Keller v LED Technologies Pty Ltd

Case [2010] FCAFC 55


FEDERAL COURT OF AUSTRALIA

Keller v LED Technologies Pty Ltd [2010] FCAFC 55

Citation: Keller v LED Technologies Pty Ltd [2010] FCAFC 55
Appeal from: LED Technologies Pty Ltd v Elecspess Pty Ltd
[2008] FCA 1941
Parties:

ANTHONY JAMES KELLER, LAWRENCE ALFRED ARMSTRONG and PETER OWEN MORRISON v LED TECHNOLOGIES PTY LTD (ACN 100 887 474)
and
ELECSPESS PTY LTD (ACN 104 535 597), ADVANCED AUTOMOTIVE AUSTRALIA PTY LTD (ACN 005 955 948), REN INTERNATIONAL PTY LTD (ACN 115 026 438), OLSEN INDUSTRIES PTY LTD (ACN 098 385 730) v LED TECHNOLOGIES PTY LTD (ACN 100 887 474)

File numbers: VID 167 of 2009; VID 168 of 2009
Judges: EMMETT, BESANKO AND JESSUP JJ
Date of judgment: 9 June 2010
Catchwords:

INTELLECTUAL PROPERTY – Registered designs – Validity of – Whether designs reasonably clear and succinct – Whether designs new and distinctive when compared with prior art base.

INTELLECTUAL PROPERTY – Registered designs – Infringement of – Whether alleged infringing products embodied designs that were substantially similar in overall impression to registered designs.

INTELLECTUAL PROPERTY – Registered designs – Infringement of – Joint liability for – Personal liability of director of infringing company.

TRADE PRACTICES – Prescribed consumer product safety standard – Goods supplied in trade or commerce – Whether goods complied with standard – Sufficiency of proof.

DAMAGES – Conduct amounting to infringement of design and contravention of trade practices legislation – Whether damages available under both heads – Where damages not awarded under trade practices legislation – Costs consequences.

TRADE PRACTICES – Contraventions by companies of legislative norms – Directors – Accessorial liability – Whether knowingly involved.

PRACTICE AND PROCEDURE – Costs – Whether appropriate to deny successful respondent his costs with respect to period before he swore to his non-involvement in conduct by company of which he had been director – Offer of compromise – Whether party entitled to costs incurred after service of offer of compromise on an indemnity basis.

Legislation:

Copyright Act 1968 (Cth) s 37, 101

Designs Act 1906 (Cth) s 17

Designs Act 2003 (Cth) ss 5, 8, 10, 15, 16, 19, 21, 39, 71, 73, 75, 111 and 112
Federal Court Rules, O 23, 11
Motor Vehicle Standards Act 1989 (Cth)
Trade Practices Act 1974 (Cth) ss 52, 53, 65C, 75B, 80 and 82
Vehicle Standard (Australian Design Rules) 2005 (Cth) rr1/00, 6/00, 49/00
Design Regulations 2004 (Cth) reg 3.01 and 4.04

Cases cited:

Allen Manufacturing Co Pty Ltd v McCallum & Co Pty Ltd (2001) 53 IPR 400
Australian Competition and Consumer Commission v Kokos International Pty Ltd (No 2) (2008) 30 ATPR 42-212
British Thompson-Houston Co., Ltd v Sterling Accessories, Ltd. (1924) 41 RPC 311
Brooke v Bool [1928] 2 KB 578
Brunskill v Sovereign Marine and General Insurance Co Pty Ltd (1985) 59 ALJR 842

Calderbank v Calderbank [1976] FAM 93
CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013
CGU Insurance Ltd v Corrections Corp of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173
Chambers v…

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AGLC
Keller v LED Technologies Pty Ltd [2010] FCAFC 55
Case
[2010] FCAFC 55
Decision Date

CaseChat Overview and Summary

In the case of Keller v LED Technologies Pty Ltd, the primary dispute revolves around the validity and infringement of registered designs, as well as the infringement of trade practices legislation. The Federal Court of Australia was tasked with deciding whether the registered designs were clear, new, and distinctive, whether the Condor products embodied designs substantially similar to those registered by LED Technologies, and whether the directors of the infringing company were liable for the infringement. Furthermore, the court had to determine if the goods supplied complied with the prescribed consumer product safety standard and whether damages were available under both design infringement and trade practices legislation. The court also considered the liability of directors for contraventions of legislative norms and the appropriateness of denying costs to a successful respondent.

The legal issues that the court had to address included the validity of the registered designs under the Designs Act, the infringement of those designs by the Condor products, the personal liability of the directors for the infringement, and the compliance of the goods with consumer product safety standards. The court had to decide if the registered designs were reasonably clear and succinct, and whether they were new and distinctive when compared with prior art. It also had to assess whether the Condor products embodied designs that were substantially similar in overall impression to the registered designs. Additionally, the court had to determine if the directors were liable for the infringement of the registered designs and whether the goods complied with the relevant safety standards.

The Full Court agreed with the primary judge that the Condor products embodied a design that was substantially similar in overall impression to each of the Designs, and thus the challenge to the primary judge’s conclusion that the Condor products infringed the monopoly in the Designs had to be rejected. The court found that the Designs were valid and there was infringement of the monopoly of LED Technologies in the Designs. Regarding the liability of the directors, the court accepted that Messrs Keller and Armstrong, as directors of Ren and Olsen, were involved in the conduct that constituted the infringement and thus should be held liable. The court found that Mr Keller, who was the moving spirit in Ren and the person principally concerned with the day-to-day operations of Olsen, was aware of the Designs and had conceived the design of the new rear lamps with the intent to compete with LED Technologies.

The court made several orders to give effect to its reasons. The appellants/cross-respondents were required to file and serve a memorandum setting out the terms of the orders within 14 days, followed by the respondent/cross-appellant doing the same within a further 14 days. The appellants/cross-respondents were then granted leave to file and serve a memorandum in reply within an additional 7 days. These orders were intended to clarify the terms of the final judgment and address any submissions regarding costs.

Orders

Orders of the court

1. Within 14 days, the appellants/cross-respondents file and serve a memorandum setting out the terms of the orders required to give effect to the reasons of the Full Court given this day, and including therein such brief submissions as they desire to make on the question of costs both at the first instance and on appeal.

2. Within a further 14 days, the respondent/cross-appellant file and serve a memorandum setting out its response to the memorandum of the appellants/cross-respondents, including therein such brief submissions as are necessary to explain why, if at all, the orders (including any order as to costs at first instance or on appeal) which it proposes differ from the orders proposed by the appellants/cross respondents.

3. The appellants/cross respondents have leave, within a further 7 days, to file and serve a memorandum in reply to the memorandum of the respondent/cross-appellant.

Note:

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

I agree with Besanko J that, on balance, the Condor products embody a design that is substantially similar in overall impression to each of the Designs. In the circumstances, the challenge to the primary judge’s conclusion that the Condor products infringe the monopoly in the Designs must be rejected. Conclusion as to the Designs Act Issues It follows that there was no error on the part of the primary judge in the conclusions that her Honour reached in relation to the issues arising under the Designs Act. That is to say, the Designs are valid and there was infringement of the monopoly of LED Technologies in the Designs. Her Honour’s order that the Corporate Respondents pay damages to LED Technologies for the infringement must stand. However, it is necessary to consider the question of the liability of the Directors for the infringement. LIABILITY OF THE DIRECTORS AS JOINT TORTFEASORS LED Technologies contended that Messrs Keller and Armstrong authorised, directed and procured the conduct of Ren and Olsen that constituted infringement of LED Technologies’ monopoly in the Designs, such that each should be held liable for the infringement by Ren and Olsen. The primary judge accepted that contention. At the time of the relevant conduct, Messrs Keller and Armstrong were directors of Ren and Olsen. Mr Keller accepted that he was the moving spirit in Ren and that he was the person principally concerned with the day to day operations of Olsen. Mr Keller said in cross-examination that he and Mr Armstrong, were “the boss” of Ren in 2006. Mr Keller became aware of the Designs by an online search of the Register. He noticed that the application for registration of the Designs included the Newness Statement. Mr Keller knew that the concept of separate lenses was not new in 2004 and that it was commonplace for rear lamps to be configured in a combination of two, three or four lenses. Mr Keller was struck by the claim in the Statement that there were no visible screws. He therefore conceived the design of a new single lens lamp and also two and three lens rear lamps. In conceiving the design of the proposed new rear lamps, Mr Keller gave careful consideration to the features of a number of lamps in the market, including lamps marketed by LED Technologies. He believed that LED lenses were popular to would-be thieves intending to steal lenses from large vehicles parked in open spaces at night. Mr Keller considered that it would be very difficult to make a light that was totally theft proof. However, he considered that the task of stealing a lens would be more difficult if some further effort were to be required to remove the lens, as distinct from merely prising a lens out with a screwdriver. He therefore conceived the design of a light that included a lens with a lug on opposing edges, which fits into a recessed base and is restrained by a crossover strip fastened with screws. While the screws were not regarded by him as aesthetic, they served the purpose of holding the lenses in place.

Ratio Decidendi

Legal Principle Established

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