Paramount Pictures Corp v Starwon Enterprises Pty Ltd & Ors

[1998] FCA 1054

PARAMOUNT PICTURES CORPORATION v. STARWON ENTERPRISES PTY LTD, GRAEME ROSS CHINNERY, HERIBERT HERMANN ORTHEIL, BRIAN STRANGWAYS YOUNG, DAVID CRAIG KNOWLES and GEOFFREY WILLIAM DURKIN
No. NG 551 of 1998
FED No. 1054/98
Number of pages - 5

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

EMMETT J

SYDNEY, 28 July 1998 (hearing and decision)

#DATE 28:7:1998

Counsel for the Applicant: S.J. Goddard

Solicitor for the Applicant: Sprusons Solicitors

Counsel for the Respondent: J.R. Baird

Solicitor for the Respondent: Davies Collison Cave

THE COURT DIRECTS THAT:

(1) The respondents file and serve no later than 1 September 1998 defences and any cross-claim.

(2) The applicant file and serve no later than 22 September 1998 any reply and any defence to any cross-claims.

(3) The parties file and serve no later than 27 October 1998 lists of documents.

THE COURT ORDERS THAT:

(4) The applicant provide security in the sum of $15,000 in a manner satisfactory to the Registrar forthwith.

(5) The applicant furnish security in the further sum of $15,000 in a manner satisfactory to the Registrar no later than 22 September 1998.

(6) The notice of motion of 22 July 1998 be stood over to 30 October 1998 and that 30 October 1998 be appointed for further directions in the proceedings.

(7) Costs of the motion to date be reserved.

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

EMMETT J

I have before me a notice of motion brought by the respondents seeking first an order that the applicant provide security for the respondents' costs and secondly that the proceedings be transferred to the Western Australia District Registry of the Court. Paramount Pictures Corporation ("the Applicant") seeks orders restraining the respondents from infringing registered trademarks and restraining the respondents from advertising, promoting, selling, displaying for sale, offering to supply or supplying any Internet services under or by reference to any business name including the words "Star Trek". The mark alleged to be infringed is the mark "Star Trek" which is registered in classes 9, 14, 16, 21, 24, 25, 28, 38, 41 and 42.

The first respondent ("Starwon") is alleged to carry on the business of supplying Internet services under its name "Starwon". The second to the sixth respondents are directors of Starwon and they have been joined in order to answer allegations that they have aided, abetted, counselled and procured both infringement of the trademarks and alleged contravention of sections 52 and 53 of the Trade Practices Act 1974 (Cth) ("the Act").

The evidence before me indicates that the Applicant is incorporated in the State of Delaware in the United States of America. There is no evidence that it has any assets in Australia. However, there is some evidence to suggest that companies which may be connected with it are incorporated in Australia.

Starwon carries on business at Nedlands in Western Australia. The particulars of infringement alleged against Starwon are as follows:

(a) registering the business name "Star Trek Net Services" in respect of a business described as "Internet provider";

(b) the use of signage including the words "Star Trek" at Starwon's premises located in Nedlands;

(c) the use of advertising and promotional material including the words "Star Trek" at Starwon's premises in Nedlands;

(d) the use by Starwon of the words "Star Trek" in connection with the supply of and offering to supply Internet services;

(e) the use by Starwon of the words "Star Trek" at the first respondent's Web site located at in connection with the supply of and offering to supply a fast access Internet service to certain Web sites of the Applicant.

It is also asserted that further particulars will be provided after discovery.

Insofar as it is possible to identify a location at which any rights of the Applicant have been infringed, if they have been, by Starwon, that location is clearly Western Australia. All of the individual respondents are resident in or around Perth. In its title page on the Internet, Starwon emphasises its connection with Western Australia. For example, its Internet title page includes the following:

At Starwon we offer the full range of Internet services - and are one of the strongest Internet service providers in Western Australia. Our system has less down time than most of the other Internet providers in Western Australia. Starwon Internet was established at the beginning of 1995 to cater to the Internet needs of business and individual users in the Perth metropolitan area. We are one of the fastest growing Internet service providers in Western Australia. At Starwon we understand the needs of small business. Wholly WA owned and operated - we are able to supply all your corporate and personal Internet needs.

On the other hand, the Applicant alleges that it has developed a substantial goodwill and reputation in the trademarks in question in Australia and worldwide. The evidence before me indicates that the goodwill which has been established in the trademarks arises from activities of at least four companies in Australia. They are as follows:

* Paramount Pictures Australia Pty Limited ("PPA"), which has its registered office and principal place of business in Miller Street, North Sydney, New South Wales. It has no other offices in Australia. PPA is responsible for the sale and distribution of eight Star Trek motion pictures which have been distributed in cinemas, on video and broadcast on television in Australia.

* United International Pictures Pty ("UIP") which has its principal place of business at Clarence Street, Sydney. UIP has been responsible for theatrical box office distribution in Australia of those motion pictures.

* CIC Video Australia Pty ("CIC") which has its registered office and principal office at Frenchs Forest, New South Wales. CIC is responsible for video sales and the distribution in Australia of the motion pictures and of the television series which was broadcast under the name Star Trek.

* Southern Star Group Pty Limited ("Southern Star") which is located in West Street, North Sydney, New South Wales. Southern Star has been licensed to manufacture, market, distribute and sell merchandise relating to the television series and the motion pictures.

At this stage, it is difficult to determine with any certainty who the actual witnesses in the proceedings are likely to be. However, it is asserted on behalf of the Applicant that potential witnesses in the proceedings would include officers of PPA, UIP and CIC, all of whom are resident in Sydney. The books and records of those companies are all in New South Wales and it may well be that substantial access to those records will be necessary in connection with the proof by the Applicant of the goodwill and reputation which it alleges in relation to the name and mark "Star Trek".

The application for security and for transfer to the Western Australian Registry have been brought promptly. No complaint can be made in that regard except perhaps that it has been brought too promptly because it makes the Court's task more difficult in assessing where the merits lie in terms of the management of the case.

The proper place of the proceedings as provided for in the rules is presently Sydney. Prima facie, therefore, Sydney will be the place of trial. However, the Court has a discretion as to whether or not the proper place is the venue for trial. This Court, of course, prides itself on its national character and it is highly desirable that it maintain its flexibility and capacity to deal with proceedings commenced in it on that assumption.

Further, the current arrangements of the Court will normally lead to the conclusion that the judge responsible for the management of a case will be the trial judge. To that extent there maybe some tension between the provisions of the rules which permit a judge to determine that a trial take place other than the proper place. That tension, of course, is really only a cost question. There is no reason why a judge who manages a case in Sydney could not, in an appropriate case, decide either to take evidence in Perth or to direct that the whole of the trial take place in Perth.

In deciding whether to change the proper place, the Court must engage in a balancing exercise. Residence of parties and of witnesses, expense to parties, the place where the cause of action arose and the convenience of the Court are some of the factors that may be relevant in particular circumstances. However, the Court must be satisfied, after considering all relevant matters, that there is a sound reason to direct that the proceedings be conducted or continued otherwise than at the place where an applicant has commenced them.

The starting point is that the proceedings have been commenced at a particular place and the question is why that place should be changed. Of course, if the party who commenced the proceedings chose that place capriciously, the Court would have no hesitation in looking to the interests of the respondent. That suggestion is not made in this case. It is clear that to the extent that the Applicant has representatives in Australia, those representatives are the companies to which I have referred. The commencement of the proceedings in the New South Wales Registry was, therefore, justified.

On the other hand, for the reasons I have briefly indicated above, the proceedings appear to have a more specific and direct connection with Western Australia than they do with Sydney. That impression, however, is at this stage no more than an impression and it may be that when the issues have been formulated at the close of pleadings it will be apparent that the real issues do not necessarily involve circumstances limited to Western Australia. My present inclination is that there is a balance of convenience which would favour removal of the proceedings to Western Australia.

However, I do not yet, in the absence of a defence, have a sufficiently developed understanding of the issues. Accordingly, I propose to give directions for pleadings and for the preparation of lists of documents. When those steps have been taken I should be in a much better position to judge whether the balance of convenience would favour transfer to Western Australia or whether the presumption in favour of the Applicant's desired course would prevail.

In relation to security I have conflicting evidence which has not been tested by cross-examination. On the one hand, I have an estimate by an experienced solicitor for the respondents that costs up to and including inspection of documents would be in the vicinity of $40,000. I also have a sworn estimate on behalf of the Applicant that the costs of proceedings until the stage of preparation of discovery are not likely to exceed $15,000. No more detailed information as to the basis of either estimate is before me. I do not intend to be critical by making that observation but it really is a matter of guess work on my part in determining what is an appropriate order for security.

I am satisfied that there ought to be an order for security since the Applicant has no presence in Australia on the evidence available to me. It has been suggested that PPA might give an undertaking to meet any order for costs. However, at this stage no formal undertaking has been given. If the parties were able to reach some understanding in that regard that would be a matter for them. However, in the absence of any such satisfactory arrangement I consider that it would be appropriate to order the provision forthwith of security in the sum of $15,000 in a form satisfactory to the Registrar, such security to be provided forthwith. I propose to direct that security in a further sum of $15,000 be provided in a form satisfactory to the Registrar following the close of pleadings. I propose to stand over the motion part heard until after the pleadings are closed and lists of documents have been prepared. At that stage I should be in a better position to decide what further security, if any, should be given at that stage and whether to accede to the respondents' application for the proceedings to be transferred to the Western Australia Registry.