Geoffrey Inc v Luik

[1997] FCA 928

FEDERAL COURT OF AUSTRALIA

PROCEDURE - summary judgment - first applicant proprietor of trade marks - applicants marketers of toys under the trade mark - respondents registering business name identical to trade marks some years prior to activity within jurisdiction by applicants - applicants subsequently commencing activity within jurisdiction - notice to respondents of first applicant’s proprietorship in marks - continued trading by respondents - applicants' claims in respect of trade mark infringement, passing off and misleading or deceptive conduct - whether respondents' defence discloses no arguable defence to applicants' claim - whether applicants entitled to summary judgment in respect of all or some of claims.

Trade Marks Act 1955 (Cth), ss 62, 64 (1)(a), 54(1)(c)
Trade Marks Act 1995 (Cth), ss 120(1), 120(2), 122(1)(a), 124(1)
Fair Trading Act 1987 (WA)
Business Names Act 1962 (WA)

Federal Court Rules 1978 (Cth), O 20 r 1

Webster v Lampard (1993) 177 CLR 598
TheShell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407
Angoves Pty Ltd v Johnson (1983) 66 FLR 216
Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326
BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1977) 51 ALJR 254
Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193
Caterpillar Inc & Anor v Sun Forward Pty Ltd (1996) 36 IPR 411

GEOFFREY INC and ORS v HEINZ GERHARD CHRISTIAN LUIK and ANOR
NG 883 of 1995

R D NICHOLSON J
PERTH
10 SEPTEMBER 1997

GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	NG 883 of 1995
GENERAL DIVISION

BETWEEN:

GEOFFREY INC
First Applicant

TOYS "R" US INC
Second Applicant

TOYS "R" US (AUSTRALIA)PTY LTD
Third Applicant

AND:

HEINZ GERHARD CHRISTIAN LUIK
First Respondent

THOMAS VICTOR PARR
Second Respondent

JUDGE:	R D NICHOLSON J
DATE OF ORDER:	10 SEPTEMBER 1997
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. Within 7 days the applicants file and serve submissions concerning the form of orders

   and the costs order.

1. These matters be set down for hearing for not longer than 30 minutes on 23 September

   1997 at 2.45pm.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	NG 883 of 1995
GENERAL DIVISION

BETWEEN:

GEOFFREY INC
First Applicant

TOYS "R" US INC
Second Applicant

TOYS "R" US (AUSTRALIA)PTY LTD
Third Applicant

AND:

HEINZ GERHARD CHRISTIAN LUIK
First Respondent

THOMAS VICTOR PARR
Second Respondent

JUDGE:	R D NICHOLSON J
DATE:	PERTH
PLACE:	10 SEPTEMBER 1997

REASONS FOR JUDGMENT

HIS HONOUR:  This is an application pursuant to O20 r1 of the Federal Court Rules 1978 (Cth) ("the Rules") for summary judgment.  The High Court authority of Webster v Lampard (1993) 177 CLR 598 makes it clear the Court should approach a summary judgment application on the basis the defendants' affidavit evidence, if not inherently incredible, will be accepted at trial, and on that basis the Court should consider the material to determine whether it discloses either an arguable defence or material such as might give rise to an arguable defence, for it is the case the Court should be slow to give judgment without a trial except in very obvious cases where it is readily apparent there is not a defence.

NATURE OF THE CLAIMS

The first and second applicants are companies organised under the law of the United States of America and the third applicant is a company incorporated in New South Wales.  These three applicants and the international corporate group of which they are members, known as the “TOYS ‘R’ US organisation”, claim to comprise a global operation selling principally toys but including other products.  The second applicant claims to be the owner of this worldwide operation.  The first applicant claims to own, control, manage and licence the intellectual property associated with the business conducted by the applicants.  The business of the organisation is said to be the manufacture, promotion and sale of children’s furniture, toys, clothing and various other goods continuously since 1958 in and from the United States and other countries including Australia.  This is done under the name “TOYS ‘R’ US” (in which name the “R” is often reversed as a mirror image).  As a result the applicants claim to have acquired a significant reputation worldwide in the name.

The first applicant also claims to be the registered proprietor in Australia and elsewhere of certain trade marks ("the trade marks") under which it has been continuously providing goods throughout Australia under the “TOYS 'R' US” trade mark since 1993.  Those trade marks are:

Mark	Registration Number	Class	Date Registered From	Goods or Services
TOYS ‘R’ US ["R" reversed as a mirror image]	A376289	28	2 June 1982	Games, toys and play things and all other goods in class 28.
TOYS ‘R’ US ["R" reversed as a mirror image]	A376288	42	2 June 1982	Retail department store services in relation to the importation, sale, distribution of games, toys and play things.

It is claimed therefore the applicants have a considerable and substantial reputation and goodwill in the name “TOYS ‘R’ US”.

The applicants claim the respondents are the registered proprietors in Western Australia of the business name “TOYS ‘R’ US”.  Furthermore, that the respondents applied for registration for trade marks for the name “TOYS R US” (with the “R” in reverse form and in the forward form) on 20 April 1994.  It is claimed the respondents are and have been engaged in tradeable commerce in the business of selling toys and children’s educational products in Western Australia under that name without the licence of the applicants or any of them.

For the purposes of the present application there are three relevant claims in the statement of claim. The first is for trade mark infringement. It is claimed the name used by the respondents constitutes use of a mark which is substantially identical with, or deceptively similarly to, the “TOYS ‘R’ US” trade marks in the course of trade in relation to goods or services in respect of which those trade marks are registered. Consequently, it is pleaded the respondents have infringed and continue to infringe the trade marks in breach of s 62 of the Trade Marks Act 1995 (Cth) ("the 1995 Act").

The second claim is for passing off. The third claim is the respondents have, in trade and commerce, engaged in conduct which is misleading or deceptive or likely to mislead or deceive in contravention of s 10 of the Fair Trading Act 1987 (WA) and in connection with the supply or possible supply of toys and other products designed for children, represented those products have the sponsorship or approval of the applicants in contravention of s 12 of that Act.

The claim was filed on 21 November 1995.

RESPONDENTS’ DEFENCE

The respondents have each been unrepresented.

On 15 November 1996 and 22 November 1996 respectively, the respondents filed a document entitled “Notice of defence”.  The documents are in identical form.  They contain a mixture of assertions of law and the fact.  I approach the matter on the basis that assertions of fact should be taken at their highest and to be considered, for the purposes of this application, as capable of being verified by affidavit.  At a hearing on 7 March 1997 the first respondent consented to his Notice of defence being marked as an exhibit insofar as it contained assertions of fact.

The respondents assert the registration by them of their business name on 10 October 1984 gave them the right to advertise, promote, sell, distribute and supply any goods manufactured by them under that name.  They assert no objections were lodged against their business name.  Further, it was they who informed the first applicant of their existence prior to the applicants entering the Western Australian market.

The respondents each deny passing off.  They each assert any telephone calls received by them intended to be directed to the third applicant were advised they were not associated with the respondents' business and re-directed the calls to the telephone number of the third applicant.

In relation to trade marks, the defence asserts the respondents' have lodged their own applications subject to the restriction they only apply in Western Australia.  Furthermore, they assert the applicants’ trade mark should be removed from the register for non‑use in that they were not used from 1984 until 1993 in Western Australia.

Annexed to each of the Notice of defence documents are various documents.  One of these in entitled “Company History” and recites the respondents’ purchased the business in April 1992 from one Samual Parr.  A further annexure is a “Statutory Declaration” from Samual Parr in which he declares on 10 October 1984 he registered the trade name “TOYS R US” in the State of Western Australia “after seeing a similar name, either “Babys R Us” or something similar”.

Also annexed are documents showing the usage by the respondents of the name “TOYS ‘R’ US” with the “R” in reverse style.

On 14 March 1997 the respondents filed a joint affidavit.  In relation to the claim of trade mark infringement, the respondents assert the trade mark application number A627735 (one of the respondents’ trade marks listed in Schedule 3 to the statement of claim) has been “accepted” by the Registrar of Trade Marks on the following terms and conditions,  namely, they are to be registered as proprietor of the trade mark “TOYS ‘R’ US” (with a reverse ‘R’) concurrently with the applicants’ trade mark but restricted to the State of Western Australia.  The respondents also assert non‑usage by the applicants of their trade mark prior to 1994.

Attached to the affidavit is a “Status report for trade mark application” dated 22 October 1996 in respect of application number A627735.  Examination of that report makes apparent the mark was accepted under Pt A of the Trade Marks Act 1955 (Cth) ("the 1955 Act") in but its status was “opposed”.  There is a further status report on Application A627736, being the other application by the respondents identified in Schedule 3 to the statement of claim, which shows that application is likewise opposed.  Thus, the true position is there is no evidence the respondents have a registered trade mark.

In relation to passing off, the affidavit asserts the respondents purchased the business in good faith and established goodwill under the name in Western Australia “long before the American company entered the market place in Australia and particularly Western Australia”.  Furthermore, it asserts they have traded without objection from anyone, including the applicants, since 1 October 1994.

APPEARANCES BY RESPONDENTS

This application first came on for hearing on 7 March 1997.  The first respondent appeared in person.  There was no appearance by or for the second respondent although he filed an authority to the first respondent to act on his behalf.  The result was, after initial submissions for the applicants, the hearing was adjourned to provide the respondents the opportunity to file any affidavit in answer to the application, including in particular any evidence of their intentions at the time they purchased the business and the business name.  That resulted in the filing of the affidavit on 14 March 1997.

There was a further direction there be no less than three weeks notice of the adjourned hearing date, that being designed to ensure the second respondent, whom it is accepted works as a train driver at Port Hedland, had adequate notice of the Court hearing.

On 16 May 1997 the second respondent filed a statutory declaration advising he would be away from Australia from six to eight weeks from May 7.

On 27 May 1997 each of the respondents was advised by letter dated 27 May 1997, of which proof of service is filed with the Court in accordance with directions made at the hearing on 7 March 1997, the application for summary judgment was listed for hearing on 4 August 1997.

On 26 June 1997 a letter was received by the Court from the first respondent asking the matter be set down for hearing towards the end of November or the beginning of December.  The reason given was “commitments entered into last year at great financial cost” required the respondents to be out of Perth at various country venues and cancellation of these venues and commitments would cause “huge financial loss”.  The request for adjournment was opposed on behalf of the applicants and each of the respondents was advised of the opposition by letter dated 15 July 1997.

On 31 July 1997 a document purporting to be “a motion to re‑schedule hearing” was filed seeking the adjournment of the hearing until the end of November or the beginning of December 1997.  In an accompanying statutory declaration declared on 29 July 1997 the second respondent stated he was unable to attend the hearing set for 4 August “due to long‑standing prior engagements” and repeating the possibility of financial loss in the event of cancellation of any of these commitments.

On 31 July 1997 each of the respondents was advised in writing by the court that their primary obligation was to attend the Court but if they could not do so, they should provide a telephone number to which a link could be established at the date and time of the hearing on 4 August so they could hear submissions against them and make submissions in response.

At the hearing on 4 August neither of the respondents attended nor did either of them provide any number to which a telephone conference link could be established.  The hearing proceeded on the basis an opportunity had been provided to each of the respondents to appear and further state or support their case and the need for any further opportunity would be an issue to be considered in the course of consideration of the applicants’ case upon reservation of judgment at the conclusion of the hearing.  This decision was supported by reference to:

1. the opportunity which had been given to the respondents to attend on a date which avoided the initial objection stated by the second respondent to an earlier hearing;

2. the absence of any submission by either respondent prior to 26 June 1997 in relation to "commitments entered into last year"; and

3. the absence of any response to the offer to provide for telephone communication during the hearing.

Since these reasons have been reserved an opportunity has been provided to both parties to make submissions concerning the applicability of the 1955 Act and the 1995 Act.  No submissions were received from or on behalf of either respondent.

In my opinion a more than reasonable opportunity has been given to each of the respondents to be heard and no further adjournment is appropriate.

PRIOR ORDER BY CONSENT

On 8 November 1996 the first respondent consented to an order against him restraining him from further prosecuting the trade mark applications numbers A627735 and A627736; requiring him to withdraw the same; and further restraining him from applying for registration of any trade mark incorporating the mark “TOYS ‘R’ US” or any other marks substantially identical with, or deceptively similar to, such mark.

APPLICANTS’ EVIDENCE

The applicants’ evidence comprises, firstly, an affidavit from Mr John Francis Redenbach, merchandise director of the third applicant sworn 5 November 1996; secondly, a further affidavit of Mr Redenbach sworn 4 December 1996; thirdly, exhibits PDH 1‑3 to the affidavit of the Pamela Diane Hamer affirmed 5 November 1996; and fourthly, certified certificates of registration of the applicants’ trade marks numbered A376288 and A376289.

Exhibit notes JFR1‑3 to the affidavit of Mr Redenbach sworn 5 November 1996 are held by the Court on the basis further submissions may be made seeking confidentiality for them but either respondent may view them for the purposes of making submissions or filing evidence.  It is appropriate to state these exhibits relate to commercially sensitive information.  In the event the notes play no further part in these reasons.

There is evidence the first “TOYS ‘R’ US” store was established in Australia in 1993 and the first such store opened in Western Australia on 29 October 1994.  Prior to that the “TOYS ‘R’ US” organisations specifically directed advertising material towards Australian tourists visiting other countries in the Asia/Pacific region where the organisation had stores selling its products.

TRADE MARK INFRINGEMENT

The 1995 Act was assented to on 17 October 1995 with Pt 1 commencing on the day of assent.  The balance of that Act commenced on 1 January 1996.  At the same time the 1995 Act repealed the 1955 Act.

Section 255 of the 1995 Act provides:

"255 (1) If:

(a)an action or proceeding validly brought for the purposes of the repealed Act was still pending immediately before 1 January 1996; and

(b)that action or proceeding could have been brought under this Act if this Act had been in force when the action or proceeding was started;

then, except as otherwise provided by this Division or the regulations, this Act applies in relation to the action or proceeding as if it were an action or proceeding validly brought on 1 January 1996 under the relevant provision of the Act.

(2)  Anything done under the repealed Act for the purposes of the action or proceeding is taken to have been done:

(a)on 1 January 1996; and

(b)in accordance with this Act"

Further, s 252 of the 1995 Act, which is in the same Division as s 255, states:

"252  Sections 62 to 67 and section 78 of the repealed Act continue to apply in relation to an action for the infringement of a trade mark that was pending immediately before 1 January 1996."

“Repealed Act” is defined in s 16 of the 1995 Act to mean the 1955 Act and the regulations in force immediately before its repeal.

As previously mentioned, the claim was filed on 21 November 1995 and accordingly it falls within s 255, with the effect the claim is to be dealt with under the 1995 Act subject to s 252 and so under ss 62‑67 of the 1955 Act.

Section 62 of the 1955 Act provides:

"62.  (1)  A registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or a registered user of the trade mark using by way of permitted use, uses a mark which is substantially identical with, or deceptively similar to, the trade mark, in the course of trade, in relation to goods or services in respect of which the trade mark is registered.

(2)  In an action for infringement of a trade mark registered in Part B of the Register (not being an infringement occurring by reason of an act referred to in the next succeeding section), an injunction or other relief shall not be granted to the plaintiff if the defendant establishes to the satisfaction of the court that the use of the mark of which the plaintiff complains is not likely to deceive or cause confusion or to be taken as indicating a connexion in the course of trade between the goods or services in respect of which the trade mark is registered and a person having the right, either as registered proprietor or as registered user, to use the trade mark."

In their Notices of defence the respondents admit the use of the trade mark in relation to toys.  So far as the respondents use the trade mark with the "R" in reverse form and with balloon printing for all words, their usage is identical with the trade marks.  So far as the respondents may use the trade mark without the “R” in reverse form or without balloon printing, it is not open to argument the mark used by them is either substantially identical with or deceptively similar to the registered trade marks:  see TheShell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407 at 414‑415.

The evidence also shows the respondents have used the trade mark as a shop sign.  The operation of the retail department store by the respondents under that name is unarguably a use of the sign in relation to services in respect of which the trade mark is registered.

There are three responses which appear from the materials filed by the respondents.  The first is they have a trade mark application which has been “accepted” in the State of Western Australia.  So far as the first respondent is concerned, that cannot provide any defence because he has consented to an injunction in the terms previously stated requiring him to withdraw the application.  So far as the second respondent is concerned, it is apparent the application is opposed and provides no foundation for any defence.

The second possible defence appearing from the same materials is there was non‑user of the trade marks by the applicants prior to 1993. Section 64(1)(c) of the 1955 Act reads:

"64.(1) Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of a trade mark:

...

(c)the use by a person of a trade mark in relation to goods or services in relation to which that person has, by himself or his predecessors in business, continuously used the trade mark from a date before:

(i)the use of the registered trade mark by the registered proprietor, by his predecessors in business or by a registered user of the trade mark; or

(ii)the registration of the trade mark;

whichever is the earlier;"

The date of registration of each of the trade marks was 2 June 1982. That date is earlier than the first use by the respondents. The respondents’ usage therefore is not such that it can come within the provisions of s 64(1)(c) of the 1955 Act. The 1995 Act makes provision for an application to be made in respect of non‑use: s92(4)(b), there being the possibility the defences available under the 1995 Act apply even if the matter is dealt with in accordance with the 1955 Act. However, the respondents did not seek to invoke this procedure and as such there is no requirement for me to rule on this issue. There is no other provision which can give to such usage the effect for it which the respondents seek to contend.

The third possible defence emerging from the materials is the respondents purchased the business name in good faith. Relevant to this possible defence is s 64(1)(a) of the 1955 Act, which reads:

"64.  (1)  Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of a trade mark:

(a)the use in good faith by a person of his own name or the name of his place of business or the name, or the name of the place of business, of any of his predecessors in business;"

The meaning of "good faith" in this section was considered by the Court in Angoves Pty Ltd v Johnson (1983) 66 FLR 216: see particularly at 248‑253. It was further considered by Gummow J in Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 353. As appears from examination of those passages, what is required is a finding of fact of absence of ulterior motive. The statements made by the respondents on each of their behalf in their respective notices of defence and in their joint affidavit provide no sure foundation for arriving at the requisite findings.

For the applicants it is contended the Court on this application should infer absence of good faith from the adoption by the respondents of the exact representation of the trade mark and that it should find such explanations as have been given by the respondents of that adoption to be disingenuous.  It is said the absence of good faith should be found because the respondents have, by use of the reverse "R" and on occasions of balloon printing, so used the trade marks as to leave no room for any assertion of good faith.  To so proceed is not properly open to the Court on an application for summary judgment where the Court lacks the benefit of cross‑examination of evidence given before the Court directed to the question of good faith and a full opportunity to determine credibility.

In my view the respondents have an arguable issue in relation to the application of s 64(1)(a) which can only be resolved at trial. It is the only apparently triable issue in relation to the question of trade mark infringement.

The provisions of the 1955 Act have equivalent provisions in the 1995 Act, namely:

1955 Act	1995 Act
s 62 s 64(1)(c) s 64(1)(a)	s 120(1) and (2) s 124(1) s 122(1)(a)

In my opinion, if the 1995 Act were applicable the position would be the same as that reached under the 1955 Act.

PASSING OFF

The fact the respondents have registered the name “TOYS ‘R’ US” as a business name under the Business Names Act 1962 (WA) cannot constitute a defence to an action for passing off:  B M Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1977) 51 ALJR 254 at 257 per Gibbs J.

The elements required to establish an action for passing off were discussed by Gummow J in Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193 at 246‑248. Those principle elements are reputation, misrepresentation, and damage.

As to the subject of reputation, there is abundant uncontroverted evidence the applicants have established an extensive reputation in Australia since commencing activities in Australia in 1993.  There is additionally uncontroverted evidence that prior to that date the activities carried on by the first and second applicants in the United States had resulted in those applicants acquiring a significant reputation worldwide, including Australia.  In Conagra (supra) at 263 Gummow J said:

"In my view, where the plaintiff, by reason of business operations conducted outside the jurisdiction, has acquired a reputation with a substantial number of persons who would be potential customers were it to commence business within the jurisdiction, the plaintiff has in a real sense a commercial position or advantage which it may turn to account."

As to the element of misrepresentation, it is apparent the evidence germane to the drawing of findings of fact on how the respondents assumed the business name prior to them having notice of the trade marks is in the same category as evidence going to whether the business name was adopted in good faith.  It is not evidence which would entitle the applicants to summary judgment.

However there is evidence the respondents continued to use the trade marks after awareness that its use caused the goods or services of the respondents to be mistaken for those of the applicants.  In Conagra (supra) Gummow J said at 245:

"A defendant originally may have adopted a mark honestly and innocently, either in ignorance of the existence of the plaintiff's mark or in the belief that his mark was so different from that of the plaintiff as not to be calculated to mislead purchasers.  But the authorities establish that in such a case, the continuing use of the mark after awareness that its use does cause the goods of the defendants to be mistaken for those of the plaintiff, is no less fraudulent in the eye of the court than user with an original fraudulent intent.  In Mitchell v Henry (1880) 15 Ch D 181 at 191, James L J said:

'The defendants must bear in mind that the original honesty of intention does not protect the continued user, if the user is found practically to have the result of deceiving, or is calculated to deceive purchasers, because it is very easy for manufacturers to avoid any possibility of misleading purchasers if they are misleading purchasers if they are minded to avoid it.'

The principle was expressed as follows by Lord du Parcq in Marengo v Daily Sketch and Sunday Graphic Ltd (1948) 65 RPC 242 at 253‑4: 'The honest man who finds that, through mere ignorance or inadvertence, he has done innocently that which, if done with wrongful intent, would have given a right of action for damages, will be anxious, when the facts are made clear to him, to take such steps as will prevent any misunderstanding in the future. If the Court of Equity is convinced that there has been such an innocent misrepresentation, and an honest defendant, not being himself so convinced, has refused to take proper steps of his own motion, the Court, acting upon the defendant's conscience, will compel him by injunction to act as an honest man ought to act when he has learned all the facts and has considered them impartially.' See also Ronson Products Ltd v James Ronson Pty Ltd (No 2) [1957] VR 731 at 738.

It has been said that this concept of fraud as constituted by persistence after notice is not necessarily such as would support an action of deceit:  Turner v General Motors (Australia) Pty Ltd (1929) 42 CLR 352 at 362; BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 12 ALR 363; 51 ALJR 254 at 258.  It may be that even after notice of the plaintiff's rights the defendant does not intend to deceive purchasers of his goods by representing those goods to be the goods of the plaintiff.  Nevertheless, if the defendant shuts his eyes as to the reasonable consequences, upon facts known to him, of what he is doing, then there would be grounds upon which a jury might make a finding of fraud in the full sense:  Hendriks v Montagu (1881) 17 Ch D 638 at 651-2; English and Scottish Mercantile Investment Co Ltd v Brunton [1892] 2 QB 700 at 707-8; Edward Young & Coy Ltd v Stanley Silverwood Holt (1948) 65 RPC 25 at 30; 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 79 ALR 299 at 322; 10 1 IPR 289; Star Micronics Pty Ltd v Five Star Computers Pty Ltd (1991) IPR 473. ...".

Accordingly, even if the respondents were able to establish innocent adoption of the trade marks, the admitted continued use by them after notice has the consequence they have no defence to this element of the tort.

As to damage, it is sufficient there is a likelihood of damage:  Conagra (supra) at 200‑201.  There is evidence persons in Western Australia believe there is some association between the business of the respondents and the applicants.  The fact of that belief gives rise to the inference of likelihood of damage being caused to the applicants by diversion of trade from the applicants to the respondents.

In my opinion, the respondents having had notice of the trade marks, their defence discloses no arguable defence nor any material likely to give rise to such a defence to the applicants' claim in passing off.

FAIR TRADING ACT 1987 (WA)

Section 10(1) provides "a person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive".  Section 12(1)(e) provides:

"12. (1)  A person shall not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services-

...        ...

(e)       represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;"

For the applicants it is contended their submissions made in relation to passing off also entitle them to judgment under these sections.

However, the issues were not argued in detail in the context of the Fair Trading Act and, as it is unnecessary to do so, I reach no concluded view that the applicants are entitled to judgment under this pleading.

DELAY

The applicants first learned of the conduct of the respondents on 17 January 1994.  These proceedings were commenced on 21 November 1995.  The respondents were put on notice the applicants did not consent to their activities on 19 April 1994.

In BM Auto Sales (supra) Gibbs J said at 259:

"A classic statement of the law as to laches is contained in the judgment of Lord Blackburn in Erlanger v. New Sombrer Phosphate Co. (1878), 3 App. Cas. 1218, at p.1279, where a passage from Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221, at pp.239‑240 is cited.  See also Turner v. General Motors (Australia) Pty. Ltd., ante, at pp.366, 369‑370.  There can be no doubt in the present case that the respondent was guilty of some delay in instituting the proceedings.  However, the respondent did not assent to the use of the name and it cannot be concluded on the evidence that the appellants were misled into supposing that their activities were permitted by the respondent.  Further, the case is not one in which a defendant, ignorant of the fact that he was inadvertently  using the business name of another, continued to do so and to build up his business."

Here there is no contention made in the defence the respondents were misled into supposing their activities were permitted by the applicants.  It has earlier been said this is not a case in which the respondents, ignorant of the fact they were inadvertently using the business name of another, continued to do so and build up their business under that name.  They were on notice and aware of what they were doing but their defence is they asserted they had superior legal rights.  These circumstances are such that there is no proper foundation upon which the defence of laches could be argued.

RELIEF

For these reasons I conclude this is a case where it is established by the applicants there is no defence to the claim of passing off.  It is appropriate to give summary judgment in respect of part of a case, when other causes of action can, or are only suitable to be, resolved by a trial:  see Caterpillar Inc & Anor v Sun Forward Pty Ltd (1996) 36 IPR 411 at 425 per Drummond J.

The applicants are entitled to orders in terms of paras 1 to 6 of their notice of motion dated 23 October 1996, modified if necessary so as to take account of the fact summary judgment is not available on the issue of trade mark infringement nor the Fair Trading Act.  They are also entitled to an order against the second respondent in terms of para 7 of that motion.  The applicants have requested, at their election, there be an inquiry as to damages or an account of profits.  Having in mind the provisions of O 39 of the Rules, this should properly be the subject of a separate application by the applicants if necessary.

I certify that this and the preceding fifteen
(15) pages are a true copy of the Reasons for Judgment herein of the Honourable
Justice R D NICHOLSON

Associate:

Dated:            10 September 1997

Counsel for the Applicants	P J Kerr
Solicitor for the Applicants:	Allen Allen & Hemsley
Counsel for the Respondents:	No appearance
Solicitor for the Respondents:	None on record
Date of Hearing:	4 August 1997
Date of Judgment:	10 September 1997