Kettle Chip Co Pty Ltd v Apand Pty Ltd

[1993] FCA 546

JUDGMENT NO. 596 , / 7 3 ......

IN THE FEDERAL COURT OF AUSTRALIA	)
NEW SOUTH WALES DISTRICT REGISTRY j	)

No. G767 of 1991

GENERAL DIVISION 1

BETWEEN :  LEVI STRAUSS & CO

First Applicant

LEVI STRAUSS (AUSTRALIAL

PTY LIMITED

Second Applicant

AND :  WINGATE MARKETING PTY
LIMITED

First Respondent

EILEEN MARY WOOLLEY

Second Respondent

JUDGE MAKING ORDER:	LOCKHART J.
WHERE ORDER MADE:	SYDNEY
DATE ORDER MADE:	10 AUGUST 1993

MINUTE OF ORDER

THE COURT ORDERS THAT:

1.   The first respondent by itself its servants and agents be restrained from infringing the registered trade marks A251,717 and B220,174 ("the applicants' Levi's Trade Marks") by using the mark "REVISE" in relation to men's, women's and children's denim jeans or shorts bearing the applicants' Levi's Trade Marks ("REVISE marked LEVI'S jeans") in the course of trade by supply to any person for the purpose of supply or re-supply to the public by any person from retail outlets which supply jeans or

shorts ;

2.   The first respondent by itself its servants and agents be restrained from infringing the following registered trade marks ("the applicants' Trade Marks"):

(a) No. A192,104; (b) NO. B2201174; (c) No. A251,717;

(d) No. A299,544; (e) No. A299,545; (f) No. B302,847; (g) No. B304,665; (h) No. A324,592; (i) No. A328,729; and

(j) No. B442,533

by selling or offering for sale jeans which were originally made by or with the authority of the first applicant or to its designs and specifications; which have previously been sold to retail purchasers in Australia or outside Australia; and which bear one or

more of the applicants' Trade Marks; and which have been stonewashed, patched, cut-off, colour-stripped, bleached,

dyed or painted or have otherwise been substantially altered without the licence of either of the applicants

("Altered LEVI'S Jeans");

3.   The second respondent be restrained from procuring or authorizing the first respondent or any other person to infringe the applicants' Levi's Trade Marks by using the mark "REVISE" in relation to REVISE marked LEVI'S jeans in the course of trade by supply to any person for the purpose of supply or re-supply to the public by any person from retail outlets which supply jeans or shorts;

4.   The second respondent be restrained from procuring or authorizing the first respondent or any other person to infringe the applicants' Trade Marks by selling or offering for sale Altered LEVI'S Jeans;

5.    There be an account taken of the profits earned by the first respondent as from 23 May, 1991 from the sale of REVISE marked LEVI'S jeans including Altered LEVI'S Jeans and that the first respondent pay to the applicants all sums including interest, if any, found to be due upon the taking of such an account;

6. The first respondent file and serve on or before 7 September, 1993 an affidavit disclosing:

(a)

separately in relation to each pair of REVISE marked LEVI'S jeans including Altered LEVI'S Jeans:

(i)	the number of items sold;
(ii)	the gross profit earned; and
(iii)	particulars of all costs ("the costs") the first respondent claims should be deducted in order to arrive at an amount which truly represents the profit earned by the first respondent from such sales;

(b)

the evidence on which the first respondent intends to rely to justify the allocation of the costs against gross profit for the purpose of the taking of an account of profits; and

(c)

any additional evidence on which the first respondent intends to rely to justify apportionment of the profit earned by the first respondent between profit attributable to infringing acts of the first respondent and profit not so attributable;

7.   On or before 14 September, 1993 the first respondent provide to the applicants facilities for inspection and copies of all documents in its possession, custody or control relevant to the taking of the above account of

previously been provided to or taken by the applicants; profits save such documents of which copies have

8.  The first respondent and the second respondent pay the costs of the applicants of the proceeding except the costs of the issue as to care labelling under S. 65D(1) of the T r a d e P r a c t i c e s A c t 1974, in respect of which the applicants shall pay the costs of the respondents. All costs shall be taxed (if not agreed) on a party and party basis and Order 62 Rule 36A(1) shall not apply in relation to costs incurred up to and including 10 August

1993;

9.    The matter be listed for further directions before me on

21 September 1993;

10. There be liberty to apply on three days' notice.

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

. .

IN THE FEDERAL COURT OF AUS TRntIA )

NEW SOUT H WALES DISTRICT REGISTRY No. G767 of 1991

BETWEEN :  LEVI STRAUSS & CQ

First Applicant

LEVI STRAUSS f AUSTRALIA).

PTY LIMITED

Second Applicant

AND :  WINGATE MARKETING PTY
LIMITED

First Respondent

EILEEN MARY WOOLLEY

Second Respondent

10 August 1993

REASONS FOR JUDGMENT

LOCKHART J.

On 9 July 1993 1 gave my reasons for judgment in this

matter, and stood the matter over to hear submissions from
counsel for the parties as to the form of relief.

I have considered both the oral and written submissions

of counsel relating to relief; the orders which I propose to
make are made after considering all the submissions.

I have framed the orders to accord with the statements
made by me in the concluding part of my reasons for judgment
of 9 July 1993, namely, to restrain the respondents only in so

far as it is necessary to do so to bring about the cessation of the offending conduct. Counsel for the applicants asked

for wider forms of order than I am prepared to make and in some instances counsel for the respondents argued in support of narrower orders than in my view are appropriate.

In my reasons for judgment of 9 July 1993 I referred (at 66) to the issue of care labelling and said that this was a minor aspect of the case to which little attention had been given in the course of evidence or argument. I stood the matter over to a date to be fixed so that the parties could make appropriate submissions with respect to this question.

The parties have delivered written submissions to me which traverse this issue carefully. I have considered them and make the following findings.

Levi Strauss asserts that the respondents have breached

S. 65D of the T r a d e P r a c t i c e s A c t 1974 which prohibits a

corporation in trade or commerce from supplying goods that are

consumer, being goods of a kind in respect of which a consumer	intended to be used or are of a kind likely to be used by a
product information standard has been prescribed, unless the corporation has complied with that standard in relation to those goods.

The responsible Minister made a declaration pursuant to

S. 65E(1) of the T r a d e P r a c t i c e s A c t that Australian Standard

1957-1987, Care Labelling of Clothing, Household Textiles,

Furnishings, Upholdstered Furniture, Bedding, Piece Goods and Yarns approved by the Standards Association of Australia on September 22, 1987 and published on November 2, 1987 was a consumer product information standard for the purposes of section 65D of the T r a d e P r a c t i c e s A c t in respect of goods including clothing. Jeans are not goods exempt from care labelling or care instructions under that declaration.

Australian Standard 1957-1987 ("the Standard") specifies the requirements for proper care labelling which must be permanent and include appropriate and adequate instructions for the care of an article. The label must be accessible for examination by a prospective purchaser. If the permanent label is not accessible because of the manner in which the garment is packaged, displayed or folded, the same care instructions must be provided on the package or on a removable label or ticket attached to the article. No individual letter may be less than 1.5mm high.

Injunctions restraining the conduct of corporations which

infringe S. 65D(1) may be granted under ss. 79 and 80 of the

T r a d e P r a c t i c e s A c t .

In its statement of claim Levi Strauss alleges a breach by the respondents of the Standard by failing to provide a permanent care label and/or an additional removable care label. It is not pleaded by Levi Strauss that the labels attached by Wingate to its articles of clothing are inadequate or not in conformity with the standard. I accept the submission of counsel for the respondents that the sufficiency of the label affixed is not in issue in this proceeding. The standard requires an additional removable care label or ticket only where it is impossible for a prospective purchaser to examine the permanent care label because of the manner in which an article is packaged, displayed or folded.

A breach of S. 65D constitutes a criminal offence and carries a substantial penalty. Injunctions in respect of breaches of S. 65D should be granted only on clear proof of the acts of infringement to the requisite standard of proof.

If there is little or insufficient likelihood of repetition of any conduct in breach of the section, the Court may take that circumstance into account and refuse to grant an

injunction: Pye Industry Sales Pty Limited v Trade Practices

Commission [l9791 ATPR 40-124.

The evidence relied upon by Levi Strauss to establish a breach of S. 65D is not sufficient in my opinion to make out its case. Reliance was placed upon notes taken by Lynda Gardner, a retail services representative employed by the second applicant, which state that "REVISE" jeans do have a care label that is stamped on the inside. The form of care label stamp used by Wingate is set out in the letter of 26 August 1991 from the respondents' solicitors and reads as follows :

"THIS GARMENT IS SECOND HAND
WARM MACHINE WASH, TUMBLE DRY
WARM IRON, 100% COTTON
MADE IN U.S.A."

There is no sufficient evidence that the permanent care label comprised by this stamp of Wingate is inaccessible for inspection by a prospective purchaser. MS Gardner does not state any difficulty experienced by her in inspecting the stamp.

Mrs Woolley has sworn that Wingate has complied with the requirements of S. 65D and with the relevant product information. I am not persuaded that Wingate intended not to comply with all product labelling standards.

There are no "REVISE" marked "LEVI'S" jeans which do not

bear a permanent care label in evidence that were purchased

later than 23 July 1991.

Miss Batzogianni, a full time service assistant in the Miss Shop at Myer, Chadstone, Victoria, who sold "REVISE" jeans between about February 1992 and October 1992 gave evidence which is inconclusive. She says that she "did not recall" seeing care labels. But she did not state that she had examined "REVISE" jeans and found no care label attached.

The evidence of Annie Sargood, Customer Services Manager of the Miss Shop at Myer, Chadstone, who sold "REVISE" jeans between about February 1992 and October 1992 is in my view on careful analysis to substantially the same effect as the evidence of Miss Batzogianni.

Mrs Woolley gave evidence that an officer of ~yer/Grace

Bros. responsible for checking compliance with care labelling requirements sent a facsimile transmission advising of the return of goods for failure to comply on 18 March 1991. Mrs Woolley's evidence is to the effect that such concerns were resolved because the people checking for care labels were not looking in the place to which they had been applied. Myer/Grace Bros. continued to acquire "REVISE" marked "LEVI'S" jeans. This evidence suggests to my mind that care labelling requirements were thereafter met.

Mrs Woolley was not cross examined further about the problems which were resolved with Myer/Grace Bros., or

generally as to compliance.

The isolated incidents referred to by the applicants do not constitute clear proof in my opinion of a breach or continuing breach of S. 65D. I am not satisfied that there is any continuing conduct on this issue which would be detrimental to the public interest.

The issue of care labelling received, as I mentioned at page 66 of my reasons for judgment of 9 July 1993, little attention in the course of evidence or argument.

The evidence relied upon by Levi Strauss to establish breach of S. 65D falls far short of satisfying me that there have been breaches of the section by Wingate. Even if there was sufficient evidence of some isolated breaches, they occurred many months ago. I am satisfied on the whole of the evidence (including the evidence of Mrs Woolley which, on this point, I accept) that there is no necessity for an injunction to issue even if contravention had been established, which in my opinion it has not.

I decline to grant relief on this issue.

I certify that this and the preceding six (6) page? are a true copy of the Fe SODS for	HonourabLe Mr. Julst$ce Lockhart.	judgment hereio; ff the
Associate Dated: 10 August 1993

Counsel for the Applicants	D K Catterns QC
Solicitors for the Applicants :	Baker and McKenzie

Counsel for the Respondents	:	J W S Peters
Solicitors for the Respondents:	Stedman Cameron
Date of Hearing	28 July 1993
Date of Judgment	10 August 1993