HOSER v Bunnings Group Ltd
[2017] FCCA 1624
•13 July 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HOSER v BUNNINGS GROUP LTD & ANOR | [2020] FCCA 1624 |
| Catchwords: TRADE MARKS – Alleged infringement – interlocutory injunction – where the trademark is a descriptive term – no serious question to be tried. |
| Legislation: Trade Marks Act 1995, ss.24, 120, 122 |
| Cases cited: American Cyanamid Co v Ethicon Ltd [1975] AC 396; [1975] 1 All ER 504; [1975] 2 WLR 316; [1975] FSR 101; [1975] RPC 513 Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; (2006) 229 ALR 457; (2006) 80 ALJR 1672; [2006] HCA 46 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; (1986) 11 ALN N152; (1986) 67 ALR 553; (1986) 60 ALJR 679; [1986] HCA 58 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216; (1978) 18 ALR 639; (1978) 52 ALJR 392; (1978) 1B IPR 818; (1978) 3 TPC 244; (1978) ASC 55-010; (1978) ATPR 40-067; [1978] HCA 11 |
| Applicant: | RAYMOND HOSER |
| First Respondent: | BUNNINGS GROUP LTD (ACN 008 672 179) |
| Second Respondent: | MICHAEL ALEXANDER |
| File number: | MLG 938 of 2017 |
| Judgment of: | Judge Riley |
| Hearing date: | 23 June 2017 |
| Date of last submission: | 29 June 2017 |
| Delivered at: | Melbourne |
| Delivered on: | 13 July 2017 |
REPRESENTATION
| Advocate for the applicant: | In person |
| Solicitors for the applicant: | None |
| Counsel for the first respondent: | Excused from appearing |
| Solicitors for the first respondent: | HWL Ebsworth Lawyers |
| Counsel for the second respondent: | Shaun Clement |
| Solicitors for the second respondent: | E C Legal Litigation & Business Lawyers |
ORDERS
Except insofar as undertakings were given to the court on 16 May 2017, the application filed on 8 May 2017 for interlocutory injunctions be dismissed.
The applicant pay the second respondent’s costs of the hearing on 23 June 2017 fixed in the sum of $3,422.50.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 938 of 2017
| RAYMOND HOSER |
Applicant
And
| BUNNINGS GROUP LTD (ACN 008 672 179) |
First Respondent
And
| MICHAEL ALEXANDER |
Second Respondent
REASONS FOR JUDGMENT
Before the court is an interlocutory application for orders restraining the second respondent from using the words “reptile party” and “reptile parties” as a trade mark.
The applicant describes himself as:
a globally recognised reptile expert and government licensed wildlife demonstrator, known as the “snake man”.
He said that:
I have long owned registered words only trademarks for “snake man”, and other business brands, including “snake busters” and “reptile parties” all of which are universally identified with myself and my brands in the relevant industry sector … .
The first respondent, Bunnings Group Limited (“Bunnings”) is a well-known hardware retail chain.
The applicant described the second respondent as:
… a police and wildlife department protected criminal … and recent entrant (2016) to the business of government licensed wildlife demonstrations, trading as “Black Snake Productions.”
It seems that the applicant and the second respondent both have businesses where they provide wildlife demonstrations. Some of the demonstrations occur at children’s parties, in a similar style to clown parties or fairy parties.
According to the applicant, between 2011 and 2014, the applicant’s business conducted many live reptile shows at Bunnings stores around Victoria. Bunnings then ceased engaging the applicant to provide reptile shows, without any explanation, but did engage other wildlife demonstrators to provide reptile shows.
According to the applicant, Bunnings heavily advertised “the snake man” as coming to its Ringwood store on two weekends in 2016. The person who Bunnings engaged for those shows was the second respondent.
The substantive matter was commenced by an application filed on 8 May 2017. The matter was listed by the registry on 24 May 2017 for directions. However, following a request from the applicant, and in view of the fact that the applicant sought urgent interlocutory injunctions, the matter was brought forward to 16 May 2017.
On 16 May 2017, Bunnings was represented by counsel but neither the applicant nor the second respondent had the benefit of legal assistance. It soon became apparent that the applicant’s affidavit in support of his application had not been properly sworn. Consequently, it was necessary to adjourn the hearing of the interlocutory applications to the earliest available date, which was 23 June 2017.
Nevertheless, on 16 May 2017, the applicant gave the usual undertaking as to damages, and the first and second respondents gave undertakings as follows:
… UPON THE UNDERTAKING of the first respondent, without any admissions, until the determination of this proceeding against the first respondent or further order, to not itself, or by its officers, employees, agents or howsoever otherwise, use as a trademark the terms:
(a)Snakeman; or
(b)Snake Man;
or any name or sign substantially identical with or deceptively similar to either of those terms in relation to wildlife demonstrations or entertainments without the applicant’s consent
AND UPON THE UNDERTAKING of the second respondent, without any admissions, until the determination of this proceeding against the second respondent or further order, to not himself, or by his officers, employees, agents or howsoever otherwise, use as a trademark the terms:
(a)Snakeman;
(b)Snake Man; or
(c)snakebusters,
or any name or sign substantially identical with or deceptively similar to any of those terms in relation to wildlife demonstrations or entertainments without the applicant’s consent …
On 16 May 2017, the court also made orders for the filing and service of material, and referring the matter for mediation. In view of the undertakings that had been given by the respondents, and after some discussion at the hearing on 16 May 2017, the interlocutory hearing on 23 June 2017 was confined to whether the second respondent should be restrained from using the words “reptile party” or “reptile parties” as a trade mark. The first respondent was excused from attendance on 23 June 2017.
At the hearing on 23 June 2017, the second respondent was legally represented but the applicant was not. The second respondent admitted that the applicant had registered the two trade marks, “reptile party” and “reptile parties”, and that the registration of those trade marks was continuing. The second respondent also admitted that he had used the terms, “reptile party” and “reptile parties” in the course of his business.
However, the second respondent denied that he had infringed the applicant’s trade marks, on the grounds that:
a)the terms “reptile party” and “reptile parties” were descriptive terms, which indicated the kind of service provided; and
b)the second respondent had used those terms prior to the applicant’s registration of his trade marks.
The second respondent also argued that an injunction should not be granted in this case because:
a)damages would be an adequate remedy;
b)the applicant had delayed in bringing his application for an interlocutory injunction; and
c)the second respondent’s business would be severely prejudiced if an injunction were granted prior to the final hearing.
For the basic principles applying to applications for interlocutory injunctions, the applicant relied upon Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153; (1986) 11 ALN N152; (1986) 67 ALR 553; (1986) 60 ALJR 679; [1986] HCA 58 where Mason ACJ said:
In order to secure … an [interlocutory] injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.
In Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65]-[72]; (2006) 229 ALR 457; (2006) 80 ALJR 1672; [2006] HCA 46, Gummow and Hayne JJ, with whom Gleeson CJ and Crennan J agreed, somewhat clarified the test, by saying:
65.The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:
“The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.”
By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:
“How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.”
…
67.Various views have been expressed and assumptions made respecting the relationship between the judgment of this Court in Beecham and the speech of Lord Diplock in the subsequent decision, American Cyanamid Co v Ethicon Ltd. It should be noted that both were cases of patent infringement and the outcome on each appeal was the grant of an interlocutory injunction to restrain infringement. Each of the judgments appealed from had placed too high the bar for the obtaining of interlocutory injunctive relief.
68.Lord Diplock was at pains to dispel the notion, which apparently had persuaded the Court of Appeal to refuse interlocutory relief, that to establish a prima face case of infringement it was necessary for the plaintiff to demonstrate more than a 50 per cent chance of ultimate success. Thus Lord Diplock remarked:
“The purpose sought to be achieved by giving to the court discretion to grant such injunctions would be stultified if the discretion were clogged by a technical rule forbidding its exercise if upon that incomplete untested evidence the court evaluated the chances of the plaintiff’s ultimate success in the action at 50 per cent or less, but permitting its exercise if the court evaluated his chances at more than 50 per cent.”
69.In Beecham, the primary judge, McTiernan J, had refused interlocutory relief on the footing that, while he could not dismiss the possibility that the defendant might not fail at trial, the plaintiff had not made out a strong enough case on the question of infringement. Hence the statement by Kitto J in the course of argument in the Full Court that it was not necessary for the plaintiff to show that it was more probable than not that the plaintiff would succeed at trial.
70.When Beecham and American Cyanamid are read with an understanding of the issues for determination and an appreciation of the similarity in outcome, much of the assumed disparity in principle between them loses its force. There is then no objection to the use of the phrase “serious question” if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham, depends upon the considerations emphasised in Beecham.
71.However, a difference between this Court in Beecham and the House of Lords in American Cyanamid lies in the apparent statement by Lord Diplock that, provided the court is satisfied that the plaintiff’s claim is not frivolous or vexatious, then there will be a serious question to be tried and this will be sufficient. The critical statement by his Lordship is “[t]he court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried”. That was followed by a proposition which appears to reverse matters of onus:
“So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought.”
(Emphasis added.)
Those statements do not accord with the doctrine in this Court as established by Beecham and should not be followed. They obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.
72.The second of these matters, the reference to practical consequences, is illustrated by the particular considerations which arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application. The first consideration mentioned in Beecham, the nature of the rights asserted by the plaintiff, redirects attention to the present appeal. (citations omitted)
The second respondent’s primary argument was based on s.122(1)(b) of the Trade Marks Act 1995 (“the Act”), which provides that:
(1)In spite of section 120, a person does not infringe a registered trade mark when:
(a)…
(b)the person uses a sign in good faith to indicate:
(i)the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services …
Subsection 120(1) of the Act provides that:
A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
The second respondent argued that he had used the terms “reptile party” and “reptile parties” in good faith to indicate the kind of service he offered, which included bringing reptiles to children’s parties as a form of entertainment. The second respondent argued that this case was somewhat similar to Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 231; (1978) 18 ALR 639; (1978) 52 ALJR 392; (1978) 1B IPR 818; (1978) 3 TPC 244; (1978) ASC 55-010; (1978) ATPR 40-067; [1978] HCA 11, where Stephen J said:
There was evidence before the Industrial Court about the antecedents and activities of the Hornsby Centre from which it could have concluded that those concerned with that Centre’s activities were intent to benefit from the good repute which the Sydney Centre had, over the years, created for the particular kind of services, unique of their kind, which it had offered as the only building information centre in the Sydney area. However to say this is not to suggest any wrongdoing on their part. Neither the concept of such a centre nor its conduct is anything for which a monopoly can be claimed, any more than it could be claimed for, say, an art gallery. If the first commercial art gallery in a city meets with an enthusiastic response from the public, competitive galleries are likely to be attracted to the field. They will be free to enter it and to describe themselves as art galleries, that being the descriptive name appropriate to their business: and this despite the fact that the pioneer gallery might have chosen also to style itself “art gallery”, prefixed by a regional name. For competitors’ conduct to be misleading and deceptive they would have to have adopted as their names the same or a similar regional prefix followed by “art gallery”. A quite distinct regional prefix, followed by “art gallery” would neither mislead nor deceive. The opposite view would involve treating this provision of the trade practices legislation as the source of a newly created monopoly heretofore unknown to the law and likely to deter new entrants into a field which ought to be open to legitimate competition. It is difficult to contemplate any less likely legislative source of such a consequence. The present case of building information centres is, I think, no different in principle.
It seems to me that the terms “reptile party” and “reptile parties” are relevantly similar to terms such as building information centre, art gallery, hairdresser, motor mechanic, clown party and fairy party, in that they all describe a kind of service and in that sense are descriptive. The applicant conceded during the hearing that the terms “reptile party” and “reptile parties” are descriptive: Tr. p.91, lns.34-35.
Nevertheless, the applicant argued that the second respondent did not use the terms “reptile party” and “reptile parties” merely to indicate the kind of service he offered, but purportedly to represent himself as the applicant. This allegation, if established, would go to the question of good faith. The applicant’s evidence in support of this allegation was contained in exhibit 87 to his affidavit sworn on 18 May 2017. That exhibit was a voice recording of a telephone call between an accomplice of the applicant and the second respondent in April 2017. The accomplice asked, Are you reptile parties? The second respondent said, Yes, we do reptile parties. The telephone call continued with a discussion of the details of the service provided by the second respondent.
The applicant argued this telephone conversation indicated that the second respondent had claimed to be an entity called “reptile parties”. I do not accept that contention. It seems to me that the second respondent, in that telephone call, did not purport to be an entity called “reptile parties” but simply said that he did reptile parties, in the sense of providing the kind of service that involved bringing reptiles to parties. I do not consider that exhibit 87 detracts from the second respondent’s good faith.
The applicant also took the court to exhibit 83 to his affidavit sworn on 18 May 2017. The exhibit is a printout of a Google search where the term searched was “reptile party”. The responses were:
Wildlife and reptile parties - more animals - more fun
10 years creating smiles with qualified zookeepers and educators. Vics best
…
Birthday parties - Schools and Kinders
Call 0432 [omitted]
[there followed a map of southeast Melbourne]
Snake Busters
4.8 (19) 700.0m
Reptile Shop . 488 Park Orchards [omitted]
Closed now
Reptile Encounters
[the remainder of the search was cut off in the document provided to the court]
The applicant emphasised that the second respondent had paid for an advertisement with Google. Clearly, the applicant had as well, as shown by the mark However, the second respondent’s advertisement clearly appeared earlier in the search results than the applicant’s did, for unexplained reasons. In any event, it does not seem to me that the mere fact of placing an advertisement with Google in relation to a search term that describes a kind of service in any way infringes the Act, or detracts from the second respondent’s good faith in this case.
The applicant also criticised the second respondent for including in his advertisement the words, “Vics best”. That seems to me to be nothing more than advertising puffery, albeit with poor punctuation, and not an infringement of the Act or any of the applicant’s enforceable rights. I do not consider that it detracts from the second respondent’s good faith.
The applicant also criticised the exhibits to an affidavit affirmed by the second respondent on 22 June 2017. The exhibits were letters and advertising brochures from numerous wildlife demonstration providers, some of whom said that they had been using the terms “reptile party” and “reptile parties” for decades, and some of whom were located interstate. The applicant made the point that none of them used the terms “reptile party” or “reptile parties” in their letterheads or logos. I do not consider that to be significant.
Indeed, I do not consider it to be significant whether or not other people have in fact used the terms “reptile party” or “reptile parties” in their advertising or otherwise. That is because s.24 of the Act provides that:
(1)This section applies if a registered trade mark consists of, or contains, a sign that, after the date of registration of the trade mark, becomes generally accepted within the relevant trade as the sign that describes or is the name of an article, substance or service.
(2)If the trade mark consists of the sign, the registered owner:
(a)does not have any exclusive rights to use, or authorise other persons to use, the trade mark in relation to:
(i)the article or substance or other goods of the same description; or
(ii)the service or other services of the same description; and
(b)is taken to have ceased to have those exclusive rights from and including the day determined by the court under subsection (4).
(3)If the trade mark contains the sign, the registered owner:
(a)does not have any exclusive rights to use, or authorise other persons to use, the sign in relation to:
(i)the article or substance or other goods of the same description; or
(ii)the service or other services of the same description; and
(b)is taken to have ceased to have those exclusive rights from the day determined by the court under subsection (4).
(4)For the purposes of subsections (2) and (3), a prescribed court may determine the day on which a sign first became generally accepted within the relevant trade as the sign that describes or is the name of the article, substance or service.
That is, even if the applicant were the first person in Australia to use and register as a trademark the terms “reptile party” or “reptile parties”, he would lose the exclusive right to use those terms once they became generally recognised in the relevant trade as descriptive of the relevant service. It seems that has occurred already.
In my view, on the material and arguments presently before the court, there is not a serious question to be tried in this case because the prospect of the applicant succeeding is very remote.
The court must also consider the balance of convenience. I accept that, if an interlocutory injunction is not granted, the applicant would lose business. He has quantified his damages at $5.3 million, but has not yet explained how that figure was calculated. In any event, it also seems obvious that, if the injunction is granted, the second respondent would lose about the same amount of business as the applicant would gain. It seems to me that the balance of convenience is about equally in favour of granting and not granting the injunction.
In relation to the question of whether damages would be an adequate remedy, I note that the second respondent informed the court, on 16 May 2017, that he had no assets in his name and no ability to pay a damages award. For this reason, it cannot be said that damages would be an adequate remedy.[1]
[1] American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 408; [1975] 1 All ER 504; [1975] 2 WLR 316; [1975] FSR 101; [1975] RPC 513, per Lord Diplock.
Nevertheless, based on the materials and evidence presently before the court, I consider that the applicant’s prospects of success are so remote, and the balance of convenience is so even, that it would not be appropriate to issue the interlocutory injunction sought by the applicant, even though there is little prospect of him ever recovering damages from the second respondent.
In view of these conclusions, it is unnecessary to consider whether the applicant’s delay in seeking the interlocutory injunction is sufficient in itself to dismiss the application. It is also unnecessary to consider whether the second respondent did in fact use the terms “reptile party” and “reptile parties” prior to the applicant’s registration of those terms.
The second respondent sought costs. The applicant accepted that if he lost the interlocutory application, it would be appropriate for him to be ordered to pay the second respondent’s costs of the interlocutory application in accordance with the usual rule that costs follow the event.
The second respondent sought costs based on the court scale as follows:
ITEM
DESCRIPTION
COST
3
Interim or summary hearing—as a discrete event
$1,801.00
12
Advocacy Loading (50% of applicable daily hearing fee)
$540.50
13
Daily hearing fee (half day hearing)
$1,081.00
TOTAL
$3,422.50
The applicant was given until 4pm on 30 June 2017 to file and serve a written submission in response to the second respondent’s calculation of costs. The applicant filed and served a post-hearing written submission but it did not deal with the calculation of costs. As the applicant’s post-hearing written submission on other matters were filed without leave, I disregard it. (The applicant also filed a number of affidavits after the hearing. As they were filed without leave, I also disregard them for the purposes of these reasons.)
The second respondent’s calculation of costs appears to me to be in accordance with the scale. As the applicant did not succeed in his interlocutory application, it seems to me to be proper that he pay the second respondent’s costs as calculated.
There will be orders accordingly.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Judge Riley.
Date: 13 July 2017
5
0