before 25 November 1996 and to be verified by affidavit filed and served or before 29 November 1996.

1. The respondent deliver up to the first applicant any footwear of the respondent bearing a substantial reproduction of the first applicant's Raised Sprocket Tractor logo;  such delivery to occur on or before 25 November 1996 and be verified by affidavit filed and served on or before 29 November 1996.

1. The goods the subject of a notice of seizure to objector dated 14 March 1996 be forfeited to the Commonwealth for destruction.

1. There be interlocutory judgment for the applicants for damages to be assessed or, at the applicants' option, for an account by the respondent of the profits made by it by passing off the footwear promoted, offered for sale and sold under or by reference to the GAT get-up or any get-up deceptively or misleadingly similar thereto or constituting merely a colourable imitation thereof, as and for footwear of the applicants.

1. There be interlocutory judgment for the first applicant for damages (including additional damages pursuant to

s 115(4) of the Copyright Act 1968 and damages for conversion pursuant to s 116 of the said Act) to be assessed, or, at the first applicant's option for an account by the respondent of the profits made by it by infringing the first applicant's copyright in the Raised Sprocket Tractor logo.

1. There be interlocutory judgment for the applicants for damages to be assessed pursuant to s 82 of the Trade Practices Act 1974 for the contravention of the respondent of ss 52 and 53(c) and (d) of the said Act.

1. The directions hearing herein be adjourned to 9 am on the 9th day of December 1996 for the giving of directions as to the making of any enquiries as to damages or the taking of any accounts of the respondent's profits.

1. The applicants' notice of motion be otherwise dismissed.

1. (a)   the respondent pay two-thirds of the applicants' costs of the notice of motion herein dated 13 June 1996 save that the respondent shall pay the whole of the applicants' costs of the notice of motion of today 20 November 1996;

(b)the respondent otherwise pay the applicants' costs of and incidental to the proceeding (including costs reserved).

1. Liberty to any party to apply on not less than 72 hours notice in writing.

I presently have two applications before me.  The first is a motion of the respondent for leave to appeal in relation to paragraphs 2, 3, 4, 6(b), (c), (d), 7, 10, 12 and 15 of the orders and declarations of his Honour. 

Those orders and declarations comprise final orders in relation to claims in passing off and for the contravention of ss 52 and 53(d) and (d) of the Trade Practices Act 1974 (Cth) and consequential interlocutory orders. As the orders and declarations made by Drummond J included interlocutory orders in relation to damages and an account for profits, they did not finally dispose of the proceeding. Accordingly, the judgment is an interlocutory one and leave to appeal is necessary: see Computer Edge Proprietary Limited v Apple Computer Inc (1984) 54 ALR 767 at 768 and Miki Shoko Company Limited v Merv Brown Proprietary Limited 1988 Australian Trade Practices Reporter case 40/858.  Both parties accepted that leave to appeal was necessary.

The applicants oppose the grant of leave to appeal.  They contend that leave is only to be granted if the Court is satisfied that the judgment appealed from is attended by sufficient doubt to warrant it being reconsidered and substantial injustice would result if leave were refused:  see Niemann v Electronic Industries Limited [1978] VR 431,

However, as the Full Courts observed in Decor Corporation v Dart Industries Inc (1991) 33 FCR 397 and Jarrett v Seymor(1993) 46 FCR 557 559, there may be cases which raise special considerations. In such cases the criteria referred to in Niemann and relied upon by the applicants might not be appropriate.  The present matter is such a case.  The substantive orders made in paragraph's 2, 3, 4, 6(b), (c) and
(d) and 7 are final orders in respect of which the respondent would have a right of appeal but for the interlocutory judgments for damages or an account of profits in respect of the passing off and section 52 and 53 causes of action.

The final orders not only affect but finally determine substantive rights and grant final injunctive relief on that basis.  In such circumstances the issue is whether in all the circumstances it is in the interests of justice that leave to appeal be granted at this stage or be deferred over until after the hearing and determination of the interlocutory judgment for damages and an account of profits.  A number of factors have led me to conclude that leave should be granted now rather than later. 

This is not a case in which the parties have agreed to split the hearing between liability and quantum.  The respondent was not, in those circumstances, the author of its present problem.  The respondent was subjected to a claim for summary judgment under Order 20 Rule 1. The fact that it took the form of final and interlocutory relief did not arise from any conduct on its part; rather, it arose from the pursuit of final and interlocutory judgments by the applicants. 

Secondly, the final judgment prevents the respondent from selling or marketing certain goods.  As a consequence its rights and obligations in that regard have been finally determined.  Prima facie, it should be entitled to pursue its rights of appeal earlier rather than later unless good reason is shown to the contrary.  No good reason was shown as to why it is in the interests of justice for the respondent to be prevented from pursuing an appeal until after the interlocutory judgments for damages or an account of profits have been determined.

Thirdly, the grant of leave does not operate as a stay of proceedings and will not prejudice the further hearing of the proceeding unless a stay is granted.  If an application for a stay is made that application will be determined on its merits.

Fourthly, the grant of leave will entitle the respondent to pursue its rights now, rather than later, and thereby enable an earlier determination of those rights and obligations without injustice to either party. 

Accordingly the special circumstances of the present case warrant the grant of leave to appeal. 

I would add that had I not concluded that the present case fell into the special case exception in Decor and Jarrett I would have granted leave to appeal on the basis of the general principles stated in Niemann  in any event.  As the Full Court noted in Decor at 400 leave to appeal is more readily granted in cases determining or affecting substantive rights.

The second application before me is that of the applicants for orders enabling them to prosecute their separate and independent interlocutory judgment for breach of copyright. Under ss 115 and 116 of the Copyright Act, the applicant will be required to elect in due course between alternative entitlements to damages or an account of profits. The applicants seek interlocutory orders for discovery to enable them to exercise that election on an informed basis.

The applicants rely upon the judgment of Sheppard J in Minnesota Mining and Manufacturing Company v C. Jeffries(1992) 37 FCR 294 at 296. His Honour made orders for discovery in a patent infringement action to enable the applicant to be in an informed position after discovery and prior to trial to elect between its remedies in damages and an account for profits. The respondent opposed the orders sought but could not point to any authority conflicting with Minnesota Mining or to any good reason why discovery should be refused.

The applicants formulated orders which are likely to put them in a position to make their election after discovery.  It is not suggested by the respondent that the orders are oppressive or go beyond the legitimate requirements of the occasion.  Accordingly I propose to make the orders sought subject to the modifications discussed in argument.  I make the following orders:

(1)I grant the respondent leave to appeal against the orders in paragraphs 2, 3, 4, 6(b), (c) and (d), 7, 10, 12 and 15 of the orders of Drummond J made on 20 November 1996;

(2)I make orders for discovery as set out in the proposed form of order which has been handed to me by counsel, as initialled and altered by me.

I certify that this and the preceding 7  pages are a true copy of the Reasons for Judgment of the Honourable Justice Merkel.

Associate:

Date:

HEARD:9 December 1996

PLACE:Melbourne

JUDGMENT:     9 December 1996

APPEARANCES:  Mr. D. Shavin Q.C. with Ms. E. Strong instructed by Freehill Hollingdale & Page appeared for the applicants.

Mr A. Ogborne instructed by Kenneth K.S. Wee Solicitor and Attorney appeared for the respondent.