O'Connor and Cowley Concepts Pty Ltd v Moller Og Company and Ors (No.3) - [2009] FMCA 1308

FEDERAL MAGISTRATES COURT OF AUSTRALIA

O'CONNOR & COWLEY CONCEPTS PTY LTD v MOLLER OG COMPANY & ORS (No.3)

[2009] FMCA 1308

PRACTICE AND PROCEDURE – Stay of proceedings – trade mark infringement proceedings in court and opposition proceedings before Registrar of Trade Marks – consideration of relevant factors – stay refused.

TRADE MARKS – Trademark infringement action – whether action should be stayed pending determining of opposition proceedings to registration of respondent’s trademark.

Trade Marks Act1995, ss.42, 60

Vulcan Australia Ltd v ML D’Astoli & Co Pty Ltd (1995) 32 IPR 25
Unilever Plc v Cadbury Ltd (2001) 54 IPR 537
Cadbury UK Ltd v Registrar of Trade Marks (2008) FCA 1126
Outrigger Hotels Hawaii v Evangelista Pty Ltd (2000) 49 IPR 164

Applicant:

O'CONNOR & COWLEY CONCEPTS PTY LTD

First Respondent:

MOLLER OG COMPANY A/S

Second Respondent:

PHILIP COWLEY

Third Respondent:

ELIZABETH O’CONNOR-COWLEY

File Number:

BRG 830 of 2008

Judgment of:

Wilson FM

Hearing date:

2 October 2009

Date of Last Submission:

2 October 2009

Delivered at:

Brisbane

Orders Delivered on:

2 October 2009

Reasons Delivered on:

22 January 2010

REPRESENTATION

Counsel for the Applicant:

Mr Logan

Solicitors for the Applicant:

Xavier Kelly & Co

Counsel for the Respondents:

Mr D. Williams

Solicitors for the Respondents:

Clayton Utz

ORDERS

That the first respondent’s application for a stay of this proceeding is dismissed.
That the applicant file and serve an amended Statement of Claim on or before 9 October 2009.
That the first respondent file and serve any amended Defence on or before 23 October 2009.
That it be declared that it is appropriate, in the interests of the administration of justice, to allow discovery in this proceeding.
That on or before 30 October 2009, each of the applicant and the first respondent file and serve verified lists of documents in accordance with Order 15 rule 2 of the Federal Court Rules, in respect of categories of documents exchanged pursuant to order 8 of the order of Wilson FM dated 25 June 2009.
That the parties complete inspection of discovered documents on or before 27 November 2009.
That the parties be directed to participate in and act reasonably and genuinely in a mediation, to be conducted on or before 18 December 2009. The applicant and the first respondent each pay 50% of the costs of the mediator and the venue.
That the evidence in chief of all witnesses (including any experts) to be relied upon by all parties at the trial of this proceeding shall be on affidavit, except with the leave of the court.
That the applicant file and serve any further affidavits of evidence in chief upon which they intend to rely at trial, on or before 16 January 2010.
That the first respondent file and serve its affidavits of evidence in chief, on or before 19 February 2010.
That the applicant file and serve any evidence in reply, on or before 12 March 2010.
That the proceedings be set down for hearing for 4 days commencing at 10.00am 6 April 2010 in the Federal Magistrates Court of Australia at Brisbane.
That the costs of the parties of and incidental to the directions hearing be reserved.
That the first respondent pay the applicant’s costs of and incidental to the stay application.
That the applicant pay any costs of the first respondent thrown away by reason of the applicant’s amendment of the Statement of Claim.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BRG 830 of 2008

O'CONNOR & COWLEY CONCEPTS PTY LTD

Applicant

And

MOLLER OG COMPANY A/S

First Respondent

PHILIP COWLEY

Second Respondent

ELIZABETH O’CONNOR-COWLEY

Third Respondent

REASONS FOR JUDGMENT

On 2 October 2009 this Court heard an application that had been brought by the first respondent seeking a stay of these proceedings. That application was refused, and the Court indicated that it would give its reasons for that decision subsequently. These are the reasons for the refusal of a stay.
The proceedings in this Court concern the first respondent’s conduct in distributing to Australia for sale to the public items of clothing that are marketed under the name MINYMO or TINY MINYMO. It is alleged by the applicant, which is the licensee of a trade mark owned by the second and third respondents of EENI MEENI MIINI MOH, also for clothing, that the first respondent has infringed the second and third respondents’ trademark, has engaged in passing off, and has acted in contravention of the Trade Practices Act 1974. By proposed amendment to the Statement of Claim, not opposed by the first respondent, the applicant also seeks to allege conduct in Australia by the first respondent by its appointed agent and distributor.
By application filed 10 December 2008 the applicant seeks the following relief against the first respondent:
(1)A permanent injunction restraining the first respondent, whether by itself, its agents, servants or otherwise howsoever from:-
(a)Infringing Australian registered trade mark number 809661 (“the trade mark”), and in particular, from using the mark “MINYMO”, or any other sign or mark substantially identical with or deceptively similar to the trade mark, including the mark “TINY MINYMO”, in the course of trade in relation to any of the goods in respect of which the trade mark is registered;
(b)Conducting the business of the first respondent, insofar as offering clothing items to the public or clothing retailers under the name or trade mark “MINYMO”, or any other name which is substantially identical or deceptively similar to the trade mark, including the mark “TINY MINYMO”;
(c)Representing that the business or goods of the first respondent have the sponsorship or approval of, or is connected in the course of trade or affiliated with, the applicant’s goods, by use in relation to that business of the mark “MINYMO”, or any other name or trade mark which is substantially identical with or deceptively similar to the trade mark or is likely to mislead and deceive the public into the belief that the first respondent is connected with the applicant or its business;
(d)Passing off the first respondent’s goods or business as and for the goods or business of the applicant by use of the name or trade mark “MINYMO” or any other name that is substantially identical or deceptively similar to the trade mark or is likely to mislead and deceive the public into the belief that the first respondent is connected with the applicant or its business.
(2)A declaration that the first respondent has, in trade or commerce, engaged in conduct which is misleading or deceptive, or is likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act.
(3)A declaration that the use by the first respondent whether by itself, its servants or agents or otherwise howsoever of the mark “MINYMO”, or any other sign or mark substantially identical with or deceptively similar to the trade mark, including the mark “TINY MINYMO”, in the course of trade in relation to:
(a)Goods in respect of which the trade mark is registered (the ‘registered goods’);
(b)Goods of the same description as the registered goods.
constitutes an infringement of the applicant’s rights in and to the trade mark.
(4)An order that the first respondent, by its proper officer, make, file and serve upon the applicant an affidavit verifying the number of goods upon which the mark “MINYMO” or any other name which is substantially identical or deceptively similar to “MINYMO”, including the mark “TINY MINYMO”, has been used and identifying and quantifying all printed and electronic matter referring to such goods, which bear the mark “MINYMO” or any other name which is substantially identical or deceptively similar to “MINYMO”, including the mark “TINY MINYMO” and which are in the first respondent’s possession, custody or power, and that the first respondent thereafter deliver to the applicant the said goods and printed matter for destruction.
(5)Damages (including equitable damages or compensation in equity):-
(a)For infringement of the trade mark; and
(b)For passing off.
(6)Alternatively to the relief sought in paragraph 5. (at the applicant’s election) an account of profits and an order for payment by the first respondent to the applicant of said profits.
(7)Damages and compensation pursuant to section 82 and/or 87 of the Trade Practices Act.
(8)All necessary accounts or inquiries as to damages and profits.
Before the Court proceedings were commenced the applicant had written a letter of demand to the first respondent. After that letter of demand was sent, but before Court proceedings were commenced, the first respondent applied, on 18 and 19 September 2008, for the registration in Australia of two trademarks: MINYMO and LONVIG BY MINYMO.
The applications were accepted for registration on 27 November 2008 and 5 December 2008 respectively and were advertised for opposition on 11 December 2008 and 22 January 2009 respectively. On 20 February 2009 the second and third respondents filed opposition proceedings in the office of the Registrar of Trade Marks, opposing the registration of the two trade marks by the first respondent.
This Court is required to decide whether to allow proceedings in this Court to continue, or to stay these Court proceedings pending the determination of the opposition proceedings.
Both counsel referred to the decision of Sundberg J in Vulcan Australia Ltd v ML D’Astoli & Co Pty Ltd (1995) 32 IPR 25 as setting out the factors that should guide this Court is deciding whether to exercise its discretion to grant a stay.
From his Honour’s reasons I accept that although the applicant in this case has a prima facie right to pursue its infringement proceeding, the first respondent can apply for a stay until the trade mark application has been decided. The test is whether the interests of justice so require.
The headnote in Vulcan accurately reflects that Sundberg J held that the following factors were relevant to the exercise of the discretion as to whether to grant a stay:
a)The extent of the delay which will be caused to the infringement proceedings if the stay were granted;
b)Whether the party applying for the stay is in control of the trade mark application;
c)Whether the party applying for the stay will continue the alleged infringing conduct during the currency of any stay;
d)Whether there are other allegations involved, such as passing off, in the infringement proceeding in addition to the alleged trade mark infringement;
e)Whether the applicant for the stay will be entitled to rely on the trade mark registration that may eventually be secured to defend the infringement proceedings.
In the Court proceedings, the applicant experienced some delay in effecting service on the first respondent, which is a corporation with its registered office in Denmark. On 26 March 2009 orders were made facilitating service on the first respondent.
The first respondent appeared on 28 May 2009.
On 29 May directions were made including:
(1)That any application for a stay of the proceedings or for security for costs be brought by the first respondent together with any affidavit evidence in support of that application be filed and served by 4.00pm on 12 June 2009.
The first respondent sought a stay of these proceedings on 25 June 2009. That application was dismissed. At that stage I thought the application was premature. I made directions for the delivery of pleadings, requests for and provision of particulars and for the exchange of categories of documents required for disclosure. The matter was adjourned for further review in October.
At the time of the first stay application the second and third respondents had only recently delivered their evidence in the opposition proceedings. The first respondent had until 20 August 2009 to put on its evidence. The lawyers and trade mark attorneys for the parties differed in their estimates as to when the opposition proceedings would be offered a hearing date, and when a decision could be expected.
By the time the second stay application was heard, the first respondent had delivered its evidence in the opposition proceedings, albeit a couple of weeks behind schedule. The second and third respondents had until 20 November to file any evidence in reply. It was then expected that a hearing could not be offered much before mid 2010 and a decision could not be expected much before the end of 2010.
This Court is able to offer the parties a final hearing in April 2010. Therefore, if these proceedings are stayed until the opposition proceedings are determined, there will be a delay of at least six months in the determination of the Court action. That delay is not excessive.
The question of who is in control of the opposition proceedings is an interesting one. The second and third respondents are challenging the registration of the trade marks and were required to put on their evidence first. They are the natural persons behind the applicant in the court proceedings. It is sufficient to observe that all parties to the opposition proceedings are parties to the court proceedings, and have expressed a willingness to expeditiously conclude the opposition proceedings.
However, it is important to note that the applicant in the court proceedings is not a party to the opposition proceedings. It is accepted that the decision of the Registrar would not operate as an issue estoppel in the Court proceedings. It is common ground that the first respondent intends to continue with its conduct of selling apparel in Australia whether or not a stay is granted. For its part, the first respondent submits that the applicant has not sought an injunction restraining it from doing so. The applicant submits that in seeking an injunction third party interests would be affected (the first respondent’s agents) and it would be required to give an undertaking as to damages. It submits that an expeditious trial in this Court is its preferred course. In the absence of an undertaking from the first respondent to cease the allegedly offending conduct, the effect of the grant of a stay would be to potentially cause the applicant substantial further loss in the additional period of time that would be involved from the conclusion of the opposition proceedings until the determination of the proceedings in this Court. In his affidavit the second respondent deposes:
“7. I am concerned that this proposed huge influx of products into the market bearing the first respondent’s marks will cause to aggravate the confusion already present and will cause irreparable damage to the applicant’s business and reputation, the scope of which cannot presently be accurately estimated.
8. Accordingly, I am concerned that if the first respondent is successful in obtaining a stay of this infringement proceeding in favour of opposition proceedings which will likely not be resolved until 2010, the applicant will sustain such a high degree of damage, including to its reputation, by reason of the confusion and likely future confusion referred to herein. This may have the effect of effectively frustrating this infringement proceeding, regardless of the outcome of the opposition proceedings. That is especially so, in circumstances where the applicant has refused to provide any undertakings not to continue selling and distributing in Australia its products bearing the offending marks, if this proceeding is stayed.”
There are other allegations in the Court proceedings beyond those that are made in the opposition proceedings, although it must be accepted that in respect of the trade mark issues there is a considerable degree of overlap.
Included in the grounds of opposition in each of the opposition proceedings are the following:
2(g) The Opposed Trade Mark should not be registered in relation to the Goods having regard to the provisions of Section 44 of the Trade Marks Act 1995 because it is substantially identical with, and/or deceptively similar to, one or more trade marks for the same goods, similar goods, and/or services closely related to the goods, and the priority date for registration of the Opposed Trade Mark is not earlier than the respective priority dates for registration of the other trade marks, including trade mark registration 809661.
2(h) The Opposed Trade Mark was accepted under the provisions of subsection 44(4) of the Trade Marks Act 1995 or a similar provision, notwithstanding an application or registration of a substantially identical or deceptively similar trade mark (“the similar trade mark”) of earlier priority, and the owner of the similar trade mark or the owner’s predecessor in title:
(a) first used the similar trade mark in respect of similar goods or closely related services before the applicant or the applicant’s predecessor in title first used the Opposed Trade Mark; and
(b) has continuously used the similar trade mark in respect of those goods or services since that first use.
2(i) At least one other trade mark had, before the priority date for the Opposed Trade Mark, acquired a reputation in Australia, and because of the reputation of the other trade mark(s), the use of the Opposed Trade Mark would be likely to deceive or cause confusion, contrary to Section 60 of the Trade Marks Act 1995. The other trade mark(s) include the trade mark EENI MEENI MIINI MOH in which the Opponent has acquired a reputation.
However, as counsel for the applicant submitted there is not a complete coincidence in the issues being debated in the two fora. In the court proceedings, issue is taken with the use by the first respondent of the mark TINY MINYMOH. There is no application by the first respondent for a registration of that mark.
In Vulcan the success in the opposition proceedings would have provided a complete defence to the proceedings. That is not the case in the present matter. Although, if successful in the opposition proceedings, the first respondent will have its trademarks registered from 18 and 19 September 2008, the applicant’s pleaded breaches pre-date that protection. In the Statement of Claim at paragraph 4(c) it is alleged that the first respondent engaged in infringing or unlawful conduct from at least August 2008. It was said that until discovery the applicant could not give full particulars of the earliest acts of infringement, so the breaches may extend back further in time.
Thus, on the factors adverted to by Sundberg J, the balance favours refusing a stay.
In addition, in my view, when one has regard to the overarching test for the grant of a stay, namely the interests of justice, a stay is not warranted.
A stay is frequently sought where a party is exposed to a multiplicity of proceedings, with attendant costs, and where there is a risk of inconsistent findings in the two sets of proceedings.
Here there are two actions, but they can be efficiently progressed without the need to stay one or the other. In the Court proceedings, pleadings have effectively closed. Evidence at a final hearing would be on affidavit. In the opposition proceedings the parties will prepare statutory declarations of the evidence upon which they rely. Subject to some possible refinement to accord with the rules of evidence, there is no reason why the evidence prepared for the opposition proceedings cannot be used in the affidavits in this Court. Of course, because the issues in this court go further than in the opposition proceedings some further evidence will be required but that is not an example of duplication of resources. It is additional work that would have to be done in any event.
It is accepted by counsel for the first respondent that even if the first respondent is successful in the opposition proceedings, there would still be issues left to litigate in this Court regarding the passing off and Trade Practices Act causes of action.

There was considerable attention paid during submissions to the issue of whether any decision of the Registrar would be binding or persuasive on this Court, and whether any decision of this Court would be binding or persuasive on the Registrar. In Unilever Plc v Cadbury Ltd (2001) 54 IPR 537 at [21] it was said that there was no preference in the Court having the opinion of the Registrar before deciding its own proceedings.
The applicant submitted that where there is a pending Court proceeding of direct relevance to a matter before the Registrar, the Registrar prefers the Court proceeding to be concluded before determining the opposition. That may be so, but as Finkelstein J made clear in Cadbury UK Ltd v Registrar of Trade Marks (2008) FCA 1126 the Registrar cannot refuse to deal with a matter on the basis that it is the subject of court proceedings.
However, in this case, if the Court proceeding continues and is heard in April 2010, a decision will be available to the parties before any hearing of the opposition proceedings. In that way, the Registrar can make whatever use of the decision that he thinks appropriate.
It would obviously be of assistance to the Registrar to have the benefit of this Court’s determination of the issues concerning the trademarks and their infringement (see, for example, Outrigger Hotels Hawaii v Evangelista Pty Ltd (2000) 49 IPR 164 at 172-3). That is particularly so where in each opposition proceeding ss.42 and 60 Trade Marks Act 1995 are relied on.
It was accepted by counsel for the first respondent that the quality of evidence available to the Court will be better than that available to the Registrar. Further, before the Registrar there is unlikely to be cross examination of witnesses.
In those circumstances, it seems to me that there is real utility in the Court determining its proceedings in advance of the opposition proceedings. It follows that I am not persuaded that a stay of the Court proceedings is in the interests of justice.
These proceedings will be set down for final hearing, and directions will be made to facilitate that occurring in April 2010.
It will be a matter for the applicant (or, more properly, the second and third respondents) whether they wish to seek a stay of the opposition proceedings, although, with the time lines that have been given, that may not be necessary as a matter of practicality.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of Wilson FM

Associate: Lynnette Chin

Date: 22 January 2010