Federal Circuit Court of Australia
Otter Products, LLC v Haydon [2021] FCCA 2012
File number(s): MLG 1326 of 2021 Judgment of: JUDGE BAIRD Date of judgment: 17 August 2021 and
Corrigendum 15 September 2021Catchwords: INTELLECTUAL PROPERTY – trade marks - infringement – summary judgment – infringement of five Australian registered trade marks – non-compliance with Court orders – where Respondent has participated in proceeding intermittently – where Respondent has no reasonable prospect of successfully defending the claim – where Respondent continued selling products bearing infringing trade marks after notice – inquiry ordered for compensatory damages – Respondent’s conduct is such justify an award of additional damages – Court gives summary judgment. Legislation: Federal Circuit Court of Australia Act 1999 (Cth) ss 17A, 77
Federal Circuit Court Rules 2001 (Cth) r 13.07
Trade Marks Act 1995 (Cth) ss 7, 9, 20, 120, 126
Cases cited: CPL Notting Hill Pty Ltd v Microsoft Corporation (No 2) [2019] FCA 223
Ellis v Wadjemup Trading Pty Ltd ATF Wadjemup Unit Trust Trading As Rottnest Express & Ors (No.3) [2018] FCCA 3075
Henley Arch Pty Ltd v Del Monaco [2019] FCCA 3848
Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60, [2008] 167 FCR 372
PositiveG Investments Pty Ltd as Trustee for the PositiveG Trust v Li [2020] FCCA 2548
Ritter & Ritter & Anor [2019] FCCA 782
Shell Co of Australia Ltd v Esso Standard Oil (Australia Ltd) (1963) 109 CLR 407
Number of paragraphs: 62 Date of last submission/s: 17 August 2021 Date of hearing: 17 August 2021 Place: Sydney Solicitor for the Applicant: Stephen Marcus Stern, Corrs Chambers Westgarth Respondent: Peter Haydon ORDERS
MLG1326 of 2021 BETWEEN: OTTER PRODUCTS, LLC
Applicant
AND: PETER HAYDON
Respondent
order made by:
JUDGE BAIRD
DATE OF ORDER:
17 AUGUST 2021
THE COURT NOTES THAT:
These orders have been amended pursuant to r 17.05(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2001 (Cth) on 15 September 2021.
THE COURT:
1.ORDERS the Respondent be restrained, whether by himself or by his employees or agents, from infringing any of the Otter Products Trade Marks (as depicted in the Schedule to this order) by using any of them or any name(s), word(s), mark(s), sign(s) or device(s) which are substantially identical with or deceptively similar to any of the Otter Products Trade Marks in the course of trade on or in relation to:
(a)any of the goods in respect of which the Otter Products Trade Marks are respectively registered as set out in the Schedule (Otter Products Registered Goods);
(b)(b) goods of the same description as any of the Otter Products Registered Goods; or
(c)(c) services that are closely related to any of the Otter Products Registered Goods,
not manufactured or provided by or under the licence or authority of the applicant, Otter Products, LLC, or otherwise procuring or inducing any other person to do any of the acts specified in this paragraph…
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Details
- Case
- [2021] FCCA 2012
- Decision Date
CaseChat Overview and Summary
In the Federal Circuit and Family Court of Australia, Justice Baird considered an application by Otter Products, LLC for summary judgment against Mr Haydon concerning alleged infringement of five Australian registered trade marks. Otter Products claimed that Mr Haydon had sold mobile phone cases bearing its trade marks without authorisation. Evidence presented included trap purchases from Mr Haydon's stores, affidavits from individuals involved in these purchases, and an affidavit from Otter Products' brand protection manager, who identified indicators of infringement and confirmed that the trade marks on the purchased products were not applied by or with the licence of Otter Products.
The court was required to determine whether Mr Haydon had any reasonable prospect of successfully defending the trade mark infringement claim. This involved assessing whether the evidence established that the products sold by Mr Haydon were not genuine Otter Products and that their sale constituted infringement under section 120(1) of the *Trade Marks Act*. Furthermore, the court needed to consider whether Mr Haydon's conduct warranted an award of additional damages under section 126(2) of the Act, particularly in light of his continued sales after receiving letters of demand and an alleged admission of selling counterfeit products.
Justice Baird applied the principles governing summary judgment, which require the court to be satisfied that the respondent has no reasonable prospect of successfully defending the proceeding. This standard is met if the defence is not hopeless or bound to fail, and the court must make a practical judgment as to whether the respondent has more than a fanciful prospect of success. The court found that the evidence, including the trap purchases and the expert opinion on the authenticity of the trade marks, demonstrated that the products sold by Mr Haydon were not licensed by Otter Products. The court also noted that Mr Haydon had participated in the proceeding intermittently and had continued selling the infringing products after being notified, even allegedly admitting to selling counterfeits. Given these factors and the lack of a filed defence, the court was satisfied that Mr Haydon had no reasonable prospect of successfully defending the claim.
Consequently, the court granted summary judgment in favour of Otter Products. An inquiry was ordered to assess compensatory damages, and the court indicated that an award of additional damages would be made under section 126(2) of the *Trade Marks Act* due to the flagrancy of the infringement and Mr Haydon's conduct after being informed of the infringement.
The court was required to determine whether Mr Haydon had any reasonable prospect of successfully defending the trade mark infringement claim. This involved assessing whether the evidence established that the products sold by Mr Haydon were not genuine Otter Products and that their sale constituted infringement under section 120(1) of the *Trade Marks Act*. Furthermore, the court needed to consider whether Mr Haydon's conduct warranted an award of additional damages under section 126(2) of the Act, particularly in light of his continued sales after receiving letters of demand and an alleged admission of selling counterfeit products.
Justice Baird applied the principles governing summary judgment, which require the court to be satisfied that the respondent has no reasonable prospect of successfully defending the proceeding. This standard is met if the defence is not hopeless or bound to fail, and the court must make a practical judgment as to whether the respondent has more than a fanciful prospect of success. The court found that the evidence, including the trap purchases and the expert opinion on the authenticity of the trade marks, demonstrated that the products sold by Mr Haydon were not licensed by Otter Products. The court also noted that Mr Haydon had participated in the proceeding intermittently and had continued selling the infringing products after being notified, even allegedly admitting to selling counterfeits. Given these factors and the lack of a filed defence, the court was satisfied that Mr Haydon had no reasonable prospect of successfully defending the claim.
Consequently, the court granted summary judgment in favour of Otter Products. An inquiry was ordered to assess compensatory damages, and the court indicated that an award of additional damages would be made under section 126(2) of the *Trade Marks Act* due to the flagrancy of the infringement and Mr Haydon's conduct after being informed of the infringement.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
In short, the relief includes injunctions, at the option of the plaintiff damages or an account of profits, and where damages are awarded, an additional amount having regard to the flagrancy of the infringement, the need to deter similar infringements of registered trade marks and the conduct of the party that infringed the registered trade mark that occurred after the act constituting the infringement or after the party was informed that it had allegedly infringed the registered trade mark.Evidence on the summary judgment application and Consideration In respect of the allegedly infringing products there are in evidence before me trap purchases of examples of the products that were being sold by Mr Haydon through each of his stores at Booval, Capalaba and Toowong. In relation to these products, images of the products that have been purchased are in evidence, and, as I have already said, by its statement of claim Otter Products claims that Mr Haydon has infringed each of the Otter Products Trade Marks as set out in s 120(1) of the TM Act. Trap purchases were undertaken by Mr Adam Williams and Mr Francis McCarthy on behalf of Otter Products of mobile phone cases sold by Mr Haydon from his Capalaba store since at least 21 April 2021, from his Booval store since at least 5 June 2021, and from Mr Haydon’s Toowong store since at least 7 June 2021. Affidavits made by Mr Williams and Mr McCarthy are in evidence before me today. The evidence also shows that sales continued at least up until 20 July 2021. Copies of the photographs of the purchases made by Mr Williams and Mr McCarthy in evidence were also sent to Otter Product’s brand protection manager, Mr John McKinney, who is resident in Colorado, USA. Mr McKinney has made an affidavit read today, and emails have been tendered in evidence that:(a)Mr McKinney is experienced by extensive training and his work over the last decade, to be able to identify a wide range of indicators that identify products which are infringing the Otter Products Trade Marks. That is, he can distinguish between genuine products bearing the Otter Products Trade Marks and counterfeits;(b)during the 11 years spent with Otter Products as a brand protection manager he has reviewed thousands of what he describes as counterfeit “OtterBox” products for authentication purposes; and (c)Mr McKinney has inspected the photographs of the purchases by Mr Williams and Mr McCarthy from Mr Haydon’s retail stores of mobile phone cases bearing one or more of the Otter Products Trade Marks, and he gives evidence of respects in which each of the products has labels that have not been applied by or with the licence of Otter Products. I am satisfied that the products purchased on behalf of Otter Products from Booval, Capalaba and Toowong stores operated by Mr Haydon were not products and packaging to which Otter Products Trade Marks were applied by or with the licence or authority of Otter Products. That is, the trade marks there purporting to be Otter Products Trade Marks were applied without the licence or authority of the owner of the trade marks, Otter Products.
Decision
Reasons for decision
Otter Products further claims that the conduct of Mr Haydon is such as to entitle Otter Products to an order for additional damages under s 126(2) of the TM Act, and particularises that, notwithstanding a letter of demand being delivered by hand to Mr Haydon at the Capalaba store on 27 May 2021, and a second letter of demand being sent via mail on about 2 June 2021, Mr Haydon failed to stop marketing and selling the products after being informed of his infringement and, further, that on 27 May 2021 Mr Haydon admitted to the agent of Otter Products in words to the effect, “I know these products are counterfeit”. I note that today in Court Mr Haydon has denied that he said those words.Summary judgment principles The principles guiding the exercise of summary judgment have been set out in a number of cases, including Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; [2008] 167 FCR 372 at [124] to [132], and in this Court are conveniently summarised in, inter alia, Ritter & Ritter & Anor [2019] FCCA 782 at [4] to [13] by Judge Obradovic, and also by Judge Lucev in Ellis v Wadjemup Trading Pty Ltd ATF Wadjemup Unit Trust Trading As Rottnest Express & Ors (No.3) [2018] FCCA 3075 at [2] to [11]. I have referred to those principles in PositiveG Investments Pty Ltd as Trustee for the PositiveG Trust v Li [2020] FCCA 2548 at [19] to [24] in the context of infringement of intellectual property rights, as follows (emphasis in original):[19]Section 17A of the Act empowers the Court to give judgment for one party against another party, as I have said, in relation to any part of a proceeding if the Court is satisfied that, in this case, the Respondent party has no reasonable prospect of successfully defending the proceeding. [20]Although there is no defence filed in this proceeding, I note that section 17A(3) of the Act provides that a defence need not be hopeless or bound to fail for it to have no reasonable prospect of success. [21]The provisions of the Act are in the same terms as s.31A of the Federal Court of Australia Act 1976 (Cth), and the approach taken in cases concerned with that section are generally seen as apposite to s.17A of the Act. [22]In sum, these principles relevantly provide:(a)the test is less stringent than applicable under earlier regimes. The power to order summary judgment should, however, be exercised with caution; (b)the assessment of reasonable prospects involves identifying the pleaded cause of action, including the pleaded facts, and any supporting evidence together with the facts, if any, pleaded; (c)the moving party bears the onus of persuading the Court that the Respondent has no reasonable prospects of success; and (d)the exercise of the power requires a practical judgment by the Court as to whether, in this case, the Respondent, has more than a fanciful prospect of success. This may be a judgment of law or of fact or of mixed law and fact. [23]The concept of “no reasonable prospect of success” is a different concept to “no real prospect of success” and encompasses defences that need not be hopeless or bound to fail. The inquiry is directed to whether there is no reasonable prospect of defending the proceeding, not an inquiry directed to whether a certain concluded determination should be made that the defence would necessarily fail. [24]Further, in discerning whether a real issue of fact exists such as to preclude summary judgment, the Court must draw all reasonable inferences in favour of the non-moving party. I note also, in Jefferson Ford, Gordon J’s observation that the word “may” in “the Court may give summary judgment” is used in an empowering sense rather than as denoting the exercise of a discretion, c.f. Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401 at [28]-[31]; Nichol v Discovery Africa Ltd; Van Den Bergh v Discovery Africa Ltd [2016] FCAFC 182; (2016) ALR 594.
Ratio Decidendi
Legal Principle Established
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