Dermapenworld Pty Ltd v Dermapen IP Holdings LLC
[2022] FCA 1094
•14 September 2022
FEDERAL COURT OF AUSTRALIA
Dermapenworld Pty Ltd v Dermapen IP Holdings LLC [2022] FCA 1094
File number: NSD 731 of 2022 Judgment of: YATES J Date of judgment: 14 September 2022 Catchwords: PRACTICE AND PPROCEDURE – application for confirmation of service outside Australia of originating application and other documents – whether criteria in rules 10.43 and 10.44 of the Federal Court Rules 2011 (Cth) satisfied–application granted Legislation: Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)) s 18, Ch 2 Pt 2-1
Competition and Consumer Act 2010 (Cth) ss 5(1), 6(3), 131(1)
Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (concluded on 15 November 1965) Art 31
Federal Court Rules 2011 (Cth) rr10.42, 10.43(4)(a) – (c), 10.43(6), 10.43(7)(a),10.43(7)(b)(ii) – (iii),10.43(7)(c), 10.44(3), 10.44(4)(a)(ii) – (iii), 10.44(4)(b)
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 30 Date of last submissions: 14 September 2022 Date of hearing: 9 and 12 September 2022 Counsel for the Applicant on 9 September 2022:
Counsel for the Applicant on 12 September 2022:
Mr D L Williams SC with Mr I Latham
Mr I Latham
Solicitor for the Applicant: McEvoy Legal Counsel for the First Respondent: The First Respondent did not appear Counsel for the Second Respondent: The Second Respondent did not appear ORDERS
NSD 731 of 2022 BETWEEN: DERMAPENWORLD PTY LTD ACN 146 962 030
Applicant
AND: DERMAPEN IP HOLDINGS LLC
First Respondent
APPLE INC
Second Respondent
ORDER MADE BY:
YATES J
DATE OF ORDER:
14 SEPTEMBER 2022
THE COURT ORDERS THAT:
1.Service of the originating application on the first respondent, and on the second respondent, be confirmed under r 10.43(6) of the Federal Court Rules 2011 (Cth) (the Rules).
2.Service of the following documents on the first respondent, and on the second respondent, be confirmed under r 10.44(3) of the Rules:
(a)Statement of Claim dated 7 September 2022;
(b)Interlocutory Application dated 7 September 2022;
(c)Applicant’s Genuine Steps Statement dated 7 September 2022;
(d)Affidavit of Shaun Victor Kerrigan dated 6 September 2022;
(e)Affidavit of Xiao Jing Janice Sher dated 6 September 2022;
(f)Affidavit of Daniel Weinberg dated 7 September 2022;
(g)Orders of 7 September 2022.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
YATES J:
This is an application for confirmation of service outside Australia of an originating application and other documents (which I identify below) under rr 10.43(6) and 10.44(3) of the Federal Court Rules 2011 (Cth) (the Rules).
The applicant is a developer of iOS applications (apps) supplied on the second respondent’s App Store, including an app called “DP4”. This app is a component of an automatic microneedle therapy system which includes a microneedling pen device. The system utilises cloud services. The app provides a communication channel and acts as a “translator” between the pen device and the cloud services.
Recently, the second respondent removed DP4 from the App Store. It did so because of a complaint made by the first respondent on 1 June 2022. The complaint was that the supply of DP4 infringes the first respondent’s intellectual property rights—specifically, its trade mark rights. The complaint was couched in these terms:
Our company has a Federal Court Judgment against Dermapenworld and permanent injunction enjoining Dermapenworld and its affiliate’s from using the registered trademark “Dermapen” in commerce. Accordingly, their use of our trademark dermapen on the app store is in direct violation of the injunction and is infringing upon our trademark rights.
(As in original.)
The Federal Court Judgment referred to is, apparently, a judgment of the United States District Court in and for the District of Utah, Central Division given on 8 May 2017 in proceedings to which, on the evidence presently before me, the applicant was not a party. Moreover, the injunction was in respect of the trade mark DERMAPEN, not DP4. In the course of the hearing of the present application, I was informed that Biosoft (Australia) Pty Ltd is a different corporate entity to, and should not be confused with, the company named Biosoft (Aust) Pty Ltd, which was a party to the proceeding.
Correspondence by email ensued between the applicant, the first respondent, and the second respondent. In that correspondence, the applicant sought to persuade the second respondent that the first respondent had not obtained an injunction against it and that, in fact, the applicant had been granted a licence by Biosoft (Australia) Pty Ltd to use the trade marks DERMAPEN and DP4. The evidence before me is that Biosoft (Australia) Pty Ltd holds various registrations for those marks, including US Trademark 5568 344 for the mark DP4.
In a letter dated 18 July 2022 from the applicant’s solicitors to the first respondent and the second respondent, the applicant’s solicitors stated that the applicant “owns the trademark DP4 under license” and that the second respondent did not have an injunction against the applicant (an Australian company) but against “Dermapenworld, the US LLC which is a Florida company”.
In a letter dated 3 August 2022, addressed to the applicant and the second respondent, and sent by email, the first respondent and Derma Pen, LLC disputed the fact that an injunction had not been granted against the applicant. They asserted that many of the issues raised by the applicant’s solicitors in the 18 July 2022 letter were “erroneous” and “blatant fabrications”.
Correspondence from the second respondent, also sent by email, impressed on the applicant that it was its responsibility to resolve the complaint directly with the first respondent. However, a resolution did not eventuate. Indeed, it is difficult to see how it could eventuate. On 31 August 2022, the second respondent sent an email to the applicant stating:
Your app was removed from sale by Apple because we did not receive confirmation from Derma Pen IP Holdings LLC agreeing that this matter had been resolved. However, upon receipt of written notification from Derma Pen IP Holdings LLC agreeing that the changes made to your app resolve this matter to Derma Pen IP Holdings LLC’s satisfaction, we may return your app to the App Store. Please notify Derma Pen IP Holdings directly of your changes and have Derma Pen IP Holdings LLC email us at [email protected].
The applicant’s case, as pleaded in its statement of claim, is that, in its complaint on 1 June 2022, and in its letter dated 3 August 2022, the first respondent made representations that were misleading or deceptive, or likely to mislead or deceive, contrary to s 18 of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth) (the Competition and Consumer Act)). The applicant alleges, further, that the second respondent was knowingly involved in the first respondent’s contraventions in that it: (a) aided or abetted the first respondent’s contraventions: (b) was directly or indirectly knowingly concerned in those contraventions; (c) was aware that the representations were made in trade or commerce, were misleading and deceptive, and were communicated by postal, telegraphic or telephone services; and that it (d) associated itself with the first respondent’s conduct.
In its originating application, the applicant claims, as final relief, a declaration that the first respondent contravened s 18 of the Australian Consumer Law, and a declaration that the second respondent was involved in the first respondent’s contraventions. It seeks damages against both respondents. The applicant also seeks an order restraining the second respondent from removing DP4 from the App Store, even though the app has already been removed. Importantly, the applicant seeks, by way of interlocutory relief, a mandatory injunction against the second respondent requiring it to reinstate DP4 on the App Store pending further hearing of the matter.
In order to confirm service of the originating application under r 10.43(6), I must be satisfied that: the Court has jurisdiction in the proceeding; the proceeding is of a kind mentioned in r 10.42; and that the applicant has a prima facie case for all or any of the relief claimed in the proceeding (see r 10.43(7)(a) of the Rules with reference to r 10.43(4)(a) to (c)). I must be satisfied that service was permitted by, amongst other things, the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965 (the Hague Convention) or the law of the foreign country in which service was effected: r 10.43(7)(b)(ii) and (iii) of the Rules. I must be satisfied that there is a sufficient explanation for the failure to apply for prior leave to serve the originating application.
In order to confirm service of other documents under r 10.44(3), I must be satisfied that service was permitted by, amongst other things, the Hague Convention or the law of the foreign country in which service was effected: rr 10.44(4)(a)(ii) and (iii) of the Rules. I must also be satisfied that there is a sufficient explanation for the failure to apply for prior leave to serve the documents: r 10.44(4)(b) of the Rules.
It is convenient to commence with the question of service. The evidence before me is that Australia and the United States of America are signatories to the Hague Convention. The United States has made a declaration in respect of Article 31 of the Hague Convention that it has no objection to private service of documents, if effective under applicable law, provided no compulsion is used.
The applicant’s solicitors instructed agents in Utah in the United States to serve the first respondent and the second respondent personally with the documents identified as:
(a)Statement of Claim;
(b)Genuine Steps Statement;
(c)Interlocutory Application;
(d)Affidavit of Shaun Victor Kerrigan with Exhibits;
(e)Affidavit of Xiao Jing Janice Sher with Exhibits;
(f)Originating Application;
(g)Order; and
(h)Affidavit of Daniel Weinberg.
I infer that the documents in (a) to (f) and (h) are the documents to which my attention was directed on 7 September 2022, and to which I was taken for the purposes of the present application on 9 September 2022. I infer that the Order is the orders made by the Court on 7 September 2022, to the effect that the originating application and interlocutory application be returnable instanter and that the proceeding stand over to 9 September 2022 at 2.30 pm. Those orders also noted that the applicant proposed to effect service of the originating application, the interlocutory application, and the other documents on the first respondent and the second respondent, and to seek confirmation of service on 9 September 2022 at 2.30 pm. I note that the relief claimed in the interlocutory application now appears to have been overtaken by the fact of service.
On 8 September 2022, Chris Taylor, an employee of the law firm of Anderson & Karrenberg personally served the originating application and other documents on:
(a)the first respondent at its premises at 1002 East South Temple, Suite 308, Salt Lake City, Utah. This is the address appearing on the first respondent’s letter dated 3 August 2022; and
(b)the second respondent, by delivery c/- CT Corporation System, 1108 E. South Union Avenue, Midvale, Utah.
The evidence before me is that CT Corporation System is the second respondent’s registered agent for the purposes of serving legal process on the second respondent in Utah.
The applicant relies on affidavits made by Stephen P Horvat. Mr Horvat is an attorney at Anderson & Karrenberg who is licensed to practise law in Utah, and who has also been licensed to practise law in California. Mr Horvat has deposed that the delivery of the originating application and the other documents, as described above, is effective service on the first respondent, and on the second respondent. In light of this evidence, I am satisfied of the matters referred to in rr 10.43(7)(b) and 10.44(4)(a).
In addition, I note that Anderson & Karrenberg engaged a process server to deliver the originating application and the other documents to the second respondent at 20705 Valley Green Drive, Cupertino, California. The evidence before me is that this is the address in Cupertino at which the second respondent accepts service of legal process. The originating application and other documents were delivered to the receptionist at that address on 8 September 2022.
Further, the applicant’s solicitors emailed the originating application and the other documents to the:
(a)first respondent on 9 September 2022, using the first respondent’s email address that was used when making its complaint to the second respondent, and in subsequent email correspondence between the applicant, the first respondent, and the second respondent;
(b)second respondent on 8 September 2022, using the email address [email protected], which is an email address given in the second respondent’s published law enforcement guidelines; and
(c)second respondent, on 9 September 2022 using the email address [email protected], which is the email address used by the second respondent in correspondence with the applicant and the first respondent in relation to the first respondent’s complaint.
On the basis of the matters referred to in [16] to [20], I am satisfied that the first respondent and the second respondent are on notice of the commencement of this proceeding and of the orders made on 7 September 2022.
As to the question of jurisdiction, the causes of action pleaded in the statement of claim are based on contraventions of the Australian Consumer Law. The Australian Consumer Law applies as a law of the Commonwealth to the conduct of corporations, including foreign corporations: s 131(1) of the Competition and Consumer Act.
Section 5(1) of the Competition and Consumer Act extends the operation of the Australian Consumer Law to conduct engaged in outside Australia by bodies corporate carrying on business within Australia. I am satisfied that the second respondent is carrying on business within Australia. Amongst other things, it deals with “providers” in Australia, such as the applicant, and makes available to them the facility of the App Store as a platform to enable apps developed by such providers to be downloaded to smart phones and other electronic devices, including the smart phones and electronic devices of users of apps in Australia.
Further, s 6(3) of the Competition and Consumer Act gives effect to the provisions of Ch 2 Pt 2-1 of the Australian Consumer Law (which includes s 18) as if those provisions were confined in their operation to engaging in conduct to the extent to which the conduct involves, amongst other things, the use of postal, telegraphic and telephonic services. The representations which the applicant contends constitute conduct in contravention of s 18 of the Australian Consumer Law were made in correspondence passing between the applicant, the first respondent, and the second respondent by email, and thus conduct involving the use of telephonic services.
For these reasons, the Court has jurisdiction in the proceeding and the requirement of r 10.43(4)(a) is satisfied.
I am satisfied that the proceeding is of a kind mentioned in r 10.42—namely, that the proceeding is based upon a contravention of an Act (wherever occurring) seeking relief in relation to damage suffered wholly or partly in Australia: Item 13 in the table to r 10.42. I note that other items in the table may also apply. The requirement of r 10.43(4)(b) is satisfied.
Rule 10.43(4)(c) requires that the Court must be satisfied that the party seeking leave or confirmation has a prima facie case for all or any of the relief claimed in the proceeding. This rule is applied literally. It does not require that the party seeking leave or confirmation to establish that it has a prima facie case for all the relief claimed in the proceeding.
I am satisfied that the applicant has established a prima facie case that the making of the representations pleaded in paragraph 9 of the statement of claim constitute misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law and that, as a consequence, it has a prima facie case for relief based on that contravention—namely declaratory relief and damages against the first respondent: see prayers 2 and 5 of the originating application. These findings are sufficient to satisfy r 10.43(4)(c).
As to rr 10.43(7)(c) and 10.44(4)(b), I am satisfied that the applicant has provided a sufficient explanation for failing to apply for prior leave. The removal of DP4 from the App Store has created a situation of urgency for the applicant. There is evidence before me of the practical and financial effects of the withdrawal of the app for supply. The applicant commenced this proceeding urgently with a view to persuading the Court to grant the interlocutory relief it seeks in prayer 1 of the originating application. When the applicant was first before the Court on 7 September 2022, it was not in a position to move the Court for leave to serve the first respondent and the second respondent outside Australia. However, it had hoped that, by informing the first respondent and the second respondent of the commencement of this proceeding at the earliest opportunity, and by personally serving the first respondent and the second respondent with the originating application and the other documents without leave in the meantime, the first respondent and the second respondent might submit to the jurisdiction of the Court and appear when the matter was before the Court on 9 September 2022. As events have transpired, the first respondent and the second respondent did not appear on 9 September 2022.
In all the circumstances, I am satisfied that service of the originating application on the first respondent and the second respondent should be confirmed under r 10.43(6) of the Rules. I am also satisfied that service of the other documents on the first respondent and the second respondent should be confirmed under r 10.44(3) of the Rules.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Yates. Associate:
Dated: 14 September 2022
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