M.D.I. International Pty Ltd v Trio Brothers
[2010] FCA 486
FEDERAL COURT OF AUSTRALIA
M.D.I. International Pty Ltd v Trio Brothers [2010] FCA 486
Citation: M.D.I. International Pty Ltd v Trio Brothers [2010] FCA 486 Parties: M.D.I. INTERNATIONAL PTY LTD ACN 010 277 504 v TRIO BROTHERS TRADING PTY LTD
ACN 079 259 279 and ZHONG MIN QINFile number(s): QUD 148 of 2010 Judges: GREENWOOD J Date of judgment: 18 May 2010 Catchwords: INTELLECTUAL PROPERTY – consideration of an application for an interlocutory injunction on the grounds of contravention of ss 52 and 53 of the Trade Practices Act 1974 (Cth), passing off, infringement of copyright and infringement of a registered trade mark Legislation: Trade Marks Act 1995 (Cth), s 120, s 126
Copyright Act 1968 (Cth), s 195
Trade Practices Act 1974 (Cth), s 52, s 53, s 80Cases cited: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 – cited and quoted
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 – cited
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 – cited and quoted
Taco Co. of Australia Inc. v Taco Bell Pty Ltd (1982) 42 ALR 177 – cited
Campomar v Nike International (2000) 202 CLR 45 – cited
A G Spalding & Brothers v A W Gamage Ltd (1915) 32 RPC 273 – cited
Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 – cited
10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 79 ALR 299 - cited
Hogan v Pacific Dunlop Ltd (1988) 83 ALR 403 - cited
Moorgate Tobacco Co. Limited v Philip Morris Limited (1984) 156 CLR 415 – cited
Warnink v Townend & Sons [1979] AC 731 – cited
Henderson v Radio Corporation Pty Ltd [1960] SR (NSW) 576 – citedDate of hearing: 17 May 2010 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 57 Counsel for the Applicant: Mr P Hackett Solicitor for the Applicant: Wilson Lawyers Counsel for the First and Second Respondents: Mr R M Derrington SC Solicitor for the First and Second Respondents: Holding Redlich
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 148 of 2010
BETWEEN: M.D.I. INTERNATIONAL PTY LTD ACN 010 277 504
ApplicantAND: TRIO BROTHERS TRADING PTY LTD ACN 079 259 279
First RespondentZHONG MIN QIN
Second Respondent
JUDGE:
GREENWOOD J
DATE OF ORDER:
18 MAY 2010
WHERE MADE:
BRISBANE
UPON the applicant and Mr Jack Chi Shan Yang giving the usual undertaking as to damages,
THE COURT ORDERS THAT:
1.Until 4 pm on 21 June 2010, the first and second respondents be restrained, whether by themselves, their servants or agents or otherwise howsoever from displaying, selling, offering to sell or otherwise disposing of or dealing with:
(a)glassware that has the same dimensions and exhibits the same hand‑painted appearance upon glassware as that sold or offered for sale by the applicant under the name “Tallulah” and known as the Tallulah range of glassware or any colourable imitation of the applicant’s Tallulah range of glassware;
other than in the course of recalling or recovering glassware or packaging from persons to whom they have previously supplied the same and/or supplying to the respondents’ legal advisers for the purposes of litigation.
2.Until trial or earlier order, the first and second respondents be restrained, whether by themselves, their servants or agents or otherwise howsoever from displaying, selling, offering to sell or otherwise disposing of or dealing with:
(b) packaging that:
(i)has the same dimensions and appearance as that used by the Applicant under the name “Tallulah” with distinctive underline “arc intersects cross” below the word “Tallulah” or any other colourable imitation of the same;
(ii)uses or incorporates Trade Mark No 1272995 or any other colourable imitation of the Trade Mark No 1272995;
(iii)has been designed by the Applicant and which includes a specially designed protective bed incorporating cushioning to protect the glassware during transportation and specially moulded cardboard security tabs to restrain the glassware when transported and displayed and which packaging is identified in paragraph 34 of the affidavit of Mr Yang sworn 23 March 2010 and filed on 28 April 2010 and which is incorporated into exhibits A, B, C and D tendered in these proceedings on 17 May 2010 by the Applicant;
other than in the course of recalling or recovering glassware or packaging from persons to whom they have previously supplied the same and/or supplying to the respondents’ legal advisers for the purposes of litigation.
3.The costs of and incidental to the application be reserved.
4.The notice of motion filed on 28 April 2010 be listed for hearing at 10.15 am on 21 June 2010.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 148 of 2010
BETWEEN: M.DI. INTERNATIONAL PTY LTD ACN 010 277 504
ApplicantAND: TRIO BROTHERS TRADING PTY LTD ACN 079 259 279
First RespondentZHONG MIN QIN
Second Respondent
JUDGE:
GREENWOOD J
DATE:
18 MAY 2010
PLACE:
BRISBANE
REASONS FOR JUDGMENT
This is an application for an interlocutory injunction until trial or further Order.
In the principal proceeding, the applicant seeks an injunction restraining the respondents or either of them from:
(a)passing off glasses not made by the applicant as glasses of the applicant by use of the Packaging or Trade Mark or any other colourable imitation of the Packaging or Trade Mark or otherwise howsoever pursuant to s 80 of the [Trade Practices Act 1974 (Cth)] or otherwise;
(b)using Registered Trade Mark No 1272995 or any part thereof or any other colourable imitation of [the Trade Mark] or otherwise howsoever pursuant to s 126 of the Trade Marks Act 1995 (Cth) or alternatively, s 80 of the T P A;
(c)using the Packaging or any part thereof or any other colourable imitation of the Packaging or otherwise howsoever pursuant to s 195 of the Copyright Act 1968 (Cth) or alternatively, s 80 of the TPA.
Apart from the injunctions framed in the above terms, the applicant seeks as final relief an injunction directing the respondents to deliver up to the applicant for destruction all glassware products and packaging the use of which would infringe any of the above injunctions.
The injunction framed at (a) seeks to prevent the respondents from continuing to pass off glasses not made by the applicant as glasses of the applicant by use of the packaging or the trade mark or any colourable imitation of those things or otherwise howsoever. The injunction at (b) is framed in terms of any use of the trade mark, use of any part of it, or the adoption of any colourable imitation of the trade mark. The injunction at (c) relies upon a contended infringement of the copyright subsisting in an original artistic work on the packaging. Accordingly, the injunctions at (a) and (c) relate to the packaging and the injunction at (b) relates to any use of the trade mark in connection with goods for which the mark is registered which includes glassware. Injunction (b) goes beyond the packaging. The injunction at para 2 of the principal application provides for delivery up and destruction of glassware products falling within the scope of injunctions (a), (b) and (c).
The applicant otherwise seeks damages or alternatively an account of profits, in the principal application.
By the Notice of Motion, the applicant seeks interlocutory injunctions in terms of (a), (b) and (c) above.
On the hearing of the Motion, the respondents contended that they thought that the scope of the relief sought by the interlocutory application was, according to its terms, confined to relief in relation to the packaging for the glassware rather than relief in relation to the items of glassware independently of the packaging. The applicant contends that para (a) of the interlocutory application comprehends relief in relation to the items of glassware and para 2 of the principal application makes it plain that relief is sought in relation to the items of glassware and not just the packaging.
On 14 May 2010 the solicitors for the respondents wrote to the solicitors for the applicant observing that the interlocutory application sought an order preventing the respondents from using the packaging for the glassware, or use of the trade mark. They said that the respondents had already stopped using the packaging and since use of the trade mark was confined to the packaging, no further use of the trade mark arose. They said, however, that the respondents would consent to orders directed to those matters with costs reserved. They also said that since para 1(a) of the interlocutory application was framed in terms of passing off glasses in the packaging complained of, the packaging would need to be defined in a particular way for the purposes of the consent orders.
On 14 May 2010 the solicitors for the applicant responded and observed that the cessation of selling goods (glassware) in the packaging complained of was the subject of undertakings given inter-partes by the respondents on 1 April 2010 together with an undertaking to recall the products from retailers. The applicant, by its lawyers, contended that the respondents had breached those undertakings as they had continued to offer the products in the packaging (and out of the packaging) for sale to retailers, and stock had not been recalled from retailers. The applicant’s lawyers complained that the products were still on display and available for purchase at retail outlets. They also said that Mr McKewen’s affidavit sworn 14 May 2010 deposed to the contention that the glassware sold by the respondents is identical to that of the applicant’s glassware “as to its dimensions, shape and the like”. They observed that the glassware “has been decorated in the same, or very similar manner”. The applicant’s lawyers referred to para 2 of the principal application in relation to the glassware products; welcomed the consent orders in relation to the packaging and observed that the desire of the respondents “to seek clarification that the injunctions would not apply to the sale of glassware itself leads to a concern that your clients intend to sell unpackaged glassware to defeat the injunctive relief our client seeks at paragraph 2 of the [principal] Application”.
The applicant’s lawyers sought further clarification from the respondents’ lawyers on those matters.
Counsel for the respondents on the hearing of the motion urges that the question of continuing use by the respondents of the packaging for the glassware is simply not in issue as the respondents have made it plain that they will consent to Orders concerning the packaging. The applicant has framed a draft Order to give effect to that commitment. There was continuing argument concerning the scope of para 1(b)(iii) of the draft which is directed to the internal design and configuration of the packaging. That part of the draft Order is to be reframed to accurately describe the characteristics of the packaging unique to the applicant’s methodology for constraining glassware from falling out of packaging when open so as to display the glassware within. The proposed consent order is now set out at [39] of these reasons.
The Order that the applicant seeks on the hearing of the Motion is an Order restraining the respondents from “importing into Australia, displaying, selling, offering to sell or otherwise disposing of or dealing with (a) glassware that has the same dimensions and hand-painted appearance as that marketed by the applicant under the name “Tallulah” and known as the Tallulah Range or any other colourable imitation of the Applicant’s glassware” other than for the purposes of effecting a recall or briefing the respondents’ lawyers. The applicant also seeks the consent orders in relation to the packaging: 1(b)(i), (ii) and (iii).
In support of the interlocutory Orders and particularly the contentious order 1(a) described above, the applicant relies upon the affidavit of Mr Trevis McKewen sworn 28 April 2010, the affidavit of Mr Jack Chi Shan Yang sworn 28 April 2010 and the affidavit of Mr Leslie John Power sworn 28 April 2010. These affidavits were served on the solicitors for the respondents in support of the Notice of Motion filed 28 April 2010. The applicant also sought leave to read and file the further affidavit of Leslie John Power sworn 14 May 2010 and the further affidavit of Trevis McKewen sworn 14 May 2010. Objections were taken to parts of paras 4, 6, 7, 8, 9 and 13 of the further affidavit of Mr McKewen. Those parts to which objections were taken were not pressed by the applicant. It is not necessary to identify those matters in these reasons. Mr McKewen is the applicant’s business manager. He has worked for the applicant for five years and he says he has a detailed and intricate knowledge of the development and marketing and distribution of the applicant’s Tallulah glassware range.
Objection was taken to paras 26 and 27 of Mr McKewen’s further affidavit which set out the details of the costs incurred by the applicant in developing the Tallulah range of glassware. Counsel for the applicant said that he did not propose to take the Court to those matters in support of the application.
Objection was also taken to paras 28 to 35 (the remainder of the affidavit). Those paragraphs were pressed by the applicant. Paragraphs 28, 29 and 30 go to the steps taken by the applicant in developing the packaging design for particular glassware. Paragraph 31 addresses the deponents’ assessment of the construction and dimensions of the respondents’ packaging as compared with the applicant’s packaging. Paragraph 32 says that the applicant’s packaging is specific to the Tallulah glassware range. Paragraph 33 says that the first respondent has adopted forty different item codes, 4 different glassware product lines and that they are all copies of the applicant’s established Tallulah product lines. He says there are no variations to the range in terms of construction, design and dimensions of glassware with the exception of 1 wine glass which has a 12 millimetre shorter stem. He says that the glassware sold and offered for sale by the respondents “has an identical match of glassware of the applicant”. He says that the “decoration varies only slightly with respect to graphics and decorative finish”. At para 35, he again says that the glassware products of the respondents “are identical in design and shape and very similar in terms of decoration to the ‘tallulah’ glassware range of the applicants”. Paragraph 34 addresses the packaging of the respondents.
Paragraphs 33 and 35 are conclusionary and in a sense swear the issue of similarity of design without identifying the foundation facts upon which the conclusion is based. Mr McKewen says he has a detailed and intricate knowledge of the applicant’s glassware range and that knowledge forms the basis for his comments. Nevertheless, the comments need to be supported by foundation facts. By themselves, these paragraphs do not assist me in determining whether the applicant has established the threshold for the interlocutory relief. As to the other challenged paragraphs, they go to the packaging issues which are now resolved. Those paragraphs may, however, remain relevant to discretionary interlocutory relief concerning the glassware itself and are thus admitted.
The respondents say that they have not had an opportunity to consider the further affidavit of Mr Power. Counsel for the respondents did not receive the affidavit until the morning of the application. The affidavit is 14 pages and contains 24 exhibits comprising 164 pages in all. However, the affidavit was emailed to the solicitors for the respondents on Friday, 14 May 2010. The email was not received. They were emailed again but not received. They were then faxed to the solicitors and an email was received by the applicant’s solicitors at 8.29pm on 14 May 2010 which seems to suggest that the faxed material was received. Nevertheless, I accept that the material was not available to senior counsel for the respondents until Monday morning.
The affidavit describes and exhibits the sequence of correspondence and exchanges between the applicant’s lawyers, the former lawyers for the respondents and the respondents’ present lawyers. I have given leave to read and file the affidavit in support of the application subject to the question of whether an opportunity ought to be afforded to the respondents to further address particular matters raised by the affidavit which might become material to any question to be determined in the interlocutory application.
Since the respondents have been for some time considering whether the applicant’s complaint about the sale of the packaged glasses offended any rights of the applicant and whether undertakings ought to be given (and ultimately consent orders made) not to sell or offer for sale glasses in the packaging objected to by the applicant, I do not accept that the respondents are taken by surprise by an application that addresses whether the glasses (outside and independent of the packaging) also offend the same body of rights relied upon (and thus considered by the respondents in connection with the packaging) by the applicant.
The applicant seeks interlocutory Order 1(a) on a number of grounds.
First, the applicant says that the first respondent, Trio Brothers Trading Pty Ltd (“Trio”), has engaged in conduct in contravention of ss 52 and 53 of the Trade Practices Act 1974 (Cth) by importing, selling and offering for sale glassware which strongly resembles in its shape, dimensions, design, pattern and features glassware within the range of the applicant’s Tallulah glassware and, in particular, champagne flutes, shot glasses and wine glasses. That conduct is said to contain a misrepresentation of fact, namely, that the glassware of the respondent Trio is the glassware of the applicant or glassware that has its source or origin in the applicant. The respondents’ conduct of supplying its glassware by wholesale to retailers within the same mix and distribution of retailers supplied by the applicant misrepresents the true position, it is said, and thus misleads or deceives those retailers as to the source or origin of the respondents’ glassware.
Further, the conduct of the respondents is said to contain a misrepresentation of fact to the public as those items of glassware are sold and offered for sale by retailers to consumers. The similarity of features is said to be so striking in respect of precisely the same product as the applicant’s product that either a retailer or a consumer purchasing from a retailer would be wrongly led to the conclusion that the glassware of the respondents is that of the applicant. The second respondent Mr Zhong Min Qin is said to be knowingly concerned in the conduct of the first respondent.
The second ground relied upon by the applicant is that the conduct of the respondents is said to infringe the applicant’s Registered Trade Mark as the respondent Trio has used, as a trade mark, a sign that is deceptively similar to the trade mark in relation to glassware for which the trade mark is registered: s 120 Trade Marks Act 1995 (Cth).
The third ground is that the respondent Trio, by importing, selling and offering for sale glassware which bears or exhibits the features of design apparent on the applicant’s glassware, has infringed, in effect by reverse copying the applicant’s glassware in respect of each category of glass, the copyright subsisting in the applicant’s original artistic work for each category of glass. The applicant says that the author of the work in which the copyright subsists was an employee of the applicant and thus the copyright vests in the applicant.
The fourth ground is that the facts demonstrating a prima facie case in respect of the first three grounds also demonstrate a prima facie case of passing off.
The organising principles governing the grant or otherwise of an interlocutory injunction are those principles identified by Gummow and Hayne JJ in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65] to [72]; Gleeson CJ and Crennan J agreeing at [19] with the explanation of those principles. At [65], [67] and [70] Gummow and Hayne JJ said this:
65.The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:
“The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.”
By using the phrase ‘prima facie case’, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:
How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.
…
67.Various views have been expressed and assumptions made respecting the relationship between the judgment of this Court in Beecham and the speech of Lord Diplock in the subsequent decision, American Cyanamid Co v Ethicon Ltd.
…
70.When Beecham and American Cyanamid are read with an understanding of the issues for determination and an appreciation of the similarity in outcome, much of the assumed disparity in principle between them loses its force. There is no objection to the use of the phrase ‘serious question’ if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham, depends upon the considerations emphasised in Beecham.
At [19] Gleeson CJ and Crennan J said:
We agree with the explanation of these organising principles in the reasons of Gummow and Hayne JJ, and their reiteration that the doctrine of the Court established in [Beecham] should be followed.
See also Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153 per Mason ACJ. In Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 219 Gleeson CJ said:
18The extent to which it is necessary, or appropriate, to examine the legal merits of a plaintiff’s claim for final relief, in determining whether to grant an interlocutory injunction, will depend upon the circumstances of the case. There is no inflexible rule. It may depend upon the nature of the dispute. For example, if there is little room for argument about the legal basis of a plaintiff’s case, and the dispute is about the facts, a court may be persuaded easily, at an interlocutory stage, that there is sufficient evidence to show, prima facie, an entitlement to final relief. The court may then move on to discretionary considerations including the balance of convenience.
The background facts are deposed to by Mr Yang who is one of the two directors of the applicant. The other director is his wife, Mrs Rachel Shun Chi Yang. Mr Yang says this.
The applicant was incorporated in 1983.
The applicant is in the business of designing, manufacturing, importing and distributing at the wholesale functional level, giftware and novelty products in Australia and overseas. It employs 27 people. The applicant has four full-time and one part-time staff who work in the research for and development of products. Those staff consist of a senior graphics designer, two assistant graphic designers, a photographer and a product development manager. The applicant’s sales turnover exceeds approximately $11m per annum. The applicant expends approximately $275,000 on research and development of new products.
The applicant supplies approximately 3,000 retailers with novelty and gift items throughout every state of Australia. The majority of those retailers are in New South Wales, Queensland and Victoria. While most of these retailers are located in the metropolitan areas, the applicant supplies 657 ‘account holders’ throughout regional and country Australia. The applicant has two predominant sources of buyers. The first is franchisees who purchase items either on the recommendation or approval of their franchisors or as a result of the election of franchisees to establish a relationship with the applicant independently of the franchisors. The second source is independent traders. Examples of franchisees who acquire the applicant’s products are “Australian Geographic”, “Nextra Newsagencies”, “FreeChoice Tobacconists”, “Smokemart”, “King of Gifts” and other networks of retailers. The applicant’s items are sold through newsagencies, tobacco retailers, novelty retailers and other diversified retail outlets apart from franchise sites.
In mid-2007, the applicant perceived that a niche product might be developed in the ‘drinking glass novelty market for quality hand-blown and hand-decorated glassware’. During the second half of 2007, the applicant’s research and development employees began work on developing a range of drinking glasses. The glassware products were given the name ‘Tallulah’ after the daughter of the graphic designer employed by the applicant. By mid-January 2008, the applicant had finalised the ‘preferred shape and design of the proposed range of glasses and the artwork to decorate them and their specialist packaging design’.
The applicant caused pre-production samples to be manufactured for promotion to retailers. The applicant’s representatives travelled to China. The applicant appointed a manufacturing agent to identify suitable glassware manufacturers. The applicant appointed artists to hand-paint and decorate the glasses. Packaging manufacturers were appointed. Investment was made in manufacturing samples of the glasses exhibiting their design decoration. Examples of the packaging were produced so that the complete packaged product could be promoted to retailers at industry gift fairs.
The applicant launched the Tallulah range of glassware by a promotion conducted at a fair held in Sydney in February 2008 described as the “Reed Gift Fair” which is a trade fair for the novelty and gift industry at which wholesalers promote their products to potential retail customers for purchase.
Initially the range of glassware consisted of 23 different glasses including champagne flutes, martini glasses and wine glasses. Each piece is hand-blown and is either black or transparent. The transparent glasses have a clear bowl although the base and stems are generally coloured. An example of this is the champagne flutes. The upper reaches of the stem and the bowl of the flute are decorated with hand-painted silver scrolling and imitation gemstones and celebratory numerals, words or images such as the numbers 18, 21, 30, 40 and 50, the word ‘engagement’ or a particular symbol. The numerals represent significant anniversaries. The same design method is adopted in relation to the black martini glasses and black wine glasses.
The quality of each glass within the range and its decoration is important in establishing the reputation of the ‘Tallulah’ glassware as representing a quality glass product aimed specifically at the identified market. The selection of quality glass and properly finished hand-blown glass product is aimed at producing a glass that is clear and bright rather than cloudy, dirty or dull in appearance. The glasses are inspected as part of a control process so that those that are chipped, exhibit rough or sharp rims, waterlines, reams, scratches or air bubbles are discarded. Decoration of the glass is also important. It is carried out by hand and is also subject to quality control processes.
Mr Yang also says that the glassware range has been promoted by the applicant at bi-annual gift fairs in Sydney, and annual gift fairs in Melbourne and Brisbane during 2008 and 2009 and at the Reed Gift Fair in Sydney in February 2010. The applicant employs 10 sales representatives throughout Australia who visit retail stores who promote and take orders for the products. There are 85 products within the range and 40 further products are under development. The shot glasses were introduced into the range in February 2009. They exhibit different decoration and packaging. Currently all shot glasses are black glass and they are all the same dimension.
Apart from the development of the product range of glasses, the applicant also developed packaging for the Tallulah range which is described as unique. The characteristics of the packaging are described extensively in the affidavit of Mr Yang. It is not necessary to repeat in these reasons all of the features or characteristics of the packaging described at para 32 of Mr Yang’s affidavit. Mr Yang deposes that in the course of 2009 the applicant introduced alternative packaging which is the same as that originally developed for the range in all respects except that the cardboard is a gloss white cardboard rather than a gloss black cardboard with the features described at (a) to (h) of para 32 of Mr Yang’s affidavit.
The issue between the parties concerning the packaging is resolved and the form of the Order, by consent, will be that the respondents are restrained until trial or earlier Order from displaying, selling, offering to sell or otherwise disposing of or dealing with:
(b) packaging that:
(i)has the same dimensions and appearance as that used by the Applicant under the name “Tallulah” with distinctive underline “arc intersects cross” below the word “Tallulah” or any other colourable imitation of the same;
(ii)uses or incorporates Trade Mark No 1272995 or any other colourable imitation of the Trade Mark No 1272995;
(iii)has been designed by the Applicant and which includes a specially designed protective bed incorporating cushioning to protect the glassware during transportation and specially moulded cardboard security tabs to restrain the glassware when transported and displayed and which packaging is identified in paragraph 34 of the affidavit of Mr Yang sworn 23 March 2010 and filed on 28 April 2010 and which is incorporated into exhibits A B C and D tendered in these proceedings on 17 May 2010 by the Applicant;
other than in the course of recalling or recovering glassware or packaging from persons to whom they have previously supplied the same and/or supplying to the respondents’ legal advisers for the purposes of litigation.
In the course of the hearing, examples of three glassware products within their respective packaging or containers were admitted into evidence together with an example of packaging without an item of glassware within it. Exhibit A consists of two boxes containing pink stemmed champagne glasses. The first box (A1) is an example of the applicant’s product and the other (A2) is the respondents’ article said to infringe the applicant’s rights. Exhibit B is two sets of shot glasses manufactured by the applicant and the respondents marked (B1) and (B2) respectively. Exhibit C is two boxes of black glassware being wine glasses marked with “Happy Birthday” lettering: (C1) represents the applicant’s product and (C2) is that of the respondents. Exhibit D consists of two boxes of empty packaging: (D1) represents the applicant’s packaging and (D2) is that of the respondents.
It is not necessary in these reasons to describe in detail the similarities and differences between the champagne flutes of the applicant and the respondents or the other glassware admitted into evidence. Nor is it necessary to describe the similarities and differences in the packaging. It is sufficient to say this as to the glassware. Although there are differences in, for example, the strength of the colour pink in the stem of the champagne flute and the degree of spiralling design on one glass as opposed to the other, the differences are very slight with the result that the similarity between the glassware of the applicant and the respondents is striking. They strongly resemble each other. Although the packaging issue is resolved for the purposes of an interlocutory order, it is clear that the similarities between the applicant’s packaging and that of the respondents is also striking. In the case of the packaging, the respondents’ packaging also exhibits one element of the device mark consisting of an arc with a cross at the centre of the arc which, having regard to the Trade Mark Certificate, is a feature of the graphic device which sits under the stylised word tallulah. Notwithstanding that the packaging controversy is resolved, the similarity in the packaging adopted by the respondents lends weight to the conclusion, for interlocutory purposes, that there is a prima facie case that the respondents have sought to “get up” the glassware articles in a way which is strikingly similar to the applicant’s glassware.
Plainly, the respondents have set about a course of trying to make the packaged articles look strikingly similar to the applicant’s articles and when the glasses are examined side by side and independently of each other they too have striking similarities. The difference in the packaging is fundamentally the adoption by the respondents of the name “All Occasions” in the place where the mark “tallulah” is placed on the applicant’s box. The arc and cross appear on the respondents’ packaging in the same place as that of the applicant. Of course, use of a mark on packaging is use of the mark in connection with the articles for which the trade mark is registered, namely, glassware even though the trade mark is not endorsed on the glassware itself. That packaging is now abandoned and with it that element of the device trade mark.
The dominant part of the trade mark is the mark or sign “tallulah”. Since the “arc and cross” is now abandoned the question of whether use of that element of the device is use of a mark which is deceptively similar to the registered device mark does not now arise.
Mr McKewen in his affidavit filed 28 April 2010 describes the discovery by representatives of the applicant of sales of the respondents’ glassware at various retail outlets. On 11 February 2010, the applicant identified sales of the respondents’ glassware at an outlet described as “Tobacco Station” at Beenleigh in Queensland. Between 12 February 2010 and 17 March 2010 the applicant’s sales staff identified 22 other examples of the respondents’ glassware products being available in different locations throughout Australia. Those examples were predominantly at two large national tobacconist chains described as “Free Choice Tobacconists” and “Tobacco Station”. Some purchases were made of the respondents’ glassware. Six champagne flutes were purchased from a Free Choice Tobacconist site at Inala. On 16 March 2010, Mr McKewen spoke with Ms Causby, the National Buyer for the “Smokemart” franchise chain in Adelaide. Ms Causby told Mr McKewen that a person representing the first respondent had offered to supply Smokemart with the first respondent’s glassware at attractive prices. There are 75 retail outlets within the Smokemart franchise. On 17 March 2010, the applicant identified sales of the respondents’ shot glasses at a site described as “Tobacco Station” at Morayfield in Queensland.
On the affidavit evidence, it is clear that the respondents are supplying the identified retail outlets with strikingly similar glassware to that of the applicant. The sales outlets fall within the same mix and scope of sales outlets which acquire the applicant’s glassware and which re‑supply that glassware to the public at large. Having regard to the similarities between the respondents’ products and that of the applicant for precisely the same articles of the same shape and design and not merely glass substitutes for that of the applicant and the nature of the retail outlets, I accept for interlocutory purposes that there is a real possibility of confusion of members of the public in making choices as to purchase of the glassware articles.
The applicant says that it has been approached by retail outlets asking whether it can match the price offered by the respondents or offer a better price. That seems to suggest that buyers at the wholesale level understand that the products of the respondents are not that of the applicant. However, the applicant says that such approaches are equally consistent with the misled impression in the mind of the wholesale buyer that a better price can be obtained by going directly to the wholesale supplier of the same product rather than acquiring product from the respondents who, it might be thought by buyers, are supplying the same product.
More importantly, the conduct of the respondents is said to constitute a representation of fact to members of the public who might wish to purchase glassware from the various retail outlets supplied by both the applicant and the respondents or other outlets supplied by each other, that the glassware of the respondents is the glassware of the applicant or is of the same quality and exhibits the same characteristics as that of the applicant’s glassware.
Whether or not conduct amounts to a representation is ultimately a question of fact to be decided by considering what was said and done against the background of all the surrounding circumstances: Taco Co. of Australia Inc. v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202 per Deane and Fitzgerald JJ; Campomar v Nike International (2000) 202 CLR 45 at [100] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ. I am satisfied that the conduct of the respondents was intended to mislead. I am satisfied that the respondents have set about a course of seeking to get up their glassware in a way strikingly similar to that of the applicant. I am satisfied that a reasonable member of the class of buyers within the public, that is to say, the hypothetical individual, is likely to be misled into thinking that the glassware of the respondents is that of or emanates from the applicant: Campomar v Nike International, per the Court at [97] to [107]. These observations, of course, are solely for the purposes of determining whether there is a prima facie case or a serious question to be tried of a contravention of ss 52 or 53 of the Trade Practices Act. I am so satisfied.
Section 52 is designed to protect consumers. However, passing off, at least so far as interlocutory equitable relief is concerned, protects against injury to the goodwill built up by the activities of the applicant: A G Spalding & Brothers v A W Gamage Ltd (1915) 32 RPC 273; Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 at 60; Campomar v Nike International per the Court at [108] to [110]. Australian Courts have rejected the requirement that there be a “common field of activity” between the commercial activities of the parties and, in deciding whether purchasers are likely to believe that the goods of the respondents have an endorsement, or other association with, the applicant, the Courts in Australia have not applied any “erroneous assumption” doctrine: 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 79 ALR 299 at pp 324 and 325; Hogan v Pacific Dunlop Ltd (1988) 83 ALR 403 at 426. In Moorgate Tobacco Co. Limited v Philip Morris Limited (1984) 156 CLR 415 at 445, Deane J observed that the traditional doctrine of passing off has adapted to meet new circumstances involving the deceptive or confusing use of names or other indicia to persuade purchasers or customers to believe that goods or services have an association, quality or endorsement which belongs or would belong to goods or services of or associated with others: see Warnink v Townend & Sons [1979] AC 731; Henderson v Radio Corporation Pty Ltd [1960] SR (NSW) 576.
I am satisfied on the material that the conduct of the respondents in getting up the glassware in a strikingly similar way to that of the applicant is passing off on the part of the respondents.
As to the question of the trade mark, there is no present threat by the respondents to use any part of the trade mark. The packaging has been abandoned and, with it, an element of the registered trade mark.
As to the copyright, I am not satisfied that a prima facie case is made out in relation to a contended infringement by the respondents of the copyright subsisting in the applicant’s artistic work for the design of the features of the applicant’s glassware said to have been, in effect, reproduced in a three‑dimensional form by copying the three‑dimensional reproduction of the work on the applicant’s glassware. The applicant appears to have made an industrial application of a corresponding design for the purposes of Division 8 of the Copyright Act 1968 (Cth) with the result that by operation of s 77 of the Copyright Act no infringement of the copyright arises.
I am satisfied that having regard to the diversity of the sales of the respondents’ product and the present threat to the applicant’s goodwill that the balance of convenience favours the grant of an interlocutory injunction. The likely inconvenience or injury to the applicant is outweighed by the injury which the respondents will suffer by reason of the grant of the injunction. In considering the balance of convenience I also have regard to the strength of the applicant’s contention as to the similarity in the glassware and the respondents’ conduct of getting up its products in a way that is strikingly similar to that of the applicant. Therefore, the discretionary factors favour the grant of the relief.
During the course of the hearing I invited counsel for the respondents, although it was not offered on the initiative of the respondents, to say whether the respondents would be willing to give an undertaking to keep accounts so that, ultimately, the applicant would be able to identify the profit lost or at its election determine a basis for assessing the damage suffered by it. Counsel for the respondents offered that undertaking during the course of the hearing. The applicant resists refusal of the relief on the footing that such an undertaking is offered. The applicant says that the threat to its reputation and goodwill and the difficulties which inform the balance of convenience remain difficulties for final relief. The applicant presses injunctions as part of its final relief. More particularly, the applicant relies upon the further affidavit of Mr Power sworn 14 May 2010 setting out the chronology of exchanges between the parties and their lawyers as demonstrating that the respondents have failed to honour earlier undertakings and thus the applicant can have no confidence that proper accounts would be kept. These anomalies in the conduct of the respondents are said to extend to a failure to make proper disclosures as to the number of articles imported and offered for sale and a failure to honour a commitment to recall product supplied to the various outlets. There seems to be some force in the applicant’s submission that the respondents provided incomplete or inaccurate information about importation and sales as the respondents sought to explain the reasons for the inconsistencies. Although there might be argument about whether those explanations are well placed or not, it seems common ground that the information provided was not complete. It is not necessary to examine in these reasons whether the explanations are well placed or not. It is, however, relevant to recognise that a position was taken and there was a failure to provide the information.
Accordingly, it seems to me inappropriate to refuse interlocutory relief which would otherwise be granted, on the footing that the respondents have responded to my inquiry by offering an undertaking to keep accounts.
Accordingly, an order will be made until trial or earlier order restraining the respondents from importing into Australia, displaying, selling, offering to sell or otherwise disposing of or dealing with glassware that has the same dimensions and exhibits the same hand‑painted appearance upon glassware as that sold or offered for sale by the applicant under the name “Tallulah” and known as the Tallulah range of glassware or any colourable imitation of the applicant’s Tallulah range of glassware.
The costs of the interlocutory application will be reserved.
I certify that the preceding fifty‑seven (57) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. Associate:
Dated: 18 May 2010
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