Diesel SPA v Ur-Rehman
[2005] VSC 254
•20 July 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
INTELLECTUAL PROPERTY LIST
No. 9301 of 2004
| DIESEL SPA | First Plaintiff |
| DIESEL WHOLESALE PTY LTD (ACN 066 175 219) | Second Plaintiff |
| v | |
| ATTIQUE UR-REHMAN | First Defendant |
| WASEEM ASIF | Second Defendant |
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JUDGE: | HARPER J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 1 JULY 2005 | |
DATE OF JUDGMENT: | 20 JULY 2005 | |
CASE MAY BE CITED AS: | DIESEL SPA & ANOR v UR-REHMAN & ANOR | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 254 | |
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TRADE MARKS – Application for final judgment – alleged infringement of trade marks and copyright – additional claims in passing off and for breach of s.9 of the Fair Trading Act 1999 – whether defendants should be given leave to defend – whether the defendants have discharged the burden of satisfying the court that there is a question that ought to be tried.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr E. Heerey | Middletons Lawyers |
| The Defendants in person |
HIS HONOUR:
This proceeding was commenced by a generally endorsed writ which was issued on 26 November 2004. A statement of claim was filed on 22 February 2005. By it, the plaintiffs allege (among other things) that the first plaintiff has not only designed, manufactured, and traded in clothing and clothing accessories which are sold around the world under the name "Diesel" but is also the owner of nine Australian registered trade marks which at all material times have been of full force and effect. These are displayed on its clothes, including footwear. The second plaintiff has since 1994 been licensed by the first plaintiff as the exclusive Australian distributor of the relevant products.
The trade marks the subject of this proceeding are illustrated in a table forming part of paragraph 7 of the statement of claim. The table also contains the Australian trade mark number of each mark, and describes the class or classes in which each trade mark is registered. One of them, however (that to which the number 901972 has been allocated) is no longer the subject of any claim.
The plaintiffs also allege that the first plaintiff is the owner of the copyright in original artistic works in which copyright exists by virtue of Part III of the Copyright Act 1968. According to the statement of claim, the defendants have from a date unknown and up to and beyond the issue of the writ dealt in clothing to which or in relation to which there has been applied:
(a)one or more signs which are substantially identical with or deceptively similar to one or more of the first plaintiff's trade marks; and
(b)the copyright works or a reproduction or substantial reproduction of them.
The plaintiffs allege that the defendants have traded in clothing in breach of the plaintiffs' copyright, and in a manner which constitutes an infringement of the trade marks the subject of this proceeding. They have, on 17 June, filed a summons for judgment pursuant to r.22.02(1) and affidavit material in support of these claims. Copies of the relevant extracts from the Australian Trade Mark Register are exhibited to an affidavit sworn by Anthony Brooke Watson on 25 November 2004 (trade mark registered No. 901972 is not the subject of these exhibits). The same deponent, in an affidavit sworn on 17 June 2005, swears to his belief that employees of, or independent consultants engaged by, the first plaintiff created the artistic works in respect of which copyright is claimed; and (the first plaintiff having its headquarters in Italy) the plaintiffs rely upon the Copyright (International Protection) Regulations 1969, by which copyright protection is afforded in Australia to works whose authors or makers are citizens or residents of Berne Convention countries. Italy is, and has since 1887 been, a member of that Convention.
By paragraph 17 of their defence, the defendants admit that the plaintiffs have established a substantial, exclusive and valuable reputation and goodwill in Australia based upon their trade marks and their copyright in the artistic works. For their part, the plaintiffs have sworn to their belief that “the defendants have no defence to the whole of the claims made in the statement of claim”.[1]
[1]Affidavit of Caitlin Denham sworn 17 June 2005 at para. 16. See too the affidavit of Anthony Brooke Watson also sworn 17 June, where at para. 12 he swears, rather more elegantly, to his belief that the defendants “have no defence to any of the claims made by the plaintiff”.
The plaintiffs have filed affidavits which depose to the first defendant's sale of counterfeit "Diesel" goods on 24 November 2004 at the South Melbourne Market: see the affidavit of Sanjiv Marcus Priyajith de Alwis affirmed on 25 November 2004, and the affidavit of Mr Watson of the same date. Additional affidavit material has been filed deposing to the attendance of representatives of the plaintiffs at premises not only at the South Melbourne Market but also at 8 Arthur Phillip Drive Endeavour Hills (occupied by both defendants) and at 12 Roosevelt Street Coburg (occupied by the first defendant) – in each case the occupation being, in part at least, for the purposes of trading in counterfeit "Diesel" clothing. In addition to the South Melbourne purchases referred to above, quantities of such goods were, pursuant to an Anton Piller order, seized at the other two addresses: see the affidavits of Mr Watson sworn on, respectively, 25 November 2004 and 6 December 2005, and those of Travis Robert Payne, Caitlin Denham and Melville John Speers, each of which was sworn on 17 June 2005. In her affidavit sworn on 21 June 2005, Victoria Evans deposes to trade by the second defendant in “Diesel” clothing from the “Caribbean Gardens” Market in Scorseby. Another affidavit, on this occasion sworn by Catherine Laura Emily Cahill on 1 July 2005, confirms that all but one of the garments seized in execution of the Anton Piller order bore a logo or logos in breach of the first plaintiff’s copyright.
The first defendant has admitted by paragraph 3 of the defence that he is and at all material times was conducting, under the name "Auzziway Fashion", a retail clothing business from Stall 38 at the South Melbourne Market and a wholesale clothing business from each of the Coburg and Endeavour Hills premises. Perhaps because the particular assertions were not made until after the defence was delivered,[2] the second defendant did not plead, and has not pleaded, to the allegations, contained in paragraph 3A of the statement of claim, that he operated similar businesses from (on the one hand) a stall at the “Caribbean Gardens” Market (retail) and (on the other) Endeavour Hills (wholesale). Both defendants have admitted, by paragraph 4 of the defence, that they are and at all material times were engaged in trade and commerce within the meaning of that expression in the Fair Trading Act 1999.
[2] It appears that the defence, which was issued on 18 February 2005, was filed in response not to the statement of claim, which was not issued until 22 February 2005, but to the general endorsement on the Writ.
The plaintiffs submit that, given those admissions and given the evidence of the defendants' trade in the plaintiffs' clothing, the defendants have passed off that clothing as "Diesel" clothing and as having the sponsorship and approval of, or a connection or affiliation in the course of trade with, the plaintiffs. It is also submitted that by their trade in "Diesel" products, the defendants are in breach of the Fair Trading Act. In further support of these submissions, the plaintiffs rely upon the affidavit of Victoria Evans sworn on 25 November 2004. Ms Evans there deposes to an offer by the first defendant to sell her 700 units of "Diesel" branded T-shirts.
In her affidavit of 17 June 2005, Caitlin Denham deposes to the fact that on 29 November 2004, 178 "Diesel" branded T-shirts were seized by representatives of the plaintiffs from the premises at Endeavour Hills. The plaintiffs submit that an obvious and natural inference arises from this. Given the offer to sell 700 T-shirts to Victoria Evans on 9 November 2004 and the seizure of 178 items of such clothing three weeks later, I should (the plaintiffs submit) infer that in the meantime the defendants sold the remaining 522 items.
I do not accept this submission. It does not follow, even on the balance of probabilities, that because an offer was made on one day to sell a certain number of garments and, a few days later, a smaller quantity was seized, that in the meantime the garments making up the difference were sold. An alternative hypothesis is that, while remaining in the same ownership, they were removed from the site from which the seizure was effected. Even should I infer that some were sold, the assessment of the number thus disposed of would be pure speculation.
Otherwise, however, it seems to me that, on the affidavit material upon which they rely, the plaintiffs have established a prima facie case that the defendants have dealt in clothing bearing trade marks which are owned by the first plaintiff and which the second plaintiff is and was authorised to use. The defendants have also, on the evidence, prima facie dealt in clothing to which or in relation to which there has been applied works or a reproduction or a substantial reproduction of them the copyright in which is held by the first plaintiff. It follows that there is now before the Court prima facie evidence that the defendants have been guilty of passing off the plaintiffs’ products as their own, and of a breach of s.9 of the Fair Trading Act.
In their defence as pleaded, the defendants have admitted their engagement in trade and commerce within the meaning of that expression in the Fair Trading Act. The first defendant has admitted involvement in the clothing trade, and by an affidavit sworn on 27 June 2005 has inferentially admitted dealing in “Diesel“ goods. By contrast, the second defendant – while not denying that he trades in clothing - has by an affidavit also sworn on 27 June denied his involvement in “manufacturing, promotion, buying or selling of any … goods [the subject of these proceedings].”
Save for that denial, the defendants have put forward no admissible material by way of defence. By his affidavit in opposition to the summons for final judgment, the first defendant has simply sought to exhibit an unauthenticated document purporting to be evidence that a supplier of clothing based in “Thailland” and trading (according to its letterhead) as “Earn & Fern Manufaturer (sic) & Wholesale (sic) of Footwear” forwarded certain authentic "Diesel" “garments and shoes” to him. The claim of the document to veracity is not strengthened by the fact that two telephone numbers are given for the firm at a single address; but the area codes are, respectively, stated to be “(622)” and “(662)”. Moreover, the word “Manufacturer” is misspelt in the letterhead but not in the body of the document, which purports to have been written by an individual who gives his name as “Tony lim”. And even if this document were properly authenticated, it would not prove that the first defendant did not deal in counterfeit clothing. While “Earn & Fern” is a Thai firm, the shoes the subject of the present proceedings bear markings that purport to show the country of manufacture as Korea.
A defendant who wishes to obtain leave to defend must do more than merely deny the allegations against him or her. He or she must deal specifically with each of the allegations in respect of which the plaintiff has tendered credible evidence of a prima facie case. Once the plaintiff has by affidavit made in accordance with the rules established a good cause of action, the defendant has the burden of satisfying the Court that leave to defend should be given.[3] In my opinion, neither defendant has met this challenge.
[3] Williams Civil Procedure – Victoria p.3372 at [22.06.10].
Where a summons for final judgment is taken out in proceedings in which the plaintiff seeks damages, the judgment given will be interlocutory, and the damages will be assessed (generally, by a Master) in accordance with O51: see r.22.09. Although the plaintiffs ask me to assess damages now, I do not think that it is appropriate to do so. In this context I note that the plaintiffs would have me calculate damages on the basis that 700 items (T-shirts) were offered to Ms Evans on 9 November last year, and only 178 seized three weeks later, and that the difference of 522 represents the number of T-shirts sold in the meantime. I have already indicated that I am not attracted to this hypothesis.
In my opinion the plaintiffs are, for the reasons I have endeavoured to set out above, entitled to declarations and injunctions in the form sought by them in the summons of 14 June. I will discuss with the parties the particular form which the judgment should take.
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