Edwards v Liquid Engineering 2003 Pty Ltd

Case [2008] FCA 970


FEDERAL COURT OF AUSTRALIA

Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970

CONTRACTS – whether post-contractual conduct is admissible on the question of what a contract means – relevance of the subjective intentions of the parties to a contract – whether contract may be formed where there is an agreement to agree as to price or other substantive term – whether silence or failure to object to an unsolicited offer may constitute acceptance

COSTS – whether costs should be awarded in favour of applicant where application is dismissed as moot but would otherwise have been successful on the merits

EQUITY – estoppel – whether silence between intermittent threats of infringement may give rise to estoppel – whether equity will intervene when there is an adequate remedy at law – whether silence or failure to object to an unsolicited offer may give rise to an estoppel – whether wrongfully registered proprietor of a trade mark holds the mark on constructive trust for true owner – whether injunction should be granted where there is no showing of likelihood of future infringement

TRADE MARKS – appeal from decision of Registrar of Trade Marks that registered proprietor’s name be removed from the Register due to lack of intent to use the mark in good faith – whether appeal should be dismissed as moot where Court cannot grant relief sought even if applicant is successful – how mark is to be defined – whether mark includes or is associated with an image or particular graphic representation – whether ownership rights with respect to a mark are limited to goods of the same description – infringement action based on deceptive similarity – whether side-by-side comparison is required – whether presence or absence of additional descriptive word or associated image will avoid finding of deceptive similarity where distinctive or essential feature of the mark is borrowed – whether evidence of intent to deceive raises rebuttable presumption of consumer confusion – ownership of unregistered mark – right to register – meaning of “person aggrieved” under s 88 of the Trade Marks Act 1995 (Cth) – power of Court to direct amendment of Register by substitution of registered proprietor’s name with the applicant’s – power and discretion of the Court under ss 89, 122, 123, and 124 of the Trade Marks Act 1995 (Cth) to refuse relief where a party would otherwise be liable for infringement – quantum – election – whether applicant must elect between damages and account of profits before the close of evidence in non-split trial – whether applicant has the burden of establishing the infringer’s gross sales – whether respondent in non-split trial has burden of establishing costs incurred in relation to, including portion of general overhead reasonably attributable to, infringing goods – whether profits may be calculated using a measure of guesswork and estimation

Trade Marks Act 1995 (Cth)
Trade Practices Act 1974 (Cth)

Acme Office Service Pty Ltd v Lundstrom [2002] NSWSC 277
Adidas-Solomon AG v Turner (2003) 58 IPR 66

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Details
AGLC
Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970
Case
[2008] FCA 970
Decision Date

CaseChat Overview and Summary

The case of Edwards v Liquid Engineering 2003 Pty Ltd involves multiple parties and a complex dispute over trade mark ownership and infringement. Liquid Engineering 2003 Pty Ltd and Liquid Engineering Ltd (referred to collectively as Liquid) sued the first and second respondents in WAD 189 of 2007 and the third respondent in VID 934 of 2006 for wrongful registration of trade marks and infringement. The court was required to determine the admissibility of post-contractual conduct in interpreting contracts, the formation of contracts with an agreement to agree on certain terms, and the applicability of silence or failure to object as acceptance of an offer. Additionally, the court examined the relevance of subjective intentions in contract interpretation, the construction of trade marks, the availability of equity remedies in the presence of legal remedies, and the power of the court to amend the register of trade marks.

The court found that post-contractual conduct was admissible to interpret contracts and that the parties' subjective intentions were relevant. It held that a contract could be formed with an agreement to agree on certain terms, but silence or failure to object to an unsolicited offer did not constitute acceptance. The court also determined that equity could intervene in the presence of an adequate legal remedy, and it imposed a constructive trust on the respondents to hold the trade marks for Liquid. The court further clarified the definition of a trade mark, the requirement for a side-by-side comparison in determining deceptive similarity, and the burden of proof in non-split trials for infringement actions. The court also addressed the power of the court to amend the register of trade marks and the calculation of interest on damages.

The court dismissed the application in VID 934 of 2006 and ordered the respondents to pay the applicant's costs and damages, including interest. The court also ordered the rectification of the Register of Trade Marks to reflect the true ownership of the trade marks in question. The respondents were further ordered to pay the applicant's costs of the proceedings in WAD 189 of 2007 on a party-party basis.

Orders

Orders of the court

2. The application in VID 934 of 2006 be dismissed.

3. The respondent in VID 934 of 2006 pay the applicant’s reserved costs of and incidental to the proceedings, such costs to be taxed in default of agreement.

4. The first and second respondents in WAD 189 of 2007 pay the applicant $76,000 within 28 days, with liability for such payment to be joint and several.

5. The third respondent in WAD 189 of 2007 pay the applicant $30,175.71 within 28 days.

6. Interest be paid on the sums in orders 4 and 5 under s 51A of the Federal Court of Australia Act 1976 (Cth) calculated with effect from 30 June 2005 to the date of judgment by reference to the rates set down in the Penalty Interest Rates Act 1983 (Vic).

7. Pursuant to s 88(1)(b) of the Trade Marks Act 1995 (Cth) (the “TMA”), the Register of Trade Marks maintained under the TMA be rectified by amending the entries for registered trade mark No. 941987 “Exit Rust” and registered trade mark No. 941989 “Fuel Set,” being entries wrongly made or remaining in the Register as being owned by the first respondent in WAD 189 of 2007, and recording that the true owner of each of those registrations has been Liquid Engineering Ltd (ACN 074 772 697) from 3 February to 8 April 2003 and Liquid Engineering 2003 Pty Ltd (ACN 104 341 657) since 8 April 2003.

8. The cross-claim in WAD 189 of 2007 be dismissed.

9. The respondents pay the applicant’s costs of the proceedings in WAD 189 of 2007, including the costs of the cross-claim, on a party-party basis, such costs to be taxed in default of agreement.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

GORDON J

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Ratio Decidendi

Legal Principle Established

Established by: GORDON J

I cannot see any basis for a date more precise or reasoned than that calculated by proceeding on the basis that half the infringing sales occurred in the first two years and the other half occurred in the last two years. Counting back three years from the approximate date of this judgment (the end of June 2008) one arrives at the final date of 30 June 2005 as the date from which interest should be calculated. I will order that the rate be determined by reference to the rates set down by the Penalty Interest Rates Act 1983 (Vic).DECLARATIONS AND ORDERS For the foregoing reasons, the Court will declare that the first respondent in WAD 189 of 2007 has held each of Australian trade mark applications and registrations No. 941987 “Exit Rust” and No. 941989 “Fuel Set” on constructive trust for Liquid Engineering Ltd (ACN 074 772 697) from 3 February to 8 April 2003 and for Liquid Engineering 2003 Pty Ltd (ACN 104 341 657) since 8 April 2003. Further, the orders will be that:1.The application in VID 934 of 2006 be dismissed.2.The respondent in VID 934 of 2006 pay the applicant’s reserved costs of and incidental to the proceedings, such costs to be taxed in default of agreement.3.The first and second respondents in WAD 189 of 2007 pay the applicant $76,000 within 28 days, with liability for such payment to be joint and several.4.The third respondent in WAD 189 of 2007 pay the applicant $30,175.71 within 28 days.5.Interest be paid on the sums in orders 3 and 4 under s 51A of the Federal Court of Australia Act 1976 (Cth) calculated with effect from 30 June 2005 to the date of judgment by reference to the rates set down in the Penalty Interest Rates Act 1983 (Vic).6.Pursuant to s 88(1)(b) of the TMA, the Register of Trade Marks maintained under the TMA be rectified by amending the entries for registered trade mark No. 941987 “Exit Rust” and registered trade mark No. 941989 “Fuel Set,” being entries wrongly made or remaining in the Register as being owned by the first respondent in WAD 189 of 2007, and recording that the true owner of each of those registrations has been Liquid Engineering Ltd (ACN 074 772 697) from 3 February to 8 April 2003 and Liquid Engineering 2003 Pty Ltd (ACN 104 341 657) since 8 April 2003.7.The cross-claim in WAD 189 of 2007 be dismissed.8.The respondents pay the applicant’s costs of the proceedings in WAD 189 of 2007, including the costs of the cross-claim, on a party-party basis, such costs to be taxed in default of agreement.