Lamont v Malishus & Ors (No.4)
[2019] FCCA 3206
•14 November 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LAMONT v MALISHUS & ORS (No.4) | [2019] FCCA 3206 |
| Catchwords: INTELLECTUAL PROPERTY – TRADE MARKS – Action for infringement of registered trade mark – whether use of a word as part of domain name constituted the use of the word as a trade mark – whether the domain name that included the word was substantially the same or deceptively similar to registered trade mark – whether goods to which the word was applied were sold or offered for sale in Australia – whether the posting of material on Facebook that included the word constituted the use of the word as a trade mark – infringement established – remedies awarded. |
| Legislation: Business Names Registration Act 2011 (Cth), s.51 Competition and Consumer Act 2010 (Cth), Schedule 2, s.18 Federal Circuit Court Act 1999 (Cth), s.76 Trade Marks Act 1995 (Cth), ss.4, 17, 88(2)(a), 120, 126 |
| Cases cited: Christian v Société des Produits Nestlé SA (No 2) [2015] FCAFC 153 Coca-Cola Co v All-Fect Distributors Ltd (1999) 47 IPR 481 Halal Certification Authority Pty Limited v Scadilone Pty Limited [2014] FCA 614 Paramount Pictures Corporation v Hasluck [2006] FCA 1431 Lamont v Malishus & Ors [2018] FCCA 423 Lamont v Malishus & Ors (No.3) [2018] FCCA 1294 Mantra group Pty Ltd v Tailly Pty Ltd (No 2) [2010] FCA 291 QS Holdings Sarl v Paul’s Retail Pty Ltd (No 2) [2011] FCA 1038 Solahart Industries Pty Ltd v Solar Shop Pty Ltd (No 2) [2011] FCA 780 Sports Warehouse, Inc v Fry Consulting Pty Ltd [2010] FCA 664 The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407 Ward Group Pty Ltd v Brodie & Stone Plc [2005] FCA 471 WD & HO Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182 |
| Applicant: | DARREN LAMONT |
| First Respondent: | MALISHUS LIMITED NZCN: 4429858 |
| Second Respondent: | ROBERT JURCIC |
| Third Respondent: | CLINTON SELWYN |
| Fourth Respondent: | RIMA NICHOLAS |
| File Number: | SYG 2008 of 2014 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 10 December 2018 |
| Date of Last Submission: | 10 December 2018 |
| Delivered at: | Sydney |
| Delivered on: | 14 November 2019 |
REPRESENTATION
| Applicant in person |
| Second and Third Respondent in person and on behalf of the First Respondent |
| No appearance by or on behalf of the Fourth Respondent |
THE COURT DECLARES THAT
From around July 2011 to around August 2013 the second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, infringed within the meaning of s.120 of the Trade Marks Act 1995 (Cth) (TM Act) Australian registered trade mark no. 1127629 in class 25 (first Malishus Trade Mark), and from 30 October 2012 until around August 2013 Mr Jurcic and Mr Selwyn infringed Australian registered trade mark no. 1523037 in class 25 (second Malishus Trade Mark), by using the word “Malishus” as part of the domain name that resolved to a website that displayed and offered for sale clothing that contained marks and words which included the word “Malishus”.
From around July 2011 the second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, infringed within the meaning of s.120 of the TM Act the first Malishus Trade Mark, and from 30 October 2012 the second Malishus Trade Mark, and, from 17 August 2014 Australian registered trade mark no. 1640398 in class 25 (fourth Malishus Trade Mark), by selling or offering to sell in Australia clothing and headgear that contained marks and words which included the word “Malishus”.
From around:
a)July 2011 until around November 2015 the second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, infringed within the meaning of s.120 of the TM Act the first Malishus Trade Mark;
b)30 October 2012 until around November 2015, the second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, infringed within the meaning of s.120 of the TM Act the second Malishus Trade Mark; and
c)17 August 2014 until around November 2015, the second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, infringed within the meaning of s.120 of the TM Act the fourth Malishus Trade Mark,
by posting material on Facebook that included the use of the word “Malishus” in connection with clothing depicted in the material.
THE COURT ORDERS THAT
The second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, are each restrained from using in Australia as a trade mark any word in relation to clothing, footwear, or headgear that is substantially the same or deceptively similar to the word “Malishus”.
By 28 November 2019 the second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, take all necessary and reasonable steps to cancel the registration of the domain names and >
The registration of the Australian Business Name “Malishus” ABN 12 404 973 516 be cancelled.
By 28 November 2019 the second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, lodge a copy of these orders with the Australian Securities and Investments Commission.
By 12 December 2019 each of the second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, file and serve an affidavit in which:
a)they state whether they hold in their possession or control any clothing or headgear that contain any mark or name that includes the word “Malishus” (Infringing Items);
b)if they hold any Infringing Items, they identify the number of Infringing Items they hold; and
c)they state they have either destroyed all or some of the Infringing Items or to the extent they have not destroyed any of the Infringing Items they have removed from such items the word “Malishus”.
Judgment against the second and third respondents jointly and severally for nominal damages in the amount of $10.
Judgment against the second and third respondents jointly and severally for additional damages together with interest in the amount of $32,686.75.
There be liberty to apply on such notice as the circumstances warrant in relation to any question arising on the implementation or operation of any of these orders.
The second respondent, Mr Jurcic, and the third respondent, Mr Selwyn, pay to the applicant such costs to which the applicant may be entitled as an unrepresented party.
The application is otherwise dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2008 of 2014
| DARREN LAMONT |
Applicant
And
| MALISHUS LIMITED NZCN: 4429858 |
First Respondent
| ROBERT JURCIC |
Second Respondent
| CLINTON SELWYN |
Third Respondent
| RIMA NICHOLAS |
Fourth Respondent
REASONS FOR JUDGMENT
Introduction
The applicant, Mr Lamont, claims that one or more of the four respondents infringed, within the meaning of s.120 of the Trade Marks Act 1995 (Cth) (TM Act), one or more of four registered trade marks of which Mr Lamont is the owner (Malishus Trade Marks). Each of the trade marks includes the word “Malishus”. The earliest registered trade mark comprises the words “Malishus Koncept” (first Malishus Trade Mark) and certain images. It was registered on 7 June 2007 in respect of clothing, footwear, and headgear; and it took effect on 3 August 2006. The other three trade marks were registered on 30 October 2012, 9 August 2014, and 17 August 2014, the first and third of these having been registered in respect of clothing, footwear, and headgear; and the second in respect of music. (I will refer to these trade marks as the “second Malishus Trade Mark”, the “third Malishus Trade Mark”, and the “the fourth Malishus Trade Mark” respectively).
Mr Lamont claims the respondents infringed one or more of the Malishus Trade Marks in a number of ways. One is by the second respondent, Mr Jurcic, or the third respondent, Mr Selwyn, or both registering and using the domain names and A second way is by the respondents selling in Australia T-shirts and other items of apparel to which marks that include the word “Malishus” were applied. And a third way is by Mr Jurcic, Mr Selwyn, and, to a lesser extent, the fourth respondent, Mr Nicholas, posting material on Facebook that included the use of the word “Malishus” in connection with clothing.
Mr Jurcic and Mr Selwyn admit Mr Lamont is the owner of the Malishus Trade Marks; they admit they own the domain names; they admit they registered and used the word “Malishus” as a business name; they admit posting material on Facebook that included the word “Malishus”; and they admit ordering some clothing in Australia to which there was affixed words and marks that included the word “Malishus”. Mr Jurcic and Mr Selwyn deny, however, that they undertook these activities in connection with the promotion or carrying on of any business in Australia. They say they undertook these activities in connection with the use in overseas markets of trade marks they registered in New Zealand, the United States of America, and the United Kingdom that include the word “Malishus”.
Two principal questions, therefore, arise. The first is whether the acts of the respondents Mr Lamont alleges constitute infringement of one or more of the Malishus Trade Marks (Alleged Infringing Acts) constitute the use as a trade mark of a sign that is substantially identical with, or deceptively similar to, any of the Malishus Trade Marks in relation to clothing, footwear, or headgear. Assuming that is answered in the affirmative, the second question is whether one or more of the Alleged Infringing Acts occurred in Australia. If both these questions are answered in the affirmative, one or more of the Alleged Infringing Acts will constitute an infringement of one or more of the Malishus Trade Marks within the meaning of s.120 of the TM Act.
A third question also arises; and that is whether the Alleged Infringing Acts constitute conduct that is misleading or deceptive. That question arises because Mr Lamont alleges that at all relevant times he had a reputation in connection with the use of “Malishus”, and that the respondents’ conduct constituted misleading or deceptive conduct in contravention of s.18 of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (CC Act).
Arrangement of reasons
Although I have identified the principal issues that arise in this proceeding, it would be useful, particularly because the parties who appeared at the hearing before me are not legally represented, that I set out the material on the basis of which I have concluded these are the principal issues. That will first require me to set out the allegations made in the amended statement of claim (ASC), and the response to those allegations made in the defence filed by the first three respondents (Malishus Limited, Mr Jurcic, and Mr Selwyn) (respondents). Mr Lamont filed the ASC pursuant to leave I granted on 18 March 2018;[1] and the respondents filed their defence on 4 June 2018. The fourth respondent, Mr Nicholas, has not filed a defence, and he otherwise has not participated in the proceeding. I will also identify and set out the evidence. I will then consider the following questions:
a)Has Mr Nicholas been properly served with this proceeding?
b)Have any of the respondents (including Mr Nicholas, assuming he has been properly served) used as a trade mark a sign that is substantially identical with, or deceptively similar to, any of the Malishus Trade Marks in relation to clothing, footwear, or headgear?
c)Assuming (b) is answered in the affirmative, has any of that use occurred in Australia?
d)Assuming (c) is answered in the affirmative, to what remedies is Mr Lamont entitled?
[1] Mr Lamont filed a document titled ““Amended” Statement of claim” on 19 April 2018, but on 27 June 2018 Mr Lamont filed a further document also titled ““Amended” Statement of claim”. This document is identical with the document Mr Lamont filed on 19 April 2018, except he included the names of all four respondents. In these reasons, when I refer to the amended statement of claim, I intend to refer to the amended statement of clam Mr Lamont filed on 27 June 2018.
Finally, I will consider whether the Alleged Infringing Acts constitute a contravention of s.18 of Schedule 2 to the CC Act
There is one further preliminary matter to note. I made the order on 18 March 2018 granting Mr Lamont leave to file an amended statement of claim on the basis of reasons for judgment I published on that day (earlier reasons).[2] The earlier reasons also consider an application the second respondent, Mr Jurcic, made that the proceeding be summarily dismissed. In the earlier reasons I describe in some detail the evidence on which Mr Lamont said he intended to rely at the final hearing;[3] and Mr Lamont has tendered the same evidence at the final hearing. These reasons for judgment, therefore, are to be read as incorporating those passages from the earlier reasons which describe the evidence on which Mr Lamont relies.
[2] Lamont v Malishus & Ors [2018] FCCA 423.
[3] Lamont v Malishus & Ors [2018] FCCA 423, at [57]-[122]
The ASC and defence
The ASC begins by identifying the parties. It alleges Mr Lamont is the creator of, and is, and at all material times was, the owner of the “fancily and uniquely spelt word Malishus within any form or class of trade mark in Australia”; and Mr Lamont is, and at all material times was the registered owner of the Australian businesses known as “Susstream Clothing n Beyond”, “Malishus Clothing”, and “Malishus Industries”.[4] The respondents deny Mr Lamont is the first creator of the word “Malishus”. They admit Mr Lamont registered the business names “Malishus Clothing” and “Malishus Industries”, but say he did so to build an illusion of trade mark use.[5]
[4] ASC, [1]
[5] Defence, [1]
The ASC then identifies the respondents as follows:
a)The first respondent (Malishus Limited) is a company incorporated under the Corporations Act 2001 (NZ); it was registered in New Zealand on around 17 May 2013 for “Clothing wholesaling”; and it is a corporation within the meaning of the CC Act.[6] The respondents admit these matters.[7]
b)The second respondent, Mr Jurcic, at all material times lived in Victoria, is the owner and director of Malishus Limited, and is the registered owner of the business name “Malishus” in Victoria and in Queensland.[8] Mr Jurcic admits these matters.[9]
c)The third respondent, Mr Selwyn, at all material times lived in Victoria, is the owner and director of Malishus Limited, and is the registered owner of the business name “Malishus” in Victoria and in Queensland.[10] Mr Selwyn admits these matters.[11]
d)The fourth respondent, Mr Nicholas, at all material times lived in New Zealand, and he was a co-director and shareholder of Malishus Limited.[12] The respondents admit Mr Nicholas was temporarily a shareholder of Malishus Limited, but otherwise deny these matters.[13]
[6] ASC, [2]
[7] Defence, [2]
[8] ASC, [3]
[9] Defences, [3(a)-(d)]
[10] ASC, [4]
[11] Defences, [4(a)-(d)]
[12] ASC, [5]
[13] Defence, [5]
The ASC alleges, and the respondents admit, that Mr Lamont has been the registered owner of the following trade marks (these being the “Malishus Trade Marks” I have already identified):[14]
[14] ASC, [6]; Defences, [6]
TM No
Description
Registered
Goods and services
1127629
[Images]
Word(s): Malishus
Koncept
03 August, 2006 until 03 August 2026
Class 25: Clothing, footwear, headgear
1523037
MALISHUS
Word: Malishus
30 October 2012 Until 30 October 2022
Class 25: Clothing, footwear, headgear
1639005
Word: Malishus
9 August 2014
Class 41: Music
1640398
Word: Malishus
17 August 2014
Class 25: Apparel
The ASC alleges Mr Lamont is also the registered owner of:
a)“accepted” Australian trade mark application TM1640397 – “Malishus Koncept” filed on 17 August 20914 for class 25 - Apparel (clothing, footwear, headgear); [15] and
b)Australian trade mark application TM1779371 – “Malishus” for class 35 – Retail clothing shop services and around 72 other goods and services in class 35.[16]
The respondents admit (b), but deny (a).[17]
[15] ASC, [7]
[16] ASC, [8]
[17] Defence, [7], [8]
The ASC alleges, and the respondents admit, that at all material times, Mr Jurcic and Mr Selwyn have been the owners of the following registered trade marks (J S Trade Marks):[18]
[18] ASC, [9]
TM No
Description
Registered
Goods and services
1280495
Image together with “Malishus”
10 January 2009
Class 9 – Sunglasses
1178782
Image together with “Malicious”
29 May 2007 Assigned: 22 July 2013
Class 25 – Clothing
1587033
Image together with “Malishus”
22 October 2013
Classes 18, 28 and 41
The ASC alleges Malishus Limited and Mr Selwyn are the owners of Australian application TM1464367 – M Malishus (device) filed 10 October 2011 for goods and services in class 25 – Apparel (clothing, footwear, headgear).[19] The respondents deny these allegations, although they admit they applied to register such a trade mark.[20]
[19] ASC, [10]
[20] Defence, [10]
The ASC alleges that since around mid-2005 Mr Lamont:
a)has been engaged in his created word “Malishus” with the bona fide intention of using it within the course of trade and commerce in Australia and abroad for his clothing bands,[21] and as his music performer name,[22] and
b)has been a supplier of goods and services to persons in Australia for the provision of music performance and music.[23]
[21] ASC, [11]
[22] ASC, [12]
[23] ASC, [13]
The respondents deny Mr Lamont had a bona fide intention to use the word “Malishus”. They allege Mr Lamont originally registered the name “Malishus Koncept”, but only later registered the name “Malishus” after he discovered Mr Jurcic and Mr Selwyn owned an identically spelt name.[24]
[24] Defence, [11]
The ASC alleges,[25] but the respondents deny,[26] Mr Lamont has extensively promoted the goods and services for which the Malishus Trade Marks were registered as follows:
a)by performing his music to people and pubs and clubs stating his performer name as “(MC) Malishus” or sometimes just “Malishus”;
b)by performing his music with other buskers on the streets stating his name as “(MC) Malishus” or sometimes just “Malishus”;
c)by performing his music at many Australian television auditions being “Australian Idol”, “Australia’s Got Talent”, and “X-Factor”;
d)by performing at many karaoke and open mic nights; and
e)by handing out demo CDs to people to promote his name “Malishus” and music marked with “Malishus”.
[25] ASC, [14]
[26] Defence, [12]
The ASC alleges,[27] but the respondents deny,[28] that Mr Lamont has extensively promoted the supply of goods and services to persons in Australia for the provision of music performances and music by having “traded/advertised” his goods and services as follows:
a)on “Myspace” since around May 2010 to at least 2013 displaying 6,801 profile views;
b)on his “Malishus Inc Krew Facebook” group page since around March 2010;
c)on his Facebook profile “Lamont Malishus” since around March 2012;
d)on his “Malishus Koncept Facebook” page since around March 2012;
e)on his “Malishus Facebook” music page since around January 2013;
f)on his “Star Now” profile since around at least 2010 which displays 1,461 profile views; and
g)on his “Malishus Sound Cloud” profile since around early 2013 which displays 280 song plays.
[27] ASC, [15]
[28] Defence, [15]
The ASC alleges, [29] but the respondents deny,[30] that since around the middle of 2008 Mr Lamont has been a supplier of goods and services to persons in Australia for the provision of apparel by reference to the Malishus Trade Marks, and he has promoted these goods and services by reference to the Malishus Trade Marks as follows:
[29] ASC, [17], [18], [19]
[30] Defence, [17], [18], [19]
a)Mr Lamont traded from his residence from around the middle of 2008;
b)since 2009 Mr Lamont has “traded/advertised” at markets in the Shoalhaven area;
c)in 2009 Mr Lamont advertised his business in a local newspaper for 8 weeks;
d)since around 2009 Mr Lamont has had his business listed in the telephone directory; and in 2009 Mr Lamont enquired at a shop for placing product; and
e)by promoting the goods and services online as follows:
i)in August and September 2009 Mr Lamont “traded/advertised” his goods and services on eBay under the account name “Malishus81”;
ii)Mr Lamont “traded/advertised” his goods and services on “Myspace” since around May 2010 to at least 2013 displaying 6,801 profile views;
iii)Mr Lamont “traded/advertised” his goods and services on Malishus Inc Knew Facebook” group page since around March 2010;
iv)Mr Lamont “traded/advertised” his goods and services on his Facebook profile “Lamont Malishus” since around March 2012
v)Mr Lamont “traded/advertised” his goods and services on his “Malishus Koncept Facebook” page since around March 2012;
vi)Mr Lamont “traded/advertised” his goods and services on his “Malishus Facebook” music page since around January 2013; and
vii)Mr Lamont “traded/advertised” his goods and services on his “Star Now” profile since around at least 2010 which displays 1,461 profile views
The ASC alleges that at all material times from around February 2013 Mr Lamont was the registered owner of the domain names and The respondents deny Mr Lamont is the owner of either or although they admit Mr Lamont is the owner of ASC, [23]
[32] Defence, [23]
The ASC alleges that because of Mr Lamont’s use of the Malishus Trade Marks he has attained a substantial reputation among the public in Australia and abroad for the provision of music performance and music, and apparel (clothing, footwear, and headgear).[33] The respondents deny this.[34]
[33] ASC, [27]
[34] Defence, [23]
The ASC then sets out the Alleged Infringing Acts that occurred up to 18 July 2014, being the day on which Mr Lamont commenced this proceeding. These allegations, and the respondents’ answers to each of those allegations, are as follows:
No.
ASC
Defence
1
Since at least the middle of 2010 Mr Jurcic and Mr Selwyn have supplied to the public in Australia goods and services relating to apparel branded with the word “Malishus”.[35]
The respondents deny this claim, although they admit Mr Jurcic and Mr Selwyn supplied branded apparel to close friends and family. Mr Jurcic and Mr Selwyn are entrepreneurs trying to build a legitimate brand abroad. They had strong support from friends and family who insisted on purchasing a small number of garments to help cover the production cost, and support their global brand building endeavours.[36]
2
Mr Jurcic has been the registered owner of the domain name
Mr Jurcic admits this.[38]
3
Mr Jurcic is or was the registered owner of the website at which stated “Hosted in Australia”, and “Get Inflicted – clothing urban wear tees hoods”.[39]
Mr Jurcic admits this, but denies the website contained the statement “Hosted in Australia”. Mr Jurcic alleges the website was always hosted in the United States of America.[40]
4
On 12 October 2007 Mr Jurcic and Mr Selwyn applied in the United States of America for TM77303424 Malishus for class 25.[41]
Mr Jurcic and Mr Selwyn admit this.[42]
5
In around October 2007 Mr Jurcic became the registered owner of the domain name
Mr Jurcic admits this.[44]
6
On 7 November 2008 Mr Jurcic and Mr Selwyn filed in the United States of America for TM3894452 Malishus for class 25.[45]
Mr Jurcic and Mr Selwyn admit this.[46]
7
Mr Jurcic created a “LinkedIn” in which he described himself as the co-founder of “Malishus Apparel Melbourne Australia”.[47]
Mr Jurcic admits this.[48]
8
On 13 January 2009 Mr Jurcic and Mr Selwyn applied to register a trade mark in the United Kingdom.[49]
Mr Jurcic and Mr Selwyn admit this.[50]
9
On around 7 May 2010 Mr Jurcic and Mr Selwyn ordered to have created and made from “Disent Designs” a number of Malishus logo-based designs and artwork.[51]
Mr Jurcic and Mr Selwyn admit they had design work completed by a freelance designer but deny it was for the purpose of commercial trade in Australia. They say it was for the purpose of trading in New Zealand and the United States.[52]
10
On around 29 July 2010 Mr Jurcic and Mr Selwyn ordered to have made from Super Special Pty Ltd branded clothing for sale in Australia.[53]
Mr Jurcic and Mr Selwyn admit they had T-shirts printed by an Australian screen printer, but deny it was for the purpose of commercial trade in Australia. They say it was for the purpose of trading in New Zealand and the United States.[54]
11
From around August 2008 Mr Jurcic and Mr Selwyn have been the owner of ABN 12 404 973 516 in Queensland.[55]
Mr Jurcic and Mr Selwyn admit this.[56]
12
On or before 29 October 2010 Mr Jurcic created and account profile on the online site “Behance” named “Malishus Limited” which followed 34 people.
Mr Jurcic admits this.[57]
13
On 12 March 2011 Mr Jurcic and Mr Selwyn created a Facebook page that was “excessively displaying promoting and trading their Malishus branded goods and services within class 25 Apparel in Australia”.[58]
Mr Jurcic and Mr Selwyn admit they created the Malishus Facebook profile, but they deny they excessively promoted Malishus branded goods and services to an Australian consumer; they say that the Malishus Facebook profile was created to target the New Zealand and the United States markets.[59]
14
Since around 12 March 2011 Mr Selwyn had its “Malishus website and domain name” active and engaging in conduct by supporting advertising and trading Malishus branded clothes.[60]
Mr Jurcic denies that advertised, marketed, or engaged in any activities aimed at the Australian market.[61]
15
On about 28 March 2011 Mr Jurcic purchased twice from America “Flat Fitty LLC” an order of fitted caps for the purpose of trade in Australia.[62]
Mr Jurcic admits he purchased a few fitted caps from a North American supplier, but denies he did so for the purpose of trade in Australia; he says the caps were design samples.[63]
16
On about 2 June 2011 Mr Selwyn ordered from “Phresh Creative” in Victoria “digital transfers Qty 50 file setup vinyl press” for the purpose of trade in Australia.[64]
Mr Selwyn admits he purchased printed T shirts from “Phresh Creative”, but denies he did so for the purpose of trade in Australia. Mr Selwyn says the T-shirts were given away to friends and family in New Zealand to promote the brand in New Zealand.[65]
17
On about 21 June 2011 Mr Jurcic ordered from Machine Industries in Victoria an “excessive amount of Malishus branded clothing” for $10,035.30.[66]
Mr Jurcic admits he ordered T-shirts from a local supplier known as “Machine Industries”. He denies the order was “excessive” by industry standards, and denies the T-shirts were for the purpose of trade in Australia. Mr Jurcic says the shirts “were our first line and the majority were sent to NZ for the start of promotional activities and the remaining stock was given away to friends and family”.[67]
18
On about 7 June 2011 Mr Jurcic ordered from Dupack Pty Ltd in Queensland to have 3,206 woven labels to be printed and branded with the word “Malishus” for the purpose of trade in Australia.[68]
Mr Jurcic admits he ordered woven labels Dupack Pty Ltd in Queensland, but denies he did so for the purpose of trade in Australia. Mr Jurcic says they were for the purpose of trading in New Zealand and the United States.[69]
19
On about 2 August 2011 Mr Jurcic ordered from Dupack Pty Ltd 3,000 Malishus swing tags with the word “Malishus” and “1 die cut” for the purpose of trade in Australia.[70]
Mr Jurcic admits he ordered swing tags Dupack Pty Ltd in Queensland, but denies he did so for the purpose of trade in Australia. Mr Jurcic says they were for the purpose of trading in New Zealand and the United States.[71]
20
On about 13 August 2011 Mr Selwyn ordered “black fitted cap [sic]” from China for shipping to “Malishus Docklands Victoria Australia” for the purpose of trade in Australia.[72]
Mr Selwyn admits he purchased some caps from a Chinese supplier, but denies he did so for the purpose of trade in Australia. Mr Jurcic says they were for the purpose of trading in New Zealand and the United States.[73]
21
On 16 September 2011 Mr Selwyn ordered from China 300 “hats/caps” the name “Malishus” oriented on them to be shipped to “MALISHUS – Mr Selwyn Docklands Victoria”.[74]
Mr Selwyn admits he purchased 300 caps from a Chinese supplier, but denies he did so for the purpose of trade in Australia. He says the caps were not sold in Australia.[75]
22
On around 7 November 2011 Mr Selwyn registered in New Zealand as a trade mark for class 25 “M Malishus Est.@ Birth”.[76]
Mr Selwyn admits this.[77]
23
On a day not specified Mr Jurcic or Mr Selwyn ordered 255 Malishus Basketball Singlets from Jiaxing Mengdi Import and Export Co. Ltd in China for USD3,595.50.[78]
Mr Selwyn admits this.[79]
24
Mr Selwyn created a “LinedIn” profile stating that he was a brand developer at “MALISHUS Apparel Melbourne Australia” from 2012, and the co-founder of a streetwear brand named Malishus.[80]
Mr Selwyn admits this.[81]
25
On about 2 February 2012 Mr Selwyn uploaded onto “Nike Talk” under the name of “Lyfeis2short” “Introducing Malishus – streetwear brand”.[82]
Mr Selwyn admits this.[83]
26
On about 4 March Mr Jurcic updated his Facebook page “Robbie Jay” cover displaying Malishus T-shirts.[84]
Mr Jurcic admits that his personal Facebook page featured a background image with individuals wearing Malishus branded garments but denies it was for the purpose of ay advertising in Australia. He says that Facebook is a global platform, and is not contained to a specific territory. The image was a representation of Mr Jurcic’s global brand.[85]
27
Since at least March 2012 the “Malishus Facebook” page of Mr Jurcic and Mr Selwyn displayed posts regarding the promotion of music within Australia.[86]
Mr Jurcic and Mr Selwyn admit this, but deny they were part of any commercial promotion in Australia.[87]
28
On about 29 June 2012 Mr Jurcic ordered clothing from Forbes Clothing which were “printed and branded with the word Malishus”.[88]
Mr Jurcic admits he ordered a small batch of T-shirts from a local supplier known as “Forbes Industries”, but he denies he did so for the purpose of trading in Australia.[89]
29
On about 17 July 2012 Mr Jurcic or Mr Selwyn posted on their Malishus clothing Facebook page a Malishus Skamma T-shirt stating to the effect of: “Another Malishus collaboration with Skamma”, and that “Malishus has a few of these limited Ts [sic] to give away to our FB fans”, and that Mr Jurcic and Mr Selwyn were selling these T-shirts for around $50 in Australia.[90]
Mr Jurcic and Mr Selwyn admit they collaborated with Skamma Gym, but deny they were selling the T-shirts. The further say that at no time did they receive any money from the T-shirts.[91]
30
From around at least early 2013 Mr Nicholas displayed and promoted on his Facebook page the Malishus brand in Australia.[92]
The respondents say they do no plead to this.[93]
31
Mr Jurcic and Mr Selwyn displayed on their Facebook page clothing posts with the words “Malishus URFKD”. The T-shirt is in Australian colours of green and gold, and Mr Lamont took this as a targeted attack on him.[94]
Mr Jurcic and Mr Selwyn admit they displayed a T-shirt design featuring the letters “URFKT”, but otherwise deny the allegations.[95]
32
In around April 2013 Mr Jurcic and Mr Selwyn posted on their Malishus clothing Facebook page posts stating that Southside MMA and Malishus in Alice Springs displaying many “Malishus 1” singlets being worn and promoted in Australia.[96]
Mr Jurcic and Mr Selwyn admit they displayed a Facebook post featuring a team of fighters wearing a Malishus branded garment, but they deny the post was made for Australian promotion.[97]
33
In around April 2013 Mr Jurcic and Mr Selwyn sponsored the “Australian “hip hop rapper” “leagus nation” and displayed post on their Malishus clothing Facebook page with the Australian rapper wearing a Malishus Tshirt.[98]
Mr Jurcic and Mr Selwyn admit they displayed a post featuring a rapper named “Leagus Nation”, but deny there was a sponsorship agreement. They say that the word “sponsorship” “was used loosely by the musical artist to describe a handful of free garments we provided to support a fellow Kiwi and musician”.[99]
34
On 17 May 2013 Malishus Limited was registered in New Zealand for clothing wholesaling.[100]
The respondents admit this.[101]
35
In the middle of 2013 Mr Jurcic and Mr Selwyn registered the domain name
Mr Selwyn admits this.[103]
36.
In around July 2013 Mr Nicholas went to Melbourne for business meetings and brand promotions in Australia.[104]
Mr Jurcic and Mr Selwyn admit Mr Nicholas visited Melbourne, but deny the visit was for the purpose of bran promotion.[105]
37
In around October 2013 Mr Nicholas went to Queensland for business meetings and brand promotions in Australia.[106]
Mr Selwyn denies this allegation.[107]
38
From around 30 October 2013 Mr Selwyn’s Facebook page displayed and promoted Malishus clothing uploads.[108]
Mr Selwyn admits he mentioned Malishus clothing on his Facebook page in around October 2013.[109]
[35] ASC, [29]
[36] Defence, [29]
[37] ASC, [30]
[38] Defence, [30]
[39] ASC, [31]
[40] Defence, [31]
[41] ASC, [32]
[42] Defence, [32]
[43] ASC, [33]
[44] Defence, [32]
[45] ASC, [35]
[46] Defence, [35]
[47] ASC, [36]
[48] Defence, [36]
[49] ASC, [37]. This paragraph does not describe the trade mark for which an application was made. It is clear, however, that it is intended to be a reference to the application to register as a trade mark the word “Malishus” and the Malishus Logo for class 9 (Sunglasses), class 18 (backpacks, luggage, duffle bags, leather wallets, pocket wallets), and class 25 (clothing, footwear, headgear) – see earlier reasons, [84]
[50] Defence, [37]
[51] ASC, [38]
[52] Defence, [38]
[53] ASC, [39]
[54] Defence, [39]
[55] ASC, [40]
[56] Defence, [40]
[57] Defence, [41]
[58] ASC, [42]
[59] Defence, [42]
[60] ASC, [43]
[61] Defence, [43]
[62] ASC, [44]
[63] Defence, [44]
[64] ASC, [45]
[65] Defence, [45]
[66] ASC, [46]
[67] Defence, [46]
[68] ASC, [47]
[69] Defence, [47]
[70] ASC, [48]
[71] Defence, [48]
[72] ASC, [49]
[73] Defence, [49]
[74] ASC, [50]
[75] Defences, [50]
[76] ASC, [51]
[77] Defence, [51]
[78] ASC, [52]
[79] Defence. [52]
[80] ASC, [54]
[81] Defence, [54]
[82] ASC, [55]
[83] Defence, [55]
[84] ASC, [56]
[85] Defence, [56]
[86] ASC, [57]
[87] Defence, [57]
[88] ASC, [59]
[89] Defence, [59]
[90] ASC, [60]
[91] Defence, [60]
[92] ASC, [62]
[93] Defence, [62]
[94] ASC, [63]
[95] Defence, [63]
[96] ASC, [64]
[97] Defence, [64]
[98] ASC, [66]
[99] Defence, [66]
[100] ASC, [67]
[101] Defence, [67]
[102] ASC, [68]
[103] Defence, [68]
[104] ASC, [69]
[105] Defence, [69]
[106] ASC, [70]
[107] Defence, [70]
[108] ASC, [71]
[109] Defence, [71]
The ASC alleges the respondents continued to use the word “Malishus” after 18 July 2014 as follows:
ASC
Defence
39
Since around 7 October 2014 the Facebook page of Mr Jurcic and Mr Selwyn have been displaying clothing posts of composite Malishus marks in Australia.[110]
The respondents deny this.[111]
40
On about 22 March 2015 Mr Nicholas posted a message on one of his friend’s Facebook pages in New Zealand responding to a woman’s question as to whether she could obtain Malishus brand clothing in Australia.[112]
The respondents do not plead to this.[113]
41
In around May 2015 the Malishus clothing Facebook page of Mr Jurcic and Mr Selwyn contained the statement “Free Shipping Any Where [sic]”.[114]
The respondents admit this, but deny there is any legal requirement for the respondents to clearly state “Except for Australia” on their Facebook page.[115]
42
In around October 2015 the Malishus clothing Facebook page of Mr Jurcic and Mr Selwyn contained the statement “Free Shipping” but did not state “except for Australia”.[116]
The respondents admit this, but deny there is any legal requirement for the respondents to clearly state “Except for Australia” on their Facebook page.[117]
43
In around November 2015 the Facebook page of Mr Jurcic and Mr Selwyn contained the statement “Free shipping ends tomorrow” but did not state “except for Australia”.[118]
The respondents admit this, but deny there is any legal requirement for the respondents to clearly state “Except for Australia” on their Facebook page.[119]
44
On around 9 July 2016 Mr Jurcic and Mr Selwyn applied in the United States for TM serial 87098570 for class 35. The application states it is for retail store services and online retail store services; “clothing headwear footwear; and the first use commenced around 1 July 2007; and the “owner’s addresses” are given as a particular street in Docklands, Australia.[120]
The respondents admit this.[121]
[110] ASC, [75]
[111] Defence, [75]
[112] ASC, [78]
[113] Defence, [78]
[114] ASC, [79]
[115] Defence, [79]
[116] ASC, [80]
[117] Defence, [80]
[118] ASC, [81]
[119] Defence, [81]
[120] ASC, [82]
It is apparent that Mr Jurcic and Mr Selwyn in their defence admit much of what Mr Lamont alleges in the ASC, largely because many of the allegations made in the ASC are based on documents, many of which Mr Lamont has accessed through social media. Thus, as I have stated at the beginning of these reasons, the principal questions are whether any of the respondents used the word “Malishus” as a trade mark in relation to the classes of goods or services for which the Malishus Trade Marks are registered, and, if so, whether that use occurred in Australia.
Evidence
I have described in my earlier reasons much of the evidence on which Mr Lamont relies, and, as I have already noted, my description of the evidence should be read as incorporated in these reasons.[122] In addition to that evidence Mr Lamont relies on an affidavit he filed after the respondents filed their defence.[123] Much of this affidavit contains submissions, although the affidavit annexes documents that are not annexed to Mr Lamont’s previous affidavits. There are a number of documents to which it is necessary to refer.
[122] Lamont v Malishus & Ors [2018] FCCA 423, at [57]-[122]
[123] In particular, his affidavit made on 9.062018
One is a statutory declaration Mr Selwyn made on 4 March 2015 for the purposes of the non-use proceedings,[124] the text of which Mr Lamont reproduced in his affidavit of 6 October 2016, and which I reproduced in my earlier reasons.[125] Another document is a statutory declaration made by Mr Jurcic on 4 March 2015,[126] the text of which I also set out in my earlier reasons.[127] A third document is a statutory declaration Mr Jurcic made on 16 January 2015 for the purposes of the opposition proceedings.[128] Mr Jurcic there states (error in original and emphasis added):
[124] Affidavit of D Lamont 12.06.2018, Annexure “A-9”, page 54. As to the non-use proceedings, see my earlier reasons, at [99], [100], [104], [118], and [121]
[125] Earlier reasons, [99]
[126] Affidavit of D Lamont 12.06.2018, Annexure “A-10”, page 80
[127] Earlier reasons, [110]
[128] Affidavit of D Lamont 12.06.2018, Annexure “A-11”, page 82
Section 60 – Trademark gas acquired a reputation in Australia
Despite being deemed a New Zealand based brand, Malishus as an international apparel brand has acquired a reputation in Australia amongst the MMA and fight sports communities. In addition, our international brand Malishus has gained a reputation amongst some of Australia’s sporting elite including well known rugby players.
We also have legions of expatriate New Zealand followers who recognize the brand Malishus who are resident in Australia but know the brand from its roots in New Zealand.
. . . .
We are convinced that Mr Lamont’s application for the ‘Malishus’ mark was a calculated move to prevent Clinton and I registering the mark as its true owners. We also strongly feel it was an opportunistic move by Mr Lamont to claim a mark he does not own and attempt to leverage off our established reputation to launch the same brand in Australia without any financial investment, hard work or marketing efforts by Mr Lamont himself.
Mr Lamont was well informed by evidence provided in the non-use removal proceedings that our brand had considerable traction, an established reputation in Australia and abroad and he was fully aware we owned the rights to the same mark in class 9, the trademark ‘Malicious’ in class 25 as well as our international marks in the United States, New Zealand and United Kingdom.
A fourth document is an affidavit Mr Jurcic made on 18 December 2012, part of the text of which Mr Lamont reproduced in paragraph 22 of his affidavit of 6 October 2016.[129] And a fifth document titled “Statement of Grounds and Particulars” filed on behalf of Mr Jurcic and Mr Selwyn in opposing Mr Lamont’s application to register the words “Malishus” and “Malishus Koncept”.[130] The document contains the following statement (errors in original and emphasis added):
Mr Jurcic and Mr Selwyn are the owners of the ‘Malishus’ trademark in class 25 in New Zealand, The United States, Canada and The United Kingdom. Since 2009, the brand has slowly grown in awareness in our international territories and today it’s operating as a bonafide commercial operation. The ‘Malishus’ trademark inadvertently acquired a reputation in Australia as an apparel brand due to the explosion of social media and strong interest from the MMA and fight sports communities.
[129] Affidavit of D Lamont 12.06.2018, Annexure “A-14”, page 119
[130] Affidavit of D Lamont 12.06.2018, Annexure “A-13”, page 102
Mr Jurcic’s evidence
Mr Jurcic has made an affidavit which may be summarised as follows:[131]
a)Mr Jurcic met Mr Selwyn in 2006. After a couple of months Mr Jurcic and Mr Selwyn discovered they both had a desire to start a fashion brand. Mr Selwyn “shared his ‘Malishus’ brand idea” with Mr Jurcic.[132]
b)In 2007 Mr Jurcic and Mr Selwyn started the process of registering international trade marks. In the course of carrying out due diligence, Mr Jurcic became aware Mr Lamont had “Malishus Koncept” listed on the IP Australia registry. Mr Jurcic and Mr Selwyn did not know whether this would prevent them from registering “Malishus” in Australia. Not knowing where they stood in Australia, Mr Jurcic and Mr Selwyn decided it was much better to focus on North America and New Zealand, being Mr Selwyn’s home country. Their intention “was to try [to] address the biggest market in the world first being North America and reserve Australia for other classes of goods such as sunglasses”.[133]
c)In 2011 Mr Jurcic conducted further research into the “Malishus Koncept” trade mark, and “what I found [is] that [Mr Lamont] had not used the trademark [sic] in the last 3 to 4 years”.[134]
d)On 21 June 2012 Mr Jurcic and Mr Selwyn applied to have the “Malishus Koncept” trade mark removed for non-use, but IP Australia decided against the application.[135] From that date Mr Jurcic and Mr Selwyn “were very careful with our Malishus activities”. They produced marketing content in Australia, but “[o]ur target market was always North America and New Zealand”; Mr Jurcic and Mr Selwyn “strongly deny any alleged claims that Malishus was specifically targeting Australian consumers”.[136]
e)Mr Jurcic and Mr Selwyn experimented with designs and samples for some time after which they pooled some money and developed their first T-shirt line. They believed it would be a massive success in the United States, but they failed to sell a single garment online and “were mocked for our lack of creativity by streetwear aficionados”. The range was a failure. Mr Jurcic and Mr Selwyn were forced to give away most of the stock. Family and friends purchased some of the stock “by way of sympathy”, a “great deal was sent to New Zealand”, and some items were “gifted to close friends who were athletes or musical artists”.[137]
f)Between 2010 and the middle of 2013 Mr Jurcic and Mr Selwyn were operating Malishus more as a side hobby. They “tried to project” themselves “as a successful brand to potential investors, but the reality was, we were just two struggling guys, with a 9-5 job who were barely scraping by and desperately needed a break”.[138]
g)In May 2013 Mr Jurcic and Mr Selwyn decided to commercialise the operation in New Zealand. They established Malishus Limited. Their intention was to contain the operation solely to New Zealand, and to expand to the United States. Mr Jurcic and Mr Selwyn invested in a second line “which also failed to live up to expectation”.[139]
[131] Affidavit of R Jurcic 31.07.2018
[132] Affidavit of R Jurcic 31.07.2018, [5]
[133] Affidavit of R Jurcic 31.07.2018, [6]
[134] Affidavit of R Jurcic 31.07.2018, [7]
[135] Affidavit of R Jurcic 31.07.2018, [8]
[136] Affidavit of R Jurcic 31.07.2018, [9]
[137] Affidavit of R Jurcic 31.07.2018, [10]
[138] Affidavit of R Jurcic 31.07.2018, [11]
[139] Affidavit of R Jurcic 31.07.2018, [12]
Mr Jurcic then addressed the setting up and operation of two businesses. The first is “Malishus (ABN 12404973516)”. Mr Jurcic says it was registered as a partnership on 21 August 2010.[140] The business was used “to facilitate trade accounts for local suppliers when Chinese suppliers were deemed too expensive (due to large minimum order quantities)”. The business was also registered to “help provision a payment processing gateway for our ecommerce website, Mr Jurcic and Mr Selwyn were unable to secure a payment gateway with banks in the United States because they required, but did not have, a social security number. They tried to secure a payment gateway in Australia, but the banks rejected their application because of a lack of a business track record.[141] In 2014, however, Mr Jurcic and Mr Selwyn managed to establish an ANZ business account and payment gateway which was linked to the e-commerce website. Mr Jurcic has annexed those bank statements to his affidavit.[142]
[140] Affidavit of R Jurcic 31.07.2018, [13], [14]
[141] Affidavit of R Jurcic 31.07.2018, [13]
[142] Affidavit of R Jurcic 31.07.2018, [14]
The second business to which Mr Jurcic refers is that conducted by Malishus Limited. Mr Jurcic says this company was established to facilitate future wholesale orders from New Zealand retail partners. No such partnerships, however, have been made; and the company did not generate any revenue.[143]
[143] Affidavit of R Jurcic 31.07.2018, [15]-[17
Mr Jurcic then identifies the trade mark infringements he understands Mr Lamont alleges against the respondents, and addresses two of them. One is the use of Mr Jurcic says that domain name “never actively engaged in any targeted marketing toward the Australian market and never supplied Malishus branded apparel to an Australian consumer via this website”.[145] Mr Jurcic further says that the website was closed down “to open the way for and our focus on the New Zealand market”.[146] Mr Jurcic next addresses the domain name. Mr Jurcic describes this as “our primary website”, and says that “our sales history and customer demographic shows that there is no activity from Australia”. In support of that statement, Mr Jurcic annexes what he describes as a copy of “Malishus.co.nz customer and demographic information”.[147] Finally, Mr Jurcic addresses the domain name Mr Jurcic says this domain name “has never been used online”; that it “has been parked since we acquired it”; and it stands available to be used in connection with classes of goods for which Mr Jurcic and Mr Selwyn do hold a registered trade mark.[148]
[144] Affidavit of R Jurcic 31.07.2018, [18]
[145] Affidavit of R Jurcic 31.07.2018, [18]
[146] Affidavit of R Jurcic 31.07.2018, [18]
[147] Affidavit of R Jurcic 31.07.2018, [19], annexure “RJ6”
[148] Affidavit of R Jurcic 31.07.2018, [20]
Mr Lamont cross-examined Mr Jurcic. Mr Lamont showed to Mr Jurcic a trade mark application form dated 10 December 2011 for a graphic trade mark that included the word “Malishus”.[149] The application showed three owners - “Malishus”, Mr Jurcic, and Mr Selwyn. Mr Lamont put to Mr Jurcic that the application indicated that it was Mr Jurcic’s intention to set up a clothing line of business in Australia. Mr Jurcic gave the following evidence:[150]
So . . . the reason we set up Malishus as a business was when we first started this business . . . [w]e had no intention of setting up a fashion business in Australia. The only reason we registered a company here was we had to facilitate things to get manufactured in Australia. That’s the only reason. And in order to do that you have to have a trade account. So if we have to go and labels made for our garments that weren’t for Australia, they weren’t intended for Australia. The owners ran a dotcom, not a dotcom.au. We own that too, by the way, but we never use that, so we never use a top level domain in Australia. We only use the US one. So we use that company to allow us to print swing tags, to print this, to get stuff printed and you’ve called us out on this and it’s all in the evidence. But the reason we did that was because we couldn’t things made in China because the minimum order quantities were too big. If you want to go get a hoodie done it’s 1000 units minimum. That’s $10,000 for one style. So we set up this company not as an intention to trade Malishus as apparel in Australia because if we had have done that you would have went and got – you would have seen our goods in retailers. We would have been selling directly to the public. We would have been doing it properly if that was the case. And if we put that on as the company, as a registration, that was because we intended to try and get the trademark, but that didn’t – that is not to say that we were intending to sell in Australia. If we got it, great. That would have been fantastic. But we didn’t and that’s it. That’s – it’s as simple as that.
[149] Exhibit B
[150] T40.30
Mr Jurcic agreed that the effect of this part of his evidence was as follows:[151]
[151] T42.10
HIS HONOUR: All right. . . . I just want to keep track. So you’re saying to them, “Here’s the document. I put it to you that you’ve always intended to use Malishus in the clothing line business.” That’s what’s put to you.
MR LAMONT: Yes. My – my belief is their main intentions is to be Australian.
HIS HONOUR: All right. I’m just trying to say – okay. So that’s your main [contention].
Your response to that is, “We have used the name or a company, Malishus, because that was an entity that we had to establish in Australia to have labels printed for use out of Australia. Is that the essence?‑‑‑ [Mr Jurcic]: That’s correct, your Honour.
All right. That’s the essence?‑‑‑Yes.
All right. I’ve got that?‑‑‑Yes.
Mr Jurcic gave further evidence about why he and Mr Selwyn set up the business in the name of “Malishus”:[152]
[152] T42.5-30
THE WITNESS: Sorry, your Honour, can I add one more thing, just so – to give clarification around that?
HIS HONOUR: Yes, of course?‑‑‑Because I just remembered what else – why else we set up that business.
Yes?‑‑‑So . . . back when we started Malishus.com we wanted to get a merchant account with the ANZ and we couldn’t – back in those days, you couldn’t get a merchant account in the US. You needed a Social Security number. Clint couldn’t get one in New Zealand because he didn’t have a company yet. So what we did is we applied with St. George Bank, with ANZ Bank, but we got knocked back because back in those days they weren’t as giving when it came to online merchants. You’re talking about 10 years ago or eight years ago. So that’s the other reason we actually set up the company, so we could get that and apply for it, but it never happened. We never got a merchant account, never – it fell through. So we got rejected and we just left it as is. Then ‑ ‑ ‑
Can – yes, sorry?‑‑‑No, it’s okay, your Honour.
Well, if that’s the reason you use – but couldn’t you have used a company X Pty Limited or any name of the company?‑‑‑You know – look, your Honour, we did this all the wrong way. We did this all the wrong way. We set up a business – because we were – back in the day when Clint [that is, Mr Selwyn] and I were establishing this, we did this on a shoestring budget. We thought registering a business was the right way to do it. Setting up a company was about five or six hundred dollars. It was – we structured everything. We went around it the wrong way. We – the goals changed. We wanted to actually set up in the US. That was our whole plan from the beginning because the Australian market is a drop in the ocean. We were thinking big. Clint and I said, “Forget Australia. We will do our sunglasses and try this year and whatnot.” So that was the reason we set up LLCs in the US originally, so we could do that. And then we found we couldn’t even set up our accounts in the US after that, so ‑ ‑ ‑
All right?‑‑‑Yes.
Mr Jurcic accepted that he first became aware Mr Lamont had registered the First Malishus Trade Mark in 2007; he became aware of that by doing an online search; the trade mark was for clothing; he nevertheless filed for an application for clothing in Australia and used a business he registered in Australia for clothing and had an ABN also.[153] Mr Jurcic gave the following evidence about why, having knowledge of the first Malishus Trade Mark, he and Mr Selwyn nevertheless applied for the graphic trade mark (errors in original):[154]
. . . .Just to clarify this for Darren [that is, Mr Lamont] so he understands what the whole nature of that was. So Clint [that is, Mr Selwyn] bought the brand to me when we first met and we realised – this was early on when we first got together, we realised Mr Lamont already have a trademark. We understood that. Then – a couple of years later, I believe it was – we got told that because Clint had first use, you should try and register it anyway and we weren’t lawyers, so we tried it. This is why we registered it. We thought, “Well, if Clint has had it, it’s Malishus, not Malishus Concept.” We already acquired another trademark called Malicious spelt properly. We own that trademark. So ‑ ‑ ‑
[153] T47.5-T47.20
[154] T47.35-T48.10
Mr Jurcic, can I please stop you there?
HIS HONOUR: Well, just wait a minute. Just let him finish?‑‑‑So we – our intention was Clint felt – Client felt that, “Look, if we can register this, we will do something with it.” We knew that Darren had his trademark. There was no – no way, but Clint also felt that he was the original guy that come up with it, so there was a conflict there. So we tried it on, your Honour. When I mean “tried on”, we tried the application and we didn’t know much about the first use rule. We didn’t have lawyers and it got rejected on that basis. And this is why, three years later, we reapplied again, when we did get some proper legal advice, because they found that, based on the information we gave them, that Clint would be in a position to do it. So this is the only reason we applied for it. It was just to secure the trademark because we felt we had first use, but that doesn’t implicate us in saying that we went out and wanted to go sell clothing and, you know, build a brand in Australia per se, so.
Mr Jurcic accepted he did not do anything to restrict the appearance of “Malishus” on Facebook in Australia.[155] Mr Jurcic also accepted Mr Lamont had sent him a message asking him to remove access from within Australia to Facebook, but he said that he did not agree that there was any infringement of Mr Lamont’s trade mark because neither Mr Jurcic nor Mr Selwyn promoted or sold any clothing. Mr Jurcic said: “we’re trying to build an aura of a brand in New Zealand”.[156]
[155] T54.15
[156] T54.35
Mr Lamont took Mr Jurcic to copies of pages downloaded from the website of the “Malishus business”.[157] Mr Jurcic acknowledged that the pages were downloads from the “Malishus business” website as at 2010. Mr Jurcic did not accept that this document showed that the business was offering to sell T-shirts in Australia. He said “you’re failing to remember we were going to plan sell sunglasses”, which was “going to be part of the product mix”.[158] Mr Jurcic also said that when “we developed this site, we just developed that as a default”, but that “doesn’t mean we actually sold in Australia”.[159] When Mr Lamont put to Mr Jurcic that the website did not refer to sunglasses, Mr Jurcic said “[w]e have samples. It’s irrelevant”.[160] Mr Jurcic denied that words such as “Shipping and handling in Australia”, and “Malishus.com ships to all states via Australia Post” contained on the website showed that he and Mr Selwyn were targeting Australia.[161] This part of Mr Jurcic’s evidence ended as follows:[162]
[157] Affidavit of D Lamont, 30.04.2014, annexure 17, pages 207-220. I describe this document in my earlier reasons, at [108]
[158] T57.30
[159] T57.30
[160] T57.35
[161] T58.25
[162] T60.5-T60.2
HIS HONOUR: What’s being put to you, and just as a matter of fairness, is there’s a document there which, on its face, is inconsistent with your denial?‑‑‑Okay. Can I explain this in further detail, your Honour?
Well, yes?‑‑‑So when Clint and I decided to start this brand we knew we were going to have problems doing a fashion brand in Australia. It wasn’t going to happen. So we always wanted to focus on doing sunglasses. So when we were building this site, which we did as a rough site, we said it up with the idea that we will be shipping some sort of sunglass products to Australia. However, we also had products that we wanted to sell to the US. We had no intentions of selling garments to Australia. So we weren’t promoting to Australians to buy Australian gear. “We’re going to ship it to you.” There’s no evidence of that that I’m aware of.
But what is being put to you is that’s not consistent with that document because that document makes no reference to sunglasses. That’s what is being put to you?‑‑‑Well, it never happened, your Honour. We couldn’t afford to do it and this just never changed. That’s all it was. We – it was an oversight.
All right. And what’s being put to you is that document shows that your intention was to sell – perhaps overseas, but certainly within Australia – garments or clothing bearing the Malishus mark. That’s what’s said that document shows and your response to that is you disagree?‑‑‑I disagree.
All right.
Next, Mr Lamont took Mr Jurcic to paragraphs 5, 6, and 7 of the statutory declaration he made on 16 January 2015 (to which I have already referred). Shortly after answering questions about those paragraphs, Mr Jurcic gave the following evidence about the statutory declaration:[163]
So this statutory declaration was when Clint and I were trying to secure a trade mark in Australia. Now, when Mr Lamont – when we had non-use – when we tried to get his trade mark removed for non-use, we found that – and this is the way we perceived it back then, being a lot younger and a lot stupider, we found that Mr Lamont managed to beat us on this case on one flimsy piece of evidence, and this blown out information about his brand how he has done this. Whereas we couldn’t find any evidence. We didn’t take it to court. We left it. So when we wrote this, we wrote this in a way where we stated, “Look, we feel we have a reputation,” but when they knocked it back, basically they said, “You don’t have a reputation. This is the reason you’re not getting the trade mark,” blah, blah, blah. So that statement there doesn’t encapsulate a reputation. We just said we had a reputation, but lots of the reputation evidence we provided was lukewarm. We tried it on with IP Australia, but it was just our way of saying, well, if Mr Lamont can get a non-use removal on this little bit of information and all this, well, we may be able to get this based on the fact that we feel that we’re the true owners. So that’s essentially how that played out, this whole ‑ ‑
[163] T77.15
Mr Selwyn’s evidence
In his affidavit made on 31 July 2019 Mr Selwyn says he “came up with the concept Malishus” in about 2004. He produced “designs, samples on my computer”, and he got a friend to print a few T-shirts, which he gave to a friend in Australia. He “got a lot of positive feedback”. Mr Selwyn met Mr Jurcic in 2006. Mr Selwyn told Mr Jurcic “about Malishus”, and Mr Jurcic told Mr Selwyn about his experience with manufacturing and fashion designs, “so we decided to team up”. [164]
[164] Affidavit of C Selwyn, [4]-[5]
On January 2011 Mr Jurcic and Mr Selwyn “decided we needed a Facebook page”. Mr Jurcic then created a Facebook page “for Malishus”, and Mr Selwyn “managed the content and Facebook page”.[165] Mr Lamont made a post on the Facebook page Mr Jurcic and Mr Selwyn used stating he was the “real malishus”, and that he would “wait for you guys to become successful and sue your arses”.[166] In about 2012 Mr Selwyn returned to New Zealand to see his family. He met Mr Nicholas who said he had noticed Mr Jurcic’s and Mr Selwyn’s Facebook page, and he wanted to help Mr Jurcic and Mr Selwyn to promote Malishus in New Zealand. Mr Selwyn discussed this with Jurcic, and they agreed to give Mr Nicholas shares in Malishus Limited. Mr Nicholas was issued shares in Malishus Limited on 22 July 2013. In about 2016 Mr Nicholas said he could no longer assist Mr Jurcic and Mr Selwyn to promote “Malishus” in New Zealand.[167]
[165] Affidavit of C Selwyn, [6]
[166] Affidavit of C Selwyn, [7]. I do not accept Mr Lamont made any such post. It is inconsistent with the polite letter Mr Lamont sent on 18 May 2012 to which I refer in paragraph 114 below.
[167] Affidavit of C Selwyn, [8]
Mr Lamont cross-examined Mr Selwyn. He put to him pages from material posted on Mr Selwyn’s Facebook page which include the word “Malishus”.[168] The post relates to video games, and they include persons wearing clothing with Malishus, and Mr Lamont put to Mr Selwyn that this was done to promote the Malishus brand of clothing. Mr Selwyn did not accept this. He said he held a trade mark which included “Malishus” in the class of entertainment. Mr Selwyn confirmed that he posted an upload that appeared on “Sneaker Talk/Nine Talk” on 2 February 2012.[169] Mr Lamont also asked Mr Selwyn questions relating to Mr Selwyn’s claims that he was the creator of the word “Malishus”. Mr Lamont put to Mr Selwyn documents that indicated that he and Mr Jurcic had ordered apparel in Australia, matters Mr Selwyn included in an affidavit and in a statutory declaration he made in the non-use proceedings and opposition proceedings respectively, and material posted on the Facebook page of a person named “Leagus” showing certain persons wearing a T-shirt that includes the words “Malishus”.[170]
[168] Exhibit C
[169] Affidavit of D Lamont, 30.04.2014, annexure 65, page 341. I refer to this upload in my earlier reasons, at [97]
[170] Exhibit D
Service on Mr Nicholas
On 2 May 2018 I delivered a judgment in relation to an application Mr Lamont made for leave to file the application and statement of claim on Mr Nicholas in New Zealand.[171] I there concluded that this Court’s leave was not required to permit Mr Lamont to serve the application on Mr Nicholas in New Zealand. On 26 June 2018 I made an order dispensing with the requirement of personal service of the amended application and amended statement of claim on Mr Nicholas and instead made an order permitting service of the application and amended application by sending a message to Mr Nicholas’s Facebook page attaching those documents together with a form in terms of Form 1 to Schedule 1 to the Trans-Tasman Proceedings Regulation 2012 (Cth) and a sealed copy of the orders I made.
[171] Lamont v Malishus & Ors (No.3) [2018] FCCA 1294
At the hearing on 10 December 2018 I read an affidavit made by Mr Lamont on 28 June 2018 which deposes to the service of the amended application, amended statement of claim, and the other documents I ordered be served on Mr Nicholas in the manner required by the orders I made on 26 June 2018. I am satisfied, on the basis of this evidence, that Mr Nicholas has been served with the amended application and amended statement of claim.
Use by respondents of “Malishus” as a trade mark?
In this part of my reasons I consider whether one or more of respondents and Mr Nicholas engaged in any one or more of the Alleged Infringing Acts and, if so, whether the acts constituted the use “as a trade mark a sign that is substantially identical with, or deceptively similar to” any one or more of the Malishus Trade Marks “in relation to goods or services in respect of which” those trade marks are registered.[172]
[172] TM Act, s.120(1)
I propose to approach this task as follows. First, I will identify the more relevant principles I must apply to determine the question of use. Second, I will consider whether on the pleadings or, where there is an issue on the pleading, on the evidence, any one or more of the respondents engaged in any one or more of the Alleged Infringing Acts. Third, assuming any one or more of the respondents engaged in any of the Alleged Infringing Acts, I will consider each of the acts in which I might find any of the respondents engaged in constitutes the use by them “as a trade mark a sign that is substantially identical with, or deceptively similar to” any one or more of the Malishus Trade Marks “in relation to goods or services in respect of which” those trade marks are registered.
Principles
I set out in my earlier reasons some of the relevant statutory provisions and legal principles.[173] I do not propose to repeat what I there said. It would be useful, however, to set out the essential elements of an infringement of a trade mark, as provided for by s.120(1) of the TM Act, and to identify additional principles relevant to determining the circumstances in which the registration and use of domain names, and the posting of material on social media, may constitute the use of a sign as a trade mark.
[173] Earlier reasons, [25] – [39]
The elements of infringement of a registered trade mark, as provided for by s.120(1) of the TM Act, are as follows:
a)a person must use a “sign”;
b)the person must use the sign “as a trade mark”;
c)the person must use the sign as a trade mark “in relation” to goods or services;
d)the goods and services are goods and services “in respect of which” the registered trade mark is registered; and
e)the sign the person uses as a trade mark is “substantially identical with, or deceptively similar to” the registered trade mark.
There is no need to say anything further about “sign”. It is necessary, however, to say something about the use of the sign “as a trade mark”. That directs attention to the nature of a “trade mark”, which is defined in s.17 of the TM Act:
A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.
It has been said that to use a sign as a trade mark is to use it “as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods”; and that to use a sign as a trade mark is to use it to “distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else”.[174] Further, as suggested by this passage, and by s.17 of the TM Act itself, the sign must be used “in the course of trade”. That expression was considered in WD & HO Wills (Australia) Ltd v Rothmans Ltd:[175]
The word “trade” is . . . a very wide word, but the use of a trade mark for the purposes of trade would have to be at least a use of the mark to indicate the origin of goods. . . . [T]he use of the mark would have to be a use for the purposes of trade in the goods. . . . “After goods have reached the consumer they are no longer in the course of trade. The trading in them has reached its objective and its conclusion in their acquisition by the consumer”.
[174] Coca-Cola Co v All-Fect Distributors Ltd (1999) 47 IPR 481 at page 489-490 (Black CJ, Sundberg and Finkelstein JJ)
[175] (1956) 94 CLR 182 at page 191
Using a sign in the course of trade, however, does not require that there be an actual sale. “In the course of trade” means “for the purposes of trade”.[176] That principle is particularly relevant to advertising, for it is the case that a sign may be used as a trade mark in the course of advertising. This point was made by Kitto J in The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited:[177]
A use of a mark in an advertisement of goods is a use in the course of trade, and is or course a use in relation to the goods advertised . . . But . . . the use . . . is limited to a use of a mark as a trade mark.
[176] Christian v Société des Produits Nestlé SA (No 2) [2015] FCAFC 153 at [11], referring to WD & HO Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182 at page 191
[177] (1963) 109 CLR 407, at page 422
Kitto J considered that whether or not a mark referred to in an advertisement was used “as trade mark” depends on whether it would have appeared to the person observing the advertisement that the marks in question possessed “the character of devices, or brands, which” the alleged infringing party “was using or proposing to use in relation to” particular goods “for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the” goods in question and the alleged infringing party.[178]
[178] The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407, at page 425 (Kitto J)
A domain name is capable of being used as a trade mark. How and why that might be so has been usefully explained as follows (footnotes omitted and errors in original):[179]
Every computer or user connected to the Internet must be distinguished and located by other users. Thus, every user is assigned an Interworking Protocol Address (IP Address), a unique combination of numbers separated by periods to represent different fields, such s 123.101.23.128
These strings of digits contain a network portion that locates the specific network to which the user is connected, as well as a local address that identifies the user within the network. IP addresses are, unfortunately, unwieldly and difficult to remember. As a result, the IP Address system has been overlaid with a more user-friendly system of domain names, in which IP Address holders are given an easily remembered mnemonic designation. Computer programs that connect users to the Internet have been programmed automatically to look up the numeric IP Address that corresponds to the designated mnemonic domain name address.
Domain names are made up of a number of characters separated by periods to designate fields. Often, domain names consist of a word that will easily identify the holder of that address, such as an individual’s or organization’s name, a brand name or trademark, or a nickname, followed by a three letter abbreviation that designates the user’s type of organization. . . .
For a company doing business on the Internet, a domain name is an extremely valuable tool for reaching and maintaining communication with customers. Because there is no effective alternative method of finding a company’s Internet location, having a domain name that corresponds to a well-known trademark nay be a prerequisite for a company that wants to establish an Internet presence. Indeed, “for businesses to communicate effectively on the Internet, it is essential that they have a unique ‘address’ that is easily recognizable to customers.”
[179] G Weiswasser “Domain Names, the Internet, and Trademarks: Infringement in Cyberspace”, 20 Santa Clara High Tech L.J. 215 (2003) 137, at pages 145-147 See also the description in the judgment of Reeves J in Mantra group Pty Ltd v Tailly Pty Ltd (No 2) [2010] FCA 291, at [18]-[30]
The registration of a domain name does not by itself constitute a use of the name registered as a trade mark. What must be shown is that the domain name is used “as a sign to distinguish the goods or services of one trader in the course of trade from the goods or services of another trader”; and this will be shown if the public is “likely to understand a domain name . . . as a sign for the online services identified by the [sign] as available at the webpage to which it carries the internet user”.[180]
[180] Sports Warehouse, Inc v Fry Consulting Pty Ltd [2010] FCA 664, at [153] (Kenny J)
The Alleged Infringing Acts
I have set out in the tables in paragraphs 22 and 23 of these reasons the Alleged Infringing Acts. It would be convenient to refer to particular Alleged Infringing Acts by reference to the numbers I have assigned to them in those tables, prefaced by the letters “AIA”, and also to classify the Alleged Infringing Acts into the following three classes:
a)registration and use of domain names (AIA2, AIA3, AIA5, AIA14, and AIA35);
b)the sale or the offering for sale of clothing attaching marks that included the name “Malishus” (AIA1, AIA10, AIA15, AIA16-AIA21, AIA23, and AIA28); and
c)posting material on Facebook (AIA13, AIA25-AIA27, AIA29, AIA32, AIA33, AIA39, and AIA40-AIA42).
I will consider each class of Alleged Infringing Acts.
Registration and use of domain name
Mr Jurcic admits he has been the registered owner of the domain name __j_unwrap_id="3">[181] and that he became the registered owner of the domain name Mr Jurcic also admits that in the middle of 2013 he and Mr Selwyn registered the domain name The matters admitted by themselves do not establish that any of these domain names were used as trade marks.
[181] ASC, [30]; Defence, [30] (AIA2)
[182] ASC, [33]; Defence, [33] (AIA5)
[183] ASC, [68]; Defence, [68] (AIA35)
There is evidence, however, about the purpose for which the domain name was registered. First, there is the evidence that it was registered on 6 August 2007 by use of a form in which the “Registrant Contact” was identified as “Malishus Brands Robert Jurcic”.[184] Second, there are the pages downloaded from the website of the “Malishus business” to which the domain name resolved, and to which I have already referred, and which were put to Mr Jurcic in cross-examination.[185] The first page begins with a question: “So you wanna stock Malishus apparel?” and provides a contact: mailto:[email protected]. A few pages later there is depicted a male wearing T-shirts, some of which have the word “Malishus” on them. Over the next few pages, there is further text including the following:[186]
[184] Affidavit of D Lamont, 30.04.2014, annexure 9, page 186
[185] Affidavit of D Lamont, 30.04.2014, annexure 17, pages 207-220. I describe this document in my earlier reasons, at [108]
[186] Affidavit of D Lamont, 30.04.2014, annexure 17, page 215
AUSTRALIA
Orders are processed Monday-Friday 8 a.m. to 3 p.m. (excluding major holidays) and typically ship within 24-72 hours when the order was placed, pending payment authorization [sic] and verification. Malishus.com ships to all states via Australia Post.
. . . .
All orders shipped throughout Australia are assessed a 10% GST. These fees are included in each order and paid for by Malishus.com during the shipping process.
. . . .
Malishus.com accepts all major credit cards including Visa, Mastercard [sic] and American Express. In addition we also accept payment via Paypal. . . .
Third, there is the evidence of Mr Jurcic to which I also have already referred and, in particular, his description of the website as “our ecommerce website,
[187] Affidavit of R Jurcic 31.07.2018, [13]
It is also relevant to identify the evidence about who sought the registration of the domain name That evidence includes the following:
a)On 18 August 2010 Mr Jurcic and Mr Selwyn registered with the Australian Securities and Investments Commission the business name “MALISHUS”.[188]
b)In his statutory declaration made in 4 March 2015 Mr Jurcic stated that by “engaging in a partnership together, Clinton Selwyn authorized [sic] the use of the Malishus word mark to myself around April, 2007”.[189]
c)Mr Jurcic’s evidence that “Malishus (ABN 12404973516)” was registered as a partnership on 21 August 2010.[190]
[188] Affidavit of D Lamont, 30.04.2014, annexures 9 and 38, pages 188 and 282
[189] Affidavit of D Lamont 12.06.2018, Annexure “A-10”, page 80, [3]
[190] Affidavit of R Jurcic 31.07.2018, [13], [14]
On the basis of this evidence, I am satisfied that Mr Jurcic and Mr Selwyn arranged for the registration of the domain name for the purposes of a partnership they had formed to promote a business to develop around the use of the word “Malishus” (J S Malishus Partnership); and they did so, not only for the purpose of designating the address of the website to which the domain name resolved, but also for the purpose of using it as a sign to distinguish the apparel the website “malishus.com” indicated it was in a position to sell from the apparel other traders were or may have been in a position to sell. I am also satisfied that the public who visited or would visit the website to which the resolved would have understood to be a sign for the sale of the apparel identified by the words and marks that included the word “Malishus” as available to be sold at the website to which the domain name resolved.
I next turn to the use of the domain name. In his evidence, which I have already set out, Mr Jurcic said that he and Mr Selwyn tried to secure a payment gateway in Australia, but the banks rejected their application because of a lack of a business track record.[191] That implies that, although Mr Jurcic and Mr Selwyn intended the website to operate as their “ecommerce website”, no sales were effected through that website. If that is what Mr Jurcic intended to convey, I do not accept it.
a)First, the pages from the website that are in evidence are a reasonable basis for inferring, and I do infer, that the website was accessible to the public. The pages represent without any qualification that the clothing displayed on the website was available to be purchased, and that persons wishing to purchase such clothing could do so by payment using a credit card or PayPal account because “Malishus.com accepts all major credit cards” and also accepted “payment via Paypal [sic]”. It is inconceivable that Mr Jurcic and Mr Selwyn would have permitted the operation of a website which represented that the clothing identified in the website was available to be purchased by the use of credit cards and PayPal without Mr Jurcic and Mr Selwyn being satisfied there were arrangements in place where purchasers could in fact use either a credit card or PayPal account to pay the purchase price for any of the clothing they decided to purchase through the website.
b)Second, there are the statements Mr Jurcic made in his affidavit of 18 December 2012 that the “MALISHUS brand of apparel has been actively marketed through online and social media channels since 12 March 2011”, and that “[w]e have an active ecommerce website at which displays our products and shows that our products are being used in a commercial capacity”.[192] It is true that in evidence at the hearing (which I have reproduced at paragraph 38 of these reasons) Mr Jurcic seemed to suggest that the evidence he gave in one of his statutory declarations was in some sense exaggerated, and that in fact he and Mr Selwyn had “flimsy” evidence of reputation. Whether or not in retrospect Mr Jurcic now believes he might have overstated his and Mr Selwyn’s case of the reputation he and Mr Selwyn created in relation to the brand “Malishus”, there was a basis for his claiming that clothing to which he and Mr Selwyn applied marks that included the name “Malishus” had been actively marketed, and that he and Mr Selwyn had an active ecommerce website that showed his and Mr Selwyn’s products were being used in a commercial capacity.
c)Third, Mr Jurcic accepts, and there is documentary evidence to support his acceptance,[193] that Mr Jurcic and Mr Selwyn acquired T-shirts and other clothing for the purpose of sale. It is true that Mr Jurcic has given evidence that none of these T-shirts or other apparel was sold in Australia except to friends and family. For reasons I set out below, however, I do not accept that evidence.
[191] Affidavit of R Jurcic 31.07.2018, [13]
[192] Affidavit of D Lamont, 06.10.2016, [22] (emphasis in original)
[193] The evidence is described in the earlier reasons at, [86], [87], [90], [91], [92], [93], [96], [98]
Thus, I am also satisfied that Mr Jurcic and Mr Selwyn permitted to be used in the course of the J S Malishus Partnership for the purpose of permitting members of the public to purchase through the website apparel that bore words and other marks that included the word “Malishus”; and that they used the domain name not only for the purpose of designating the address of the website to which the domain name resolved, but also for the purpose of using it as a sign to distinguish the clothing the website indicated “malishus.com” was in a position to sell from the clothing other traders were or may have been in a position to sell.
Also relevant, although not as evidence of the infringing activity by means of posting material on Facebook, is a post made on 11 April 2016 on the Facebook page of a person named “Leagus”.[228] It begins with “LEAGUS shared a post”. The post shares a video uploaded to Facebook by “Vela Manusaute” on 9 April 2016. The video’s caption states: “We are MALISHUS. Check out what MALISHUS is all about in this video, starring, Clinton Selwyn . . . .” Above this writing there is a still from a video that depicts three males, each wearing a top that has the word “Malishus”. Above that still the following material appears (which, in turn appears before “LEAGUS shared a post”):
YEAY BOY! My day one sponsorship was Malishus! Here it is everyone. Check them out. You can order offline or rock up to where I’ll be and I’ll be giving some gears away.
[228] Exhibit D
Although not posted by either Mr Jurcic or Mr Selwyn, the post suggests they had some arrangements with “Leagus” for the promotion of clothing bearing the word “Malishus”.
I have also considered the posts made on the Facebook page Mr Nicholas maintained, and I am satisfied that the posts I identify in the footnote to this sentence constitute the use of “Malishus” as a trade mark in relation to clothing apparel.[229] The first of these posts was made on 3 January 2013, and the last on 21 January 2014.
[229] Affidavit of D Lamont, 30.04.2014, annexures 127 (3 January 2013), 145, 168, 182, 207, 210, 223, 225, 232, 250, 259, 291, 308, 417, 418, 421, 423, 424 (21 January 2014).
Use by respondents of “Malishus” as a trade mark in Australia?
Although s.120(1) of the TM Act does not expressly require the use of a trade mark in Australia, s.4 of the TM Act provides that the TM Act extends to Christmas Island; and Cocos (Keeling) Islands; and Norfolk Island; and the Australian continental shelf; and the waters above the Australian continental shelf; and the airspace above Australia; and the Australian continental shelf. That means that the use of a sign as a trade mark can constitute an infringement of a trade mark registered under the TM Act only if the use occurs within the territory identified by s.4 of the TM Act.
I have already concluded I am satisfied that at least during the period from around July 2011 to around August 2013 Mr Jurcic and Mr Selwyn, in the course of the J S Malishus Partnership, have sold in Australia apparel in relation to which they used as trade marks the trade marks of which they registered (these being the “J S Trade Marks”); and that they continued to offer for sale such apparel. Thus Mr Jurcic and Mr Selwyn have infringed the first Malishus Trade Mark and, after 30 October 2012, the first and second of the Malishus Trade Marks.
I next turn to the domain name which I have found Mr Jurcic and Mr Selwyn used as a trade mark. In my earlier reasons I referred to the judgment of Merkel J in Ward Group Pty Ltd v Brodie & Stone Plc,[230] and in particular to the following passage from his Honour’s judgment: After referring to some authorities Merkel J concluded as follows:[231]
In summary, the use of a trade mark on the Internet, uploaded on a website outside of Australia, without more, is not a use by the website proprietor of the mark in each jurisdiction where the mark is downloaded. However, as explained above, if there is evidence that the use was specifically intended to be made in, or directed or targeted at, a particular jurisdiction then there is likely to be a use in that jurisdiction when the mark is downloaded. Of course, once the website intends to make and makes a specific use of the mark in relation to a particular person or persons in a jurisdiction there will be little difficulty in concluding that the website proprietor used the mark in that jurisdiction when the mark is downloaded.
[230] [2005] FCA 471
[231] [2005] FCA 471 at [43]. See also the discussion and the cases identified in J Riordan The Liability of Internet Intermediaries, Oxford University Press, 2016, at [7.07]-[7.41]
Thus, whether Mr Jurcic or Mr Selwyn used the domain name in Australia depends on whether they intended or directed or targeted the domain name to persons in Australia. That question is to be answered in the affirmative. The website to which the domain name resolved represented without qualification that the clothing displayed on the website was available to be purchased in Australia, and that persons wishing to purchase such apparel could do so by credit card or PayPal account; and in his affidavit of 18 December 2012 Mr Jurcic stated that “MALISHUS brand of apparel has been actively marketed through online and social media channels since 12 March 2011”, and that “[w]e have an active ecommerce website at which displays our products and shows that our products are being used in a commercial capacity”.[232]
[232] Affidavit of D Lamont 12.06.2018, Annexure “A-14”, page 121, [17]
Next I consider whether the Alleged Infringing Acts constituted by Mr Jurcic and Mr Selwyn posting material on Facebook was directed to persons that included persons in Australia. I find that these posts were so directed. I principally rely on what Mr Jurcic said in his affidavit of 18 December 2012 Mr Jurcic stated that “MALISHUS brand of apparel has been actively marketed through online and social media channels since 12 March 2011”,[233] and that the “MALISHUS brand has an active social media presence which can be highlighted from the MALISHUS Facebook page”.[234]
[233] Affidavit of D Lamont 12.06.2018, Annexure “A-14”, page 121, [17]
[234] Affidavit of D Lamont 12.06.2018, Annexure “A-14”, page 121, [18]
I am satisfied Mr Jurcic and Mr Selwyn intended to direct the domain name to persons in New Zealand, and not to persons in Australia. I rely on five matters: the domain name includes the letters “nz”; the evidence of Mr Selwyn, which I accept, that sometime in 2012 he and Mr Jurcic had agreed with Mr Nicholas that Mr Nicholas would promote “Malishus” in New Zealand; Mr Jurcic and Mr Selwyn incorporating in New Zealand Malishus Limited; Mr Nicholas posting material on Facebook that include the word “Malishus”; and Mr Nicholas being a resident of New Zealand.
Finally, there is what I have found to be the use as a trade mark of the word “Malishus” in posts that were made to the Facebook page maintained by Mr Nicholas. I find that these posts were directed to persons in New Zealand; and I rely on the matters on which I rely for finding that Mr Selwyn intended to direct the domain name to persons in New Zealand, and not to persons in Australia.
Conclusion on trade mark infringement
On the basis of the findings I have made, I am satisfied Mr Jurcic and Mr Selwyn, in the course of carrying on a partnership between them (the “J S Malishus Partnership” I have already defined) infringed one or more of the Malishus Trade Marks by engaging in the following conduct (Infringing Conduct):
a)From around July 2011 to around August 2013 Mr Jurcic and Mr Selwyn infringed in Australia the first Malishus Trade Mark, and from 30 October 2012 until around August 2013, Mr Jurcic and Mr Selwyn infringed in Australia the second Malishus Trade Mark, by using the word “Malishus” as part of the domain name that resolved to a website that displayed and offered for sale apparel that contained marks and words which included the word “Malishus”.
b)From around July 2011 Mr Jurcic and Mr Selwyn infringed in Australia the first Malishus Trade Mark, and from 30 October 2012 the second Malishus Trade Mark, and, from 17 August 2014 the fourth Malishus Trade Mark, by selling or offering to sell in Australia clothing and headgear that contained marks and words which included the word “Malishus”.
c)From around:
i)July 2011 until around November 2015 Mr Jurcic and Mr Selwyn infringed in Australia the first Malishus Trade Mark;
ii)30 October 2012 until around November 2015, Mr Jurcic and Mr Selwyn infringed in Australia the second Malishus Trade Mark; and
iii)17 August 2014 until around November 2015, Mr Jurcic and Mr Selwyn infringed in Australia the fourth Malishus Trade Mark;
by posting material on Facebook that included the use of the word “Malishus” in connection with clothing apparel.
d)Given I have found that Mr Nicholas’ posting of material on his Facebook page was directed to persons in New Zealand, but not to persons in Australia, I am not satisfied that Mr Nicholas has infringed any of the Malishus Trade Marks.
e)Although Mr Jurcic and Mr Selwyn formed Malishus Limited, and they are directors and shareholders of that company, I am not satisfied that they engaged in the Infringing Conduct I found they engaged in for or on behalf of Malishus Limited. That is so because I accept Mr Jurcic’s evidence that he and Mr Selwyn established Malishus Limited to carry on business in New Zealand. I am therefore not satisfied that Malishus Limited infringed any of the Malishus Trade Marks.
Remedies
Section 126 of the TM Act provides for the remedies a Court may grant where it has found there has been an infringement of a trade mark. That section provides:
(1)The relief that a court may grant in an action for an infringement of a registered trade mark includes:
(a)an injunction, which may be granted subject to any condition that the court thinks fit; and
(b)at the option of the plaintiff but subject to section 127, damages or an account of profits.
(2)A court may include an additional amount in an assessment of damages for an infringement of a registered trade mark, if the court considers it appropriate to do so having regard to:
(a)the flagrancy of the infringement; and
(b)the need to deter similar infringements of registered trade marks; and
(c)the conduct of the party that infringed the registered trade mark that occurred:
(i)after the act constituting the infringement; or
(ii)after that party was informed that it had allegedly infringed the registered trade mark; and
(d)any benefit shown to have accrued to that party because of the infringement; and
(e)all other relevant matters.
Also relevant is s.51 of the Business Names Registration Act 2011 (Cth) (BNR Act) which provides:
(1)To avoid doubt, the relief that a court may grant in an action for an infringement of a registered trade mark includes an order that the registration of a business name to an entity must be cancelled.
(2) ASIC must cancel the registration of the business name to the entity if:
(a) a copy of the court’s order is lodged with ASIC; and
(b) ASIC is satisfied, within a reasonable period after the order is lodged, that:
(i)no application for the stay of the order is pending; and
(ii)no appeal of the order is pending; and
(iii)the order is not stayed; and
(iv)the order has not been overturned on appeal.
(3) Nothing in this section limits any orders that a court may make (in an action for an infringement of trade mark or otherwise) in relation to the registration of a business name or ASIC’s obligations under such orders.
Injunction
Mr Lamont seeks an injunction on the following terms (emphasis in original):[235]
The applicant wishes to request an order for an (injunction) to be placed on all respondents and for them to “Cease & Desist” in all “use, trade, operations and conduct” in relation to the word “Malishus” within AUSTRALIA and (the world) due to the applicants “first-use” in Australia and “the World On-line [sic]” over the “World Wide Web” prior to any of the respondents . . .
[235] ASC, [102]
I do not need to consider whether before a Court may grant a permanent injunction it must be satisfied there is a risk of future infringements,[236] because I am satisfied there is a risk Mr Jurcic and Mr Selwyn may infringe one or more of the Malishus Trade Marks. I rely on the admissions made in the respondents’ defence that in around May 2015 the Facebook page of Mr Jurcic and Mr Selwyn contained the statement “Free Shipping Any Where”;[237] on the admission made in the defence that in around October 2015 the Facebook page of Mr Jurcic and Mr Selwyn contained the statement “Free Shipping” but did not state “except for Australia”;[238] and on the admission made in the defence that in around November 2015 the Facebook page of Mr Jurcic and Mr Selwyn contained the statement “Free Shipping ends tomorrow”; and on the post made by “Leagus” on 9 April 2016, [239] which states “you can offer offline or rock up to here” which, as I have already noted, suggests that Mr Jurcic and Mr Selwyn had some arrangement with “Leagus” for the promotion of clothing that included the word “Malishus”.
[236] See, for example, Solahart Industries Pty Ltd v Solar Shop Pty Ltd (No 2) [2011] FCA 780, at [8] (Perram J)
[237] ASC, [79]; Defence, [79]
[238] ASC, [80], Defence, [80]
[239] ASC, [81]; Defence [81]
The injunction Mr Lamont seeks, however, is too broad. First, the Malishus Trade Marks are registered for only certain classes of goods; and Mr Jurcic and Mr Selwyn hold registered trade marks that include the word “Malishus” for other classes of goods. The injunction, therefore, should be restricted to restraining use in connection with classes of goods or services for which the Malishus Trade Marks are registered. Second, I have concluded that Mr Lamont has not established that Malishus Limited or Mr Nicholas have infringed any of the Malishus Trade Marks.
I propose, therefore, to grant an injunction to restrain each of Mr Jurcic and Mr Selwyn from using in Australia the word “Malishus” or any other sign which is substantially identical with or deceptively similar to the word “Malishus” as a trade mark in relation to T-shirts or any other clothing apparel or any footwear or headgear including without limitation in social media or in sales or by way of promotion and sponsorship.
Given I am satisfied there is a risk Mr Jurcic and Mr Sewyn will use “Malishus” as a trade mark, I am also satisfied that the continuation of the registration of the business names “Malishus” ABN 12 404 973 516, and the registration of the domain name and will act as a temptation to breach the injunction I propose to grant.[240] (Although I have accepted Mr Jurcic’s evidence that he and Mr Selwyn have closed down the website to which resolves, I do not understand Mr Jurcic to have said that he and Mr Selwyn have cancelled the registration of that domain name.) For these reasons, I propose to make an order under s.51 of the BNR Act that the business name be cancelled, and that Mr Jurcic and Mr Selwyn take such steps as are necessary to cancel the domain names and
[240] Christian v Société Des Produits Nestlé SA (No 2) [2015] FCAFC 15, at [143]
In concluding that I should make these orders I am conscious that Mr Jurcic and Mr Selwyn hold a trade mark that uses the word “Malishus” for classes of goods in respect of which the Malishus Trade Marks are registered. There is no evidence, however, that Mr Jurcic and Mr Selwyn have attempted to use the word “Malishus” in connection with such goods. In any event, an order requiring Mr Jurcic and Mr Selwyn to cancel the business names and domain names that use the word “Malishus” should not prevent them from registering a business or domain name that includes “Malishus” provided it is done in connection with the proposed lawful use of their registered trade mark.
Cancellation of respondents’ trade marks
The second order Mr Lamont seeks is (emphasis in original):[241]
All the respondents “Malishus” trademarks [sic] registered and/or filed in Australia and the World be cancelled and removed or surrendered to the applicant immediately . . .
[241] ASC, [102(a)]
The Court has power to cancel a trade mark that has been registered under the TM Act on a number of grounds, including on any of the grounds on which the registration of a trade mark could have been opposed under the TM Act.[242] Mr Lamont has not, however, pleaded any facts in his amended statement of claim which, if established, would make out any one of the grounds on which the Court could set aside any of the trade marks Mr Jurcic and Mr Selwyn registered under the TM Act, or otherwise make any of the grounds on which the registration of their marks could have been opposed under the TM Act. As my summary of the ASC shows, Mr Lamont alleges, and only alleges, infringement of the Malishus Trade Marks. Further, this Court does not have power to cancel the registration of trade marks made in countries outside Australia.
[242] TM Act, s.88(2)(a)
Delivery up
The third order Mr Lamont seeks, which may be described as a “delivery up order”, is as follows (emphasis in original):[243]
All respondents “Surrender or destroy with proof all goods” they have in their possession displaying the word “Malishus” or respondents “M Logo” immediately.
[243] ASC, [102(b)]
This Court has power in a trade mark case to order delivery up of an infringing article for the same reason as Perram J held the Federal Court of Australia as such power:[244]
There is no doubt that the court has a power in a trade mark case to order delivery up of an infringing article; Chancery certainly had such a power – see Slazenger & Son v Feltham & Co [1889] 6 RPC 531 at 538 for an example of the power being exercised. Such a power is the same in principle as the power to deal with representative proceedings in equity. Gummow J saw the nature of such a representative proceeding in equity as being ‘part of the powers and procedures of modern courts of equity of which this court (in respect of matters otherwise within its jurisdiction) is one’: Scarel Pty Ltd & Yates v City Loan and Credit Corporation Pty Ltd (1988) 17 FCR 344 at 349. Hence, as his Honour observed in that case, the source of the power is s 5(2) of the Federal Court of Australia Act 1976 (Cth), which creates this Court as a court of equity.
[244] Solahart Industries Pty Ltd v Solar Shop Pty Ltd (No 2) [2011] FCA 780, at [13]
“An order for delivery up operates in aid of injunctive relief “by removing from the defendant a source of temptation””.[245] I am satisfied from the extensive posts made to social media that there is a sensible possibility that Mr Jurcic or Mr Selwyn or both have in their possession articles of clothing or headgear that have on them the word “Malishus”; and that each of Mr Jurcic and Mr Selwyn would be tempted to sell or offer to sell such articles of clothing or headgear in Australia. I propose, therefore, to order that within 28 days each of Mr Jurcic and Mr Selwyn file and serve an affidavit stating whether they hold any such articles of clothing; and, if they do, identify the articles they hold and whether they have destroyed such articles or, in the alternative, whether they have removed the name “Malishus” from the articles of clothing and headgear.
[245] QS Holdings Sarl v Paul’s Retail Pty Ltd (No 2) [2011] FCA 1038, at [30] (Kenny J), quoting Meagher, Heydon & Leeming, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (Butterworths, 4th ed, 2002) at 905 [27–050]
Damages
Mr Lamont does not claim an account of profits. Instead, he claims “Compensatory Damages”, and “Punitive Damages”. In relation to Mr Jurcic and Mr Selwyn, Mr Lamont claims that they be ordered to pay the following (emphasis and errors in original):[246]
(b)The second respondent [Mr Jurcic] pay the applicant a total of $80,000 for as follows:
(i)8 years of trade mark licencing fees at $2,500 “per year” totalling $20,000; and
(ii)8 years of damaged reputation due to the respondents careless conduct at $5,000 “per year” totalling $40,000; and
(iii)6 years loss and damage to potential business brand and sales growth opportunities due to being held down fighting to protect my rights within (three) “IP Australia cases” and this “Federal Circuit Court case” at $2,500 “per year” totalling $20,000; and
(iv)The applicant receives all “compensatory damages” stated with “interest” at the rate prescribed in rule 26.01 of the Federal Circuit Court Rules
[246] ASC, [103]
(b)The third respondent [Mr Selwyn] pay the applicant a total of $80,000 for as follows:
(i)8 years of trade mark licencing fees at $2,500 “per year” totalling $20,000; and
(ii)8 years of damaged reputation due to the respondents careless conduct at $5,000 “per year” totalling $40,000; and
(iii)6 years loss and damage to potential business brand and sales growth opportunities due to being held down fighting to protect my rights within (three) “IP Australia cases” and “Federal Circuit Court case” at $2,500 “per year” totalling 20,000.
(iv)The applicant receives all “compensatory damages” stated with “interest” at the rate prescribed in rule 26.01 of the Federal Circuit Court Rules
The general principles for assessing damage for trade mark infringement were stated by French J in Paramount Pictures Corporation v Hasluck:[247]
Section 126 of the Act allows an applicant, at its option, to claim damages or an account of profit. The nature of the choice was explained by Windeyer J in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50; (1968) 122 CLR 25 (at 32):
‘The plaintiff whose mark has been infringed can choose between damages or an account of profits. He cannot have both. They are alternative remedies.
The distinction between an account of profits and damages is that by the former the infringer is required to give up his ill-gotten gains to the party whose rights he has infringed: by the latter he is required to compensate the party wronged for the loss he has suffered.’
[247] [2006] FCA 1431, at [33], [34]
That observation clearly proceeded on the basis that the damages recoverable for infringement of a trade mark are compensatory.
In relation to the assessment of damages for the infringement of patents, Jacob J set out a number of principles in Gerber Garment Technology Inc v Lectra Systems Ltd [1995] RPC 383 at 393 and following:
1. Damages are compensatory only.
2.The burden of proof lies on the plaintiff but damages are to be assessed liberally.
3.Where a patentee has licensed his patent, the damages are the lost royalty.
4.It is irrelevant that the defendant could have competed lawfully.
5.Where the patentee has exploited his patent by manufacture and sale, he can claim:
(a)lost profit on sales by the defendant he would have made otherwise;
(b)lost profit on his own sales to the extent that he was forced, by the infringement, to reduce his own price; and
(c)a reasonable royalty on sales by the defendant which he would not have made.
In the 13th Edition of Kerly’s Law of Trade Marks and Trade Names (London, Sweet & Maxwell, 2001) p 18-144, the learned authors set out those principles and suggest that they are also applicable to trade mark infringement. Accepting the compensatory character of damages awarded under s 126 and the like formulation in s 122 of the Patents Act 1990 (Cth), I accept that the principles enunciated by Jacob J are relevant to the assessment of compensatory damages for trade mark infringement under the Australian Act.
It is also relevant to note that even where an applicant cannot establish loss, he or she is entitled to nominal damages.[248]
[248] See Halal Certification Authority Pty Limited v Scadilone Pty Limited [2014] FCA 614 where Perram J ordered nominal damages of $10.
There is no evidence Mr Lamont has licensed any of the Malishus Trade Marks. There is evidence that in 2009 Mr Lamont leased market stalls at Bomaderry Pool Side Markets and Shoalhaven Greyhound Racing Club to advertise and sell his clothing,[249] and that he registered with “My Space” as “MC MALISHUS” and posted material to his Facebook; but there is no evidence that Mr Lamont sold any items of clothing that bore the word “Malishus”. Further, although I have found that Mr Jurcic and Mr Selwyn sold some articles of clothing in Australia, I am satisfied they sold a very small amount, and that this occurred from around July 2011 to August 2013. I am not satisfied, however, that this led Mr Lamont to lose the sale of any item of clothing or headgear and, therefore, any profit on such sale. Nor am I satisfied that Mr Jurcic’s and Mr Selwyn’s use of the domain name or their use of the word “Malishus” as a trade mark in material they posted in their Facebook page, led Mr Lamont to lose the sale of any item of clothing or headgear and, therefore, any profit on that sale. There is no evidence Mr Lamont sold any articles of clothing before July 2011, even though the first of the Malishus Trade Marks had been registered on 7 June 2007. That is a basis for inferring, and I do infer, that Mr Lamont would have made no sales of any articles of clothing from around July 2011 to August 2013. Even if Mr Lamont had sold some articles of clothing before and after July 2011, the evidence cannot support a finding that his sales were less than they would have been had Mr Jurcic or Mr Selwyn not engaged in any of the Infringing Conduct.
[249] Earlier reasons, [67]-[71]
I am also not satisfied that the Infringing Conduct damaged any reputation in the use of any of the Malishus Trade Marks. The evidence concerning the use Mr Lamont made of those trade marks does not satisfy me any, or any substantial, reputation was created in the use of any of those trade marks; and I am not satisfied that Mr Lamont would have developed a reputation in relation to any of the Malishus Trade marks had Mr Jurcic or Mr Selwyn not engaged in any of the Infringing Conduct.
I am therefore not satisfied that Mr Lamont has proved he has suffered any damages because of the Infringing Conduct. I propose, therefore, to award Mr Lamont nominal damages in the amount of $10.
“Punitive damages”
Mr Lamont also claims “punitive damages” as follows (emphasis and errors in original):[250]
[250] ASC, [104]
(a)due to all that the applicant has stated within paragraph 100 and 101 ‘above’; and
(b)Due to the flagrancy of the infringement and conduct of the respondents; and
(c)The conduct of the respondents after the Act constituted the infringement; and
(d)Due to the respondents have continued their conduct to this day causing further excessive damage to the applicants reputation (Facebook screenshots); and
(e)The need to deter the respondents from any further or similar infringements; and
(f)The applicant receives all “Punitive damages” awarded with “interest” at the rate prescribed in rule 26.01 of the Federal Circuit Court Rules.
Although Mr Lamont claims “punitive damages” it is apparent that he is claiming an “additional amount” pursuant to s.126(2) of the TM Act. The principles for assessing additional amounts under that subsection were considered by Perram J in Halal Certification Authority Pty Limited v Scadilone Pty Limited:[251]
[251] [2014] FCA 614, at [96]-[102]
Section 126(2) was inserted into the Trade Marks Act by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). It is very nearly identical to s 115(4) of the Copyright Act 1968 (Cth) and s 122(1A) of the Patents Act 1990 (Cth). Section 75(3) of the Designs Act 2003 (Cth) is broadly to the same effect although it omits explicit reference to any benefit shown to have accrued to the infringing party. The second reading speech which accompanied the introduction of s 126(2) indicated that it would bring the Trade Marks Act into line with the other intellectual property laws by allowing what the Minister for Innovation, Industry, Science and Research referred to in the Senate as ‘additional’ or ‘exemplary’ damages. The avowed purpose of these damages was ‘to increase the deterrence for infringers’.
I mention this because the language of s 126(2) is ‘additional damages’ without any explicit indication that the purpose of an award of damages under it is to create a deterrent. It might perhaps have been possible to glean such a purpose from the apparently punitive language of subsections (2)(a)-(c) but this would need to have been contrasted with the less punitive language of subsections (2)(d)-(e).
On its face it is unclear what the Parliament intended by the word ‘additional’. Section 126(2) may be read as permitting the award of any kind of damages once the matters in subsections (2)(a)-(e) have been considered. So construed it would operate more broadly than a power to award exemplary damages. On the other hand, it may be read so that the award of additional damages is qualified by the penal nature of some of those subparagraphs.
. . . .
The structure of s 126(2) requires the Court to address each of the matters in subparagraphs (2)(a)-(e) and then, in light of them, decide whether there should be an award of additional damages to deter the conduct.
I must, therefore, consider the extent to which any of the matters identified in s.126(2)(a)-(e) of the TM Act apply to the findings I have made, and the evidence before me.
Flagrancy of the Infringing Conduct. I have found that the Infringing Conduct commenced in July 2011. By that time Mr Jurcic and Mr Selwyn were aware Mr Lamont had registered the first Malishus Trade Mark. They were not, however, deterred by that fact; on the contrary, to repeat what Mr Jurcic said in a statutory declaration he made on 18 October 2012, Mr Jurcic and his business partner, Mr Selwyn, “registered the MALISHUS trade mark on 10 December 2011 with a bona fide intention to commercialize the trade mark in Australia”;[252] Mr Jurcic and Mr Selwyn “actively marketed” the “MALISHUS brand of apparel through online and social media channels”, using “an active ecommerce website at which displays our products and shows that our products are being used in a commercial capacity”.[253] Mr Jurcic and Mr Selwyn also did not appear to have been fully deterred by Mr Lamont’s having commenced this proceeding. They have admitted that in around May 2015 the “Malishus Facebook” page of Mr Jurcic and Mr Selwyn contained the statement “Free Shipping Any Where”;[254] that in around October 2015 that Facebook page contained the statement “Free Shipping”;[255] and that in around November 2015 the same Facebook page contained the statement “Free Shipping ends tomorrow”.[256]
[252] Affidavit of D Lamont 12.06.2018, Annexure “A-14”, page 121, [17]
[253] Affidavit of D Lamont, 06.10.2016, [22] (emphasis in original)
[254] ASC, [79], Defence [79]
[255] ASC, [80], Defence [80]
[256] ASC, [81], Defence [81]
Need to deter similar infringements of registered trade marks. Deterrence is of some important in this case because Mr Lamont has been unable to prove any damages, and also because Mr Lamont has been unable to engage legal representation to pursue the rights I have found he has in relation to the Malishus Trade Marks. The additional amount should incorporate an element that would signal to Mr Jurcic and Mr Selwyn that there is a financial cost to the infringement of trade marks even where the owner of the trade mark that has been infringed – Mr Lamont in this case – has been unable to prove he has suffered any damage because of the Infringing Conduct.
Conduct of Mr Jurcic and Mr Selwyn. I have already referred to Mr Jurcic and Mr Selwyn being undeterred in carrying out the Infringing Conduct notwithstanding their being aware of the first Malishus Trade Mark and after Mr Lamont commenced this proceeding. Also relevant is their having received and ignored Mr Lamont’s letter dated 18 May 2012:[257]
[257] Affidavit of D Lamont, 30.04.2014, annexure 85, page 399
I am writing to you in the hope that we can resolve the unfortunate issue as detailed below.
I am aware you are using Malishus spelt the same way as I have spelled it in my trademark. This is unacceptable as this could lead to erroneous brand misidentification/association from our respective customers.
I have sole and exclusive rights to use Malishus spelt this way as per my Trademark [sic] registration for use on my range of T-shirts and other clothing apparel.
I am indifferent to any other way you might wish to spell Malishus for example (Malicious).
In order to resolve this issue it would be appreciated if you could contact me to further discuss a way ahead and suitable resolution.
I wish you well in your future enterprises and I apologise for the inconvenience of you having to change the spelling of the word Malishus on your Sunglasses and any associated advertising.
Benefit accruing because of infringement. Mr Jurcic and Mr Selwyn claim no benefit accrued to them from their use of the word “Malishus” because the business with which they used the word failed. A difficulty with assessing this claim is that Mr Jurcic and Mr Selwyn have given evidence about the extent to which they applied the word “Malishus” to the selling of clothing that I have not accepted; and Mr Jurcic and Mr Selwyn have not produced documents which it is reasonable to suppose is in their power to have produced that would show with some specificity the use they made of names and marks that included the word “Malishus” in the course of their selling and promoting the sale of clothing apparel. Notwithstanding these difficulties, I am satisfied that no substantial benefit accrued to Mr Jurcic or Mr Selwyn because of the Infringing Conduct.
Assessment of additional amount. I am satisfied this is a case where it is appropriate to award additional damages under s.126(2) of the TM Act. I assess additional damages at $25,000. Because Mr Jurcic and Mr Selwyn engaged in the Infringing Conduct in the course of a partnership, I propose to order judgment for this amount, together with nominal damages of $10, jointly against Mr Jurcic and Mr Selwyn.
Interest
Subsection s.76(2) of the Federal Circuit Court Act 1999 (Cth) (FCC Act) provides that an application may be made for interest under s.76(3) of that Act. Subsection 76(3) provides if an application is made for an order under s.76(2) of the FCC Act, and if the Court is not satisfied that good cause has been shown for not making an order for interest under s.76(3) of the FCC Act, the Court must either:
(c)order that there be included in the sum for which judgment is given interest at such rate as the Federal Circuit Court of Australia or the Judge thinks fit on the whole or any part of the money for the whole or any part of the period between:
(i) the date when the cause of action arose; and
(ii) the date as of which judgment is entered; or
(d)without proceeding to calculate interest in accordance with paragraph (c), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest.
Mr Lamont claims interest; and there is nothing to suggest there is good cause for an order not being made under s.76(3) of the FCC Act. I therefore propose to include in the sum for which I propose to give judgment an amount of interest calculated from the day on which Mr Lamont commenced this proceeding, namely, 18 July 2014.
I propose to calculate interest by applying the rates prescribed by the Interest on Judgments Practice Note (GPN-INT) issued by the Federal Court of Australia. That practice note provides for an interest rate of 4% above the cash rate last published by the Reserve Bank of Australia. I propose to apply the average rate of interest over the period 18 July 2014, being the day on which Mr Lamont commenced this proceeding, to 14 November 2019, being the day on which I propose to pronounce my orders. I appreciate that the causes of action on which Mr Lamont relies accrued before 18 July 2014. In my opinion, however, that is the appropriate date from which interest should be calculate because it will be applied to the additional damages I have assessed having regard to conduct that occurred over a significant period of time which I have assessed as a whole. On these assumptions I have calculated interest and the total amount to be paid as follows:[258]
[258] 18/7/14 – 14/11/19 = 1,945 days @ 5.77%; 25,000 x 0.0577 / 365 x 1945 = 7,686.7465; 25,000 + 7,686.75 = 32,686.75
Amount
Period
Interest rate (av.)
Interest
Total
$25,000
18 July 2014 – 14 November 2019
5.77%
$7,686.75
$32,686.75
Claims under the CC Act
Mr Lamont’s claims under the CC Act depend on my finding that at all relevant times he had a reputation in connection with the use of the word “Malishus”. I have set out in the earlier reasons the evidence on which Mr Lamont relies for claiming he had established such reputation.[259] I am not satisfied that the evidence on which Mr Lamont relies has established a sufficient reputation in “Malishus” as a name associated with the sale of clothing by Mr Lamont such as to sustain the claims he makes that the respondents have engaged in misleading or deceptive conduct.
[259] Earlier reasons, [58]-[78]
Other orders and disposition
I propose to make the orders I have indicated I will make. I also propose to make declarations that identify the infringing conduct, and an order that Mr Jurcic and Mr Selwyn pay to Mr Lamont such costs as he may be entitled to as an unrepresented litigant. I also propose to reserve to the parties liberty to apply in relation to any question arising on the implementation or operation of any of these orders. Finally, I propose to order that the proceeding be otherwise dismissed.
I certify that the preceding one hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 14 November 2019
120 Defence, [82]
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