Polyaire Pty Ltd v K-Aire Pty Ltd & Ors

[2005] HCATrans 64

[2005] HCATrans 064

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A51 of 2004

B e t w e e n -

POLYAIRE PTY LTD

Appellant

and

K-AIRE PTY LTD

First Respondent

KEMALEX PTY LTD

Second Respondent

RICHARD KEMPLEY COLEBATCH

Third Respondent

BRUCE VICTOR BENFIELD

Fourth Respondent

K-AIRE SALES PTY LTD

Fifth Respondent

K-AIRE WHOLESALE PTY LTD

Sixth Respondent

CONNECT AIRE PTY LTD

Seventh Respondent

T & S MANUFACTURING PTY LTD

Eighth Respondent

ACN 079 795 814 PTY LTD

Ninth Respondent

McHUGH J
GUMMOW J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 1 MARCH 2005, AT 10.17 AM

Copyright in the High Court of Australia

MR D.M. YATES, SC:   May it please the Court, I appear with my learned friend, MR B.J. JENNER, for the appellant.  (instructed by Lynch Meyer)

MR D.K. CATTERNS, QC:   May it please the Court, I appear with my learned friend, MS S.J. GODDARD, for the respondents.  (instructed by Thomson Playford)

McHUGH J:   Yes, Mr Yates.

MR YATES:   Your Honours, the principal issue in this appeal concerns the minimum requirements necessary to make out a fraudulent imitation for the purposes of section 30 of the Designs Act 1906 (Cth). Specifically, is it sufficient in order to establish fraudulent imitation that the defendant knowingly, consciously or deliberately bases his or her design on the registered design with either knowledge of the fact of registration or reason to suspect that the design is registered, and that the accused design is an imitation of the registered design in the sense that it has taken the overall distinctive appearance of the registered design, or is it necessary to go further and establish as well that the differences between the accused design and the registered design were made dishonestly to conceal the fact that the registered design was being used by the designer of the accused article.

Your Honours, the appellant submits that it is not necessary to establish dishonest concealment, although dishonest concealment may be an element of fraud in the circumstances of the given case.  The appellant ‑ ‑ ‑

McHUGH J:   Ordinarily, “fraud” means to deprive by deceit.

MR YATES:   Yes, your Honour.

McHUGH J:   Must not there be some concept of deceit involved in the notion of fraudulent imitation?

MR YATES:   The appellant would submit not, your Honour.  What seems to be the element of fraud is the conscious use of the registered design itself.  Now, your Honours, normally, because a monopoly right has been granted, it would not be necessary to prove an element of copying, and it certainly is not where the registered design is applied, or an obvious imitation of it is applied.

McHUGH J:   But fraud usually has its effect on the outsider.  On your view, fraudulent imitation is concerned with the state of mind of the infringer.

MR YATES:   Only to the extent that the registered design is being used by the infringer to come up with the design of the accused article.  But, your Honours, we would submit that the word “fraudulent” is used in a special sense in the Designs Act, certainly in a sense of conscious use, having been recognised in the early cases, in the UK line of cases, that dealt with this issue relatively shortly after the notion of fraudulent imitation was introduced in 1842 into the Designs Act (UK).

So that although perhaps in other settings, and in other contexts, “fraud” would connote dishonesty, here we submit it simply means no more than the conscious use of the registered design, taking into consideration, of course, the fact that the alleged infringer must either have knowledge of the registered design in terms of it having been registered or at least rights existing with respect to it.

McHUGH J:   You place weight on the dictum of Justice Manisty in the Sherwood and Cotton Case but is not that dictum against you in that His Lordship gave as an example:

having before your mind and before your eye the design of another and introducing into your design some differences in order, if possible, to avoid coming within the Act of Parliament.

MR YATES:   Yes, your Honour, but that would cover the situation, we submit, of someone who is simply seeking to avoid the consequence of infringement by coming up with a design that looks different to the registered design, but that would not of necessity carry with it an intention to conceal the fact of copying.  In other words, the alleged infringer could be acting perfectly honestly in the sense of endeavouring to come up with a design which is not, in all the circumstances, an imitation but being unsuccessful in that attempt.  We would submit that that is what his Honour had in mind when referring to it in Sherwood.

GUMMOW J:   What is the actual section we are construing?

MR YATES: Section 30, your Honour. It is sufficient, I think, for our purposes, your Honours, to simply look at section 30(1)(a). There your Honours will see that infringement is made out in one of three cases, either the design or a fraudulent or an obvious imitation of it has been applied.

GUMMOW J:   With an application of “the design” per se, what is the mental element?

MR YATES:   No mental element, your Honour, and, similarly, there is no mental element with respect to obvious imitation.  So that the matter which stands fraudulent imitation apart from both obvious imitation or application of the design itself, we submit, is the element of the conscious use of the registered design, regardless of whether or not the designer is actuated by any dishonesty to conceal.  Your Honours, we submit that that concept of fraud is certainly well understood and articulated in the English cases, and certainly ‑ ‑ ‑

GUMMOW J:   You say it was understood before 1906?

MR YATES:   Indeed, your Honour.

GUMMOW J:   That is the understanding on which the section was put in in 1906?

MR YATES:   That is so, your Honour.  There is no indication in the terms of the Australian Act that the Australian Parliament intended to import any concept other than the one that had been articulated and well understood in the United Kingdom by that time, and which thereafter continued to be applied up until the Designs Act (UK) was amended in 1949, to remove the concepts of obvious and fraudulent imitation.

GUMMOW J:   How compelling then are the pre-1906 UK cases?

MR YATES:   Well, your Honours, we submit that they are compelling and we would submit that they all speak with really one voice.  The earliest decision that we have been able to find is that of Barran v Lomas (1880) WR XXVIII 973, which has been reproduced in the supplementary materials.  In that case the Master of the Rolls, Sir George Jessel, gave “fraudulent” a particular and specific meaning, namely that it was a conscious use of the registered design.  If your Honours have the supplementary materials provided by the appellant, it is under tab 1, letter A.

This was a case involving designs applied to braid, the jackets.  The earlier United Kingdom legislation dealt specifically with matters of ornamentation, particularly to fabric.  At page 974 in the right-hand column in the last paragraph commencing on that column, his Lordship said:

I now come to the next words - “fraudulent imitation.”  As I understand it, the Act does not prohibit imitation.  The design itself being open to such great varieties, a fair imitation - that is to say, something to which the idea of the original design has been applied - is not prohibited.  To take an illustration from architecture, I suppose, though a man could not take either Teutonic capitals or the Greek capitals, the Act would not prevent his using the Composite capitals.

I pause there, your Honours.  I am not quite sure what his Lordship meant by that, I have to say myself, but the perhaps more compelling and relevant part of his Lordship’s reasons continue:

And therefore it seems to me that you must look at the thing itself to see if it is a fair imitation.  But that is not all.  The word “fraudulent” ought to have a definite meaning.  It must be something more than imitation.  As I understand it, the meaning is imitation with knowledge – that is, that the man who imitates has seen the first design.  It is not unconscious imitation which is said to be the greatest compliment you can pay to an artist or author, but conscious imitation, the man having the design before him, and knowingly and wilfully imitating, and that imitation being, as I said before, not sufficiently original to be protected as a fair imitation.

McHUGH J:   But that equates fraudulent with knowing.

MR YATES:   Yes, your Honour, but knowing ‑ ‑ ‑

McHUGH J:   So section 30 would simply be, “applies the design or any knowing or obvious imitation”. It does not seem to strike at the word “fraud” which is a much more difficult word, more pejorative.

MR YATES:   I would accept your Honour, that in isolation the word “fraud” does mean that, and of course there may be a variety of circumstances involving fraud in such a case, but the bottom line or the threshold requirement, we submit, is the actual knowing use of the design, regardless of the fact that fraud itself may have connotations in other contexts.

GUMMOW J:   That is borne out by the concluding words of Sir George Jessel’s judgment on 975:

I have no hesitation in saying that it is an imitation, and, not using the words of the Act offensively, a fraudulent imitation within the meaning of the Act.

MR YATES:   Yes, your Honour.

McHUGH J:   Sir George Jessel was a very great judge but in this case, as I think in every other one of his cases except one, he did not reserve.  He never reserved.  He might have been a master of equity, but here he was dealing with a novel statute and I am not sure that one would give his judgment the same weight in this field as one might in other fields.

MR YATES:   Your Honour, of course Barran v Lomas does not stand alone, it is not an island ‑ ‑ ‑

McHUGH J:   No, I know.

MR YATES:    ‑ ‑ ‑and there are the observations of Lord Justice Cotton in Grafton v Watson which was the next case in the series, and that is behind tab B, your Honours, under tab 1.  Although I accept of course that the circumstances of this case arose in an appeal from an application for an interlocutory injunction, nevertheless their Lordships did give some detailed consideration to the meaning of ‑ ‑ ‑

McHUGH J:   Well, subject to what your opponent says with the possible exception of what Justice Manisty said in the Sherwood Case, I think the authority prior to Malleys, do support your proposition.  Indeed, Mr Justice Parker in Pugh v Riley Cycle Company Ltd, who was a very great judge, again, he actually spoke about “fraudulently” in the sense of knowing ‑ ‑ ‑

MR YATES:   Yes, your Honour, and ‑ ‑ ‑

McHUGH J:   But when you come to Malleys you are in a different area.  It may be that the choice is, what are we to make of Malleys, is it not, given that ‑ ‑ ‑

MR YATES:   Can I take your Honours to Malleys now, I think to get directly to the point.  Before getting to Malleys in this Court, can I take your Honours firstly to the trial at first instance, the reasons at first instance of Mr Justice McLelland, because they do have some bearing on how your Honours, I submit, should look at the decision in the High Court.

Your Honours, the trial at first instance is reported as J.W. Tomlin Pty Ltd v Malleys Ltd (1960) 77 WN (NSW) 723. Your Honours know that this case concerned a design for what was referred to as the bottom of a toilet pan. The design itself covered a pan which had a domed section, around which there was an annular portion, and around the circumference of that was what was referred to as a “J” rim. The case concerned issues going to the registerability of the design, which we can pass over, but it is perhaps necessary to note some of the facts of the case which appear at page 724 of the report and, in particularly, in the right‑hand column. Can I just seek to summarise those facts, your Honours, without reading what is there said.

In substance, what had happened was that the plaintiff had sold these pans and had marked on the pans that a design application or a design registration was pending, and it began to sell those pans.  The defendant sought to satisfy the demands of one particular council, the Bankstown Council, by saying that a domed pan was not necessary, but was rebuffed on that, and as a consequence put out its own toilet pans which had a domed bottom.  That provoked a letter from the plaintiff’s patent attorneys, which drew attention to its pending design registration and demanded that the defendant cease the sale.  That led to other correspondence denying infringement, but then saying that it was only a trial quantity.  Thereafter, the design became registered and then another council placed an order upon the defendant for toilet pans with domed bottoms and they were supplied by the defendant.  The plaintiff, learning of those facts, then wrote again and then the matter proceeded to litigation. 

Your Honours, on the issue of infringement – and this consideration occurs at page 728 in the left‑hand column – the trial judge, having earlier set out the relevant facts, then said this, about 20 lines from the bottom in that left‑hand column:

The plaintiff first made pans with bottoms having an annular portion and a dome early in 1956, marked “DES RGN PND”.  The defendant, before making pans with an annular portion and a dome, had one of the plaintiff’s articles in its possession.  The first domed bottoms made by the defendant had no embossed cross upon them.

So they are the ones that went to the Bankstown Council, I interpolate –

On 19^th July, 1957, the defendant’s then patent attorney was informed that a certificate of registration had been obtained.  Towards the end of 1958 the defendant sold pans having bottoms with an annular portion and a dome.  These had indented upon them ‑ ‑ ‑

McHUGH J:   That certificate of registration, that is the plaintiff’s certificate, is it?

MR YATES:   It is, your Honour, yes, I am sorry. 

These had indented upon them a large cross.  The letter written by the defendant’s new patent attorneys on 5^th January, 1958, shows that the plaintiff’s registered design had been examined on behalf of the defendant an appreciable time before that date.  The person responsible for the production of the defendant’s design for the bottom of its pan was not called as a witness.  In the above circumstance I draw the inference that the defendant based its design on the plaintiff’s design and that the embossed cross was added with deliberation to make the appearance of the defendant’s article different from the plaintiff’s design.  No explanation of why the embossed cross was added was given by any witness called on behalf of the defendant.

Then his Honour held that it was not an obvious imitation, and then said:

but I do think that it is a fraudulent imitation within the meaning of s. 30.

Then he proceeded to set out the passage from Mr Justice Farwell in Dunlop Rubber.  Your Honours, that is a passage part of which we have set out in our written submissions.  It is an important passage, but may I leave it to your Honours to read that without my reading it out aloud.  That passage, we submit, clearly follows the other authority ‑ ‑ ‑

GUMMOW J:   What would be a deliberate intention to steal the property of the owner and the registered design?  What would that involve?

MR YATES:   I suspect, your Honours, that it involves an intention to copy nearly everything that one can copy.

GUMMOW J:   I mean, in these, the Bankstown Council and the Wyong Council wanted a particular product.  Because of the existence of the plaintiff’s registration, they could only be given what they wanted if it had a particular characteristic, and the defendant set about complying with that requirement.  The result would be a loss of business for the plaintiff, I suppose.

MR YATES:   It would, your Honour.  That would be an infraction upon the monopoly right.

GUMMOW J:   I would have thought so.

MR YATES:   Your Honours, importantly, at the left‑hand column on page 729, after finishing that particular quotation from the Gold Ball Developments Case, his Honour said:

In the present case I do not think that the defendant intended to be fraudulent, but I do think that the defendant’s design is an imitation which is based, and deliberately based, upon the registered design, and that the imitation was a fraudulent imitation within the meaning of the section.

So it is clear, we would submit, that Mr Justice McLelland was simply there talking about fraud being the conscious or deliberate use of the defendant’s design without any intention to conceal.

McHUGH J:   Well, it is a strange notion, an apparent contradiction, that you do not intend to be fraudulent, but you are fraudulent.

MR YATES:   Well, you are taken to be fraudulent, your Honour.

McHUGH J:   Sorry?

MR YATES:   You are taken to be fraudulent in the circumstances.  Now, may I just pause to submit that it would be difficult ‑ ‑ ‑

GUMMOW J:   How do you steal the property of the owner of a registered design?

MR YATES:   By infringing his monopoly, your Honour.

GUMMOW J:   Well, exactly.  That is what property is, is it not?

MR YATES:   Yes, your Honour.  Your Honours, it would be strange, having regard to Mr Justice McLelland’s findings of fact that, for example the embossed cross, was added to conceal the fact of copying, because the original pans that had been put out by the defendant, which had attracted the attention of the plaintiff in the first place, had no embossed cross on them.  So by putting the embossed cross on, one can see that there may have been an attempt to make the overall appearance and design of the toilet pan different, but it could hardly be said that it was being done to conceal the fact of copying, because if, in fact, there was infringement, the defendant had already been caught out before the cross was added.

HAYNE J:   But there is a certain niceness of distinction apparent at 728 column 2, in the last 10 or 12 lines of the quotation from Dunlop:

a person may be the author of a fraudulent imitation believing perfectly honestly that he has so altered the registered design as to make them two different designs ‑ ‑ ‑

MR YATES:   That is so, your Honour.

HAYNE J:   It is a niceness of distinction that I have succeeded in getting away with it.  It seems to capture.  It is a niceness not found elsewhere, I think.

MR YATES:   Yes.  Once again, your Honour, I think it is because what is involved is the infraction upon the monopoly of the design itself, and it is just sufficient for that purpose that, having used the registered design but having come up with what is in fact an imitation of it despite what one may have thought was avoiding that imitation, it is still nevertheless an infraction on monopoly and fraud within the section.

McHUGH J:   Unless there is overlapping between the two concepts, obvious imitation would only apply when you are oblivious of the design, because otherwise you would always ‑ ‑ ‑

MR YATES:   Certainly that is a distinction, your Honour.  That is one distinction, but this Court in Malleys v Tomlin recognised that where copying is involved there may be greater differences between the registered design and the accused article, yet nevertheless still an imitation.  That also seems to be the position under the UK line of authorities as well.  In other words, that the degree of correspondence does not have to be as exact for a fraudulent imitation as it would be for an obvious imitation.

Indeed, it has never been the case, as we would understand it, that the application of the design itself has involved every conceivable element of the design.  In other words, very, very tiny differences may still be an application of the design itself, but an obvious imitation would be one not conscious of the registered design but with some differences that obviously would not be the design itself.

HAYNE J:   Do I understand your submission to hinge around the proposition that fraudulent imitation is conscious use?

MR YATES:   That is so, your Honour.

HAYNE J:   What is buried in the word “use”?  “Conscious” I understand - you know of the existence of the design - but “use” seems to carry with it a whole subset of ideas that may – they may not – bear upon the ordinary meaning of the word “fraudulent”.

MR YATES:   Yes.  Your Honour, it is a difficult concept, use of the registered design, when one thinks about it and what may be involved in it, but what seems to be captured is having the design before you and perhaps appreciating the features that are involved in it and allowing those features to be carried over into the registered design itself, or at least in a form which is sufficient to be regarded as an imitation of those features.

The cases themselves do not go into any greater analysis of what conscious use of the design might be and perhaps, having regard to the policy objectives of the Act, it is not necessary that one do that.

GUMMOW J:   You would have to look at section 32B.

MR YATES:   Your Honour has in mind the so-called innocence defence?

GUMMOW J:   Yes.

MR YATES:   Your Honours, it would be difficult to see how in a case of fraudulent imitation, in a practical sense, that that defence could apply.  One can obviously see how it would apply in a case of the actual application of the design or the application of an obvious imitation where the alleged infringer simply did not have the design before him or her, simply did not know about it.  But in the real world of practical judgment making, it is difficult to see how that subsection has application in the case of a fraudulent imitation. 

Under the earlier United Kingdom legislation, as we would understand it, there was no defence of innocence, such as found in our Act.  That only became a defence in the United Kingdom when the Act was changed in 1949 to make out a case of infringement where the design was applied or one that was not substantially different from it.  In 1949 in the United Kingdom, any mental element was removed from the concept of infringement of a registered design, but what then came in was a defence of innocence.  Curiously, in the Australian legislation ‑ ‑ ‑

GUMMOW J:   Section 32B came in in 1981, did it not?

MR YATES:   It did, but there was an earlier ‑ ‑ ‑

GUMMOW J:   Was there?

MR YATES:   Yes, before 1981 – one sees this conveniently in the 1973 reprints of the Australian statute.  There was a defence of innocence but also at the same time there was of course an offence; it was an offence to apply an imitation of a registered design.  So that in the form as at 1973, I can say, your Honours, section 31 provided that:

If any person infringes the copyright in a registered design, the owner of the design may maintain against him an action for damages or penalties or for an injunction –

But there was a proviso to section 31 in these terms:

Provided that no damages or penalties shall be awarded against any person for the infringement, unless the Court before which the action is tried is satisfied that the defendant committed the infringement knowingly, or after notice that the copyright in the design subsisted.

So it was changed somewhat in 1981, but, curiously, it was there.  It would be our submission that it really could have no particular role to play in a civil suit involving the application of a fraudulent imitation. 

McHUGH J:   But there are two problems I have with your submission, and they are these. The first is that even in this area, it is a serious finding to make against anybody that they have been involved in fraud, that they have applied a fraudulent imitation. The second problem I have is that section 30 is a deeming provision, and you have three distinct categories of infringement. First, applying the design, so if you have the design and you apply it to an article, then you infringe. Secondly, you apply what is an obvious imitation of it, you cannot be heard to say that you did not infringe. And then the third one is a fraudulent, so you have straight out application of the design, applying an obvious imitation of it. Why does not “fraudulent” have its natural meaning of the notion of concealment, of deceit?

MR YATES:   Well, your Honour, part of the reason must be the lineage of cases that existed before the 1906 Act.

McHUGH J:   I think that is the strength of your argument, that up to 1906 the English cases seem to have taken a very conservative view of what constitutes fraud.

MR YATES:   Your Honour, the other matter that I should submit in this regard and forgot to was that your Honour did draw attention to Mr Justice Parker’s judgment.

McHUGH J:   Yes.

MR YATES:   Also, in Mr Justice Farwell’s judgment in Golf Ball Developments, just after the passage quoted by Mr Justice McLelland, there are very, very strong findings of fact by the judge, Justice Farwell, that he put out of mind any suggestion that the designer of the accused golf balls had any fraudulent intention whatsoever, that he thought that the designs were completely different. And so, your Honours, although the untutored mind may look at fraudulent imitation in section 30 and read that with particular connotations, in our respectful submission, it just simply does not have the legal connotation, so it does not have the degree of moral culpability which your Honour has ascribed to it. It just simply does not have that.

Any blameworthiness really is an irrelevant consideration so far as the application of this section is concerned, because what it is dealing with is the protection of the skill and labour of the designer.  One can appreciate that the objects of the Act are being fulfilled where in fact there has been a knowing, conscious use of the design, with knowledge of the design owner’s rights or at least a suspicion of those rights.  The objects of the Act would not be fulfilled by only providing for a particular kind of infraction of monopoly where, in addition, there was dishonest concealment.

McHUGH J:   I suppose there is no report that preceded the original Act?  I mean, nothing in any parliamentary debates that might throw ‑ ‑ ‑

MR YATES:   The 1906 Act?  There is nothing that we could find, your Honour.

CALLINAN J:   Mr Yates, it is a very grave finding to make against somebody in a commercial context, though, if they have to live later with the fact of a finding of fraud.

MR YATES:   Your Honour, the finding, though, would be of a fraudulent imitation of the design.

CALLINAN J:   I understand that.

MR YATES:   I fully appreciate that a lay person may misunderstand what that involves, but, in my respectful submission, that should not dictate what the substance of the section means.

CALLINAN J:   I do not know why, apart from the history to which you have referred, it should not mean what it means at common law.  Can you tell me this, what findings, if any, did the primary judge make with respect to your alternative allegations, in paragraph 26 of the statement of claim on page 5, of obviousness and application?

MR YATES:   His Honour found that there was no application of – we never said that it was an application of the design.  It was always a case of obvious imitation or fraudulent imitation.

CALLINAN J:   No, you did plead it.

MR YATES:   Yes, but at the ‑ ‑ ‑

CALLINAN J:   You pleaded:

applied the design or an obvious or fraudulent imitation of it ‑ ‑ ‑

MR YATES:   Your Honour is correct, with respect, but the way that the case was conducted, it was not put that it was a registered design.  It was put that it was an obvious imitation or a fraudulent imitation.

CALLINAN J:   What finding did the primary judge make about obviousness?

MR YATES:   Your Honours, his finding was that there was no application of an obvious imitation; his Honour made that finding at page 1203 of volume 3 of the appeal books.  The preparatory observations and findings of his Honour are at paragraph 360, at the top of the page, where his Honour set out what he regarded to be the relevant principles in relation to fraudulent imitation, and his Honour did that in the context of dealing with another design.

CALLINAN J:   Where does his Honour make a ‑ ‑ ‑

MR YATES:   I am sorry, your Honour.  Then in paragraph 361, he identifies certain differences, which he just refers to as “slight differences”.  Then at paragraph 362, his Honour said:

That leaves as differences between RD2 – 

that is the design in suit, your Honour – 

and KA1 – 

which was one of the accused articles – 

the steeply chamfered inner lip on the top of the frame of RD2 and the vertical ribs on the outside of the frame of RD2.  These features are not present in KA1.  Are these two differences merely slight differences so that KA1 is an obvious imitation of RD2?  Although there are a number of similarities between RD2 and KA1, I have reached the view that the differences, particularly the absence in KA1 of the steeply chamfered inner lip on the top of the frame, are more than slight differences.  I do not think that KA1 is an obvious imitation of RD2.  It follows that KA2 is not an obvious imitation of RD2.

Then his Honour turned his attention to considering fraudulent imitation, and that involved him in going back and looking at some of the facts which he had previously discussed in earlier paragraphs.

CALLINAN J:   Did he make a finding that those non‑obvious differences, referred to in 362, were devised in order to disguise?

MR YATES:   No, his Honour made no finding to that effect, your Honour.

CALLINAN J:   Is that a problem for you?

MR YATES:   No, it is not, your Honour.  It is not.  We submit that ‑ ‑ ‑

CALLINAN J:   Although they amounted to significant differences, or certainly not obvious differences.

MR YATES:   Yes.  The differences that his Honour referred to in paragraph 361 he regarded as “slight differences”, and he made no finding as to why they had been omitted.  In paragraph 362, his Honour dealt with the two other differences, which he regarded as being “more than slight”, but made no express finding as to why those omissions were in KA1.

GUMMOW J:   Now, assume this was a get‑up case – just assume that for a moment, it was a passing‑off case – what would be involved in the notion of fraud there?

MR YATES:   Well, in terms of being a colourable imitation, your Honour?

GUMMOW J:   Yes.  You want damages for passing off – for stealing the get‑up.

MR YATES:   Well, we would seek to show in such a case that the designer was aware of the existence of the product that was sought to be passed off, although intention itself would not be necessarily relevant.  It may be, of course, in seeking to obtain an account of profits, if that were the case.

GUMMOW J:   That is what I am putting to you.

MR YATES:   Yes, well, certainly, in ‑ ‑ ‑

GUMMOW J:   What then is involved?

MR YATES:   Well, your Honour, there would be simply a knowing use of the plaintiff’s article that had the registered design on it, and ‑ ‑ ‑

GUMMOW J:   He would not get very far if he said, “Look, I was so clever I managed to come up with something that’s really different”, would he?

MR YATES:   No, he would not, your Honour.  He would not.  One would look at it as a matter of substance and see whether or not there was conveyed a misrepresentation.

GUMMOW J:   The notion of fraud in that area is designed to answer that sort of argument.

MR YATES:   Yes, your Honour.  The question would simply be whether or not in the circumstances there was a misrepresentation as to the trade source or provenance of the article that was passed – the infringement of the passing‑off article.

HAYNE J:   Where do I find the primary judge’s findings about what you described as “conscious use”?

MR YATES:   Your Honour ‑ ‑ ‑

CALLINAN J:   Paragraph 376 on page 1206?

MR YATES:   Yes, that is so, your Honour.

HAYNE J:   Is that where it is all to be found?

MR YATES:   Your Honour, in a sense, yes, but, in another sense, no, because his Honour had set out relevant findings of fact in paragraphs 119 to 123 and also in paragraphs 364 through to 375, which served to inform his Honour’s finding in paragraph 376, although his Honour goes on in that paragraph to articulate specific matters that bore upon his Honour’s consideration in that regard.

HAYNE J:   What am I to take from the first sentence at 376?

MR YATES:   Your Honour, that the designer of the ‑ ‑ ‑

HAYNE J:   I can read the words, but what is it conveying?

MR YATES:   The concept, your Honour.  What it is conveying is that the designer knew of the plaintiff’s article that bore the registered design, and that in coming up with his own design for KA1, he took particular features from that or at least was inspired by various features from that, and when they were translated into the design of the finished product, they were an imitation.  It could only be regarded as being an imitation, by reference to a test of visual comparison.

McHUGH J:   But it is the imitation that must be fraudulent.  You must apply the fraudulent imitation, which rather suggests that you are looking at the imitation and what it does.

MR YATES:   Well, your Honour, it does not say in terms “fraudulently imitated”, it looks at the imitation and then classifies that imitation as to whether or not it is a fraudulent one or not.  So that once one has the imitation, one of the features of fraudulent imitation is that in distinction to an obvious imitation, it is not so close.  In a fraudulent imitation, it is a little further away but it is nevertheless an imitation, and if you did not know, if you did not have evidence of the fact that copying was going on, then – I am sorry.  The fact that copying is going on serves to inform the decision as to whether or not there is an imitation.

McHUGH J:   But what is the difference, on your theory of the section, between applying the design and applying a fraudulent imitation of it?  I mean, on what the trial judge found in the first sentence of paragraph 376, that is an application of the design in one sense, is it not?

MR YATES:   No, it is not, your Honour.  His Honour is clearly not there, we would submit, referring to application of the design.

McHUGH J:   I know he is not, but “in designing KA1, knowingly, consciously and deliberately based his design” on it.

MR YATES:   Yes, your Honour.

McHUGH J:    There would be few cases where somebody who applied the design would not also be guilty of making a fraudulent imitation. 

MR YATES:   Well, your Honour, it may be the case that without any knowledge of the registered design at all, somebody simply applies that design ‑ ‑ ‑

McHUGH J:   Yes.

GUMMOW J:   That is Turbo Tek, is it not? You are so smart that you come up with something that has taken you outside the area.

MR YATES:   That is so, your Honour, and indeed, in Turbo Tek, they certainly had the article ‑ ‑ ‑

GUMMOW J:   You have, nevertheless, done something unconscionable in the sense that you have used the plaintiff’s property.

MR YATES:   No, you have come up with a new design.

GUMMOW J:   But you managed to use it so successfully that you added so much to it, you have come up with something new and, therefore, you escape.

MR YATES:   Yes, you have passed the boundary of imitation and come up with something which, in the language of the Full Court, was a distinctly different design, which seems to be the other side of the coin.

GUMMOW J:   As Justice Callinan says, do we not have to look at paragraph 378 on 1206?

MR YATES:   Yes, that is so.  What his Honour did earlier on of course was to make that finding that it could not be an obvious imitation and then dealing with the elements of fraud, he went back and said although there are the differences – and he notes the most significant ones in lines 33 and 34, his Honour then says, at line 34:

However, the features of shape and configuration which give RD2 its distinctive appearance, namely, the snap fit mechanism, the control bars and the blade ends including the spigots (despite small differences) have been copied.

That harkens back to his Honour’s findings at paragraph 355 on page 1201 where his Honour was looking at the relevant prior art and in subparagraph 1 – and he was noting the differences – he said:

The shape and configuration of the end parts of the blades, and the shape and configuration of the receiving points in the outer frame and control bars.  In fact, to my mind, it is this difference which is the most eye-catching on first examination of RD2 and the relevant prior art.

That is a significant observation because when one is carrying out a test of visual comparison for the purposes of design infringement, the practical test is of course to the eye appeal and first impressions are important.

GUMMOW J:   Part of the trouble in this area, I think historically, is that the judges were a bit weak initially in reading “obvious”.  They gave it too weak an application really and they said, “Oh, it’s not obvious”.  That was when you fell into the fraud situation.

MR YATES:   That may well be so, your Honour.

GUMMOW J:   They got fascinated with this notion of eye appeal.

MR YATES:   In any event, your Honours, his Honour put a stamp on those particular features very early on as being the ones that were the most eye‑catching on first examination.  Then his Honour noted also the presence in the registered design of the chamfered lip and the vertical ribs.  When his Honour came back to consider the matter in paragraph 378, he said, “I notice that it hasn’t got those two other features, but really what’s been taken are the features which to my eye give the registered design its distinctive appearance”.  Earlier on in his discussion of the relevant principles – and one sees this in paragraphs 293 and 294 at page 1187 ‑ ‑ ‑

GUMMOW J:   Just looking at 378, the last two sentences, I may be naïve about this, but to say you have copied something which you know is registered, which is the finding here, why is that not fraudulent?

CALLINAN J:   On any view of fraud, whether it has a special statutory meaning or you look at the common law.  It is a question that is exercising my mind too.

GUMMOW J:   Yes.

MR YATES:   Well, it certainly fits in with the notion that we are submitting, your Honours, but I accept the force of what your Honour puts.

GUMMOW J:   You want to win the case presumably.

CALLINAN J:   Yes, you do not have the need to look at any refinements on that view.  It is fraud; fraud at common law and certainly fraud under the Act, if what Justice Gummow puts to you is correct.

MR YATES:   I would accept that that certainly supports a ‑ ‑ ‑

GUMMOW J:   How did the Full Court overcome that?  That is the real question.

MR YATES:   I will take your Honours to the Full Court reasons if I may.

GUMMOW J:   I am not meaning to take you off your path if you want to pursue some other path first.

MR YATES:   Well, it would be convenient to do it now, your Honour.

CALLINAN J:   What his Honour has just put to you seems to me, with respect, to be correct, even if you apply the ref check or any of those other tests in this field, the special care that a court must exercise in making a finding of fraud.

MR YATES:   Yes, your Honour.

CALLINAN J:   In view of that finding, it would seem that that requirement may well have been met.

MR YATES:   Yes, and I accept the force of that observation with the greatest respect, your Honour.

McHUGH J:   Well, it does lead to the conclusion though, does it not, that it would mean that except in exceptional cases, any application of the design would also be a fraudulent imitation?

MR YATES:   No, your Honour, because it may not be copied.

McHUGH J:   Well, it is copying it, is it not?

MR YATES:   No, that ‑ ‑ ‑

McHUGH J:   If you are applying it you are copying it.

MR YATES:   No but, your Honour, a design can be applied without even knowing of the existence of the design.  That is ‑ ‑ ‑

McHUGH J:   I know that.  That is why I said exceptional cases, but they would be few and far between.

MR YATES:   Yes, or in the case of an obvious imitation, once again one does not need to have any knowledge of the design.  I was going to take your Honours to the Full Court ‑ ‑ ‑

GUMMOW J:   There was a finding here, was there not, that Mr Rogers was the sort of designer who knew about ‑ ‑ ‑

MR YATES:   Yes, there were a number of adverse findings concerning him, but insofar as his knowledge about the ‑ ‑ ‑

GUMMOW J:   Well, where is the best, from your point of view, about knowledge?

CALLINAN J:   Well, he was asked to produce a design that was like other products on the market, was he not?

MR YATES:   Yes.  His evidence-in-chief, your Honour, was that ‑ ‑ ‑

HAYNE J:   Your best finding is in 376, is it not?

CALLINAN J:   Yes.

HAYNE J:   Yes, “unable to accept . . . denial that he knew”, et cetera.

MR YATES:   Yes, that is certainly so, your Honour. 

HAYNE J:   There are some red-blooded findings here which you seem to be studiously wishing to avoid, but there we are.

MR YATES:   I am not studiously wishing to avoid, your Honours.

GUMMOW J:   You are being delicate in a Chancery sense, but you have to get down in the pit.

MR YATES:   I am wishing to embrace those findings, your Honours; I do not wish to be misunderstood on that.

GUMMOW J:   I thought there were findings anterior to 376 about Mr Rogers on another aspect of the case but which would lap over.

MR YATES:   Yes, there was a great deal to do about the involvements of Mr Benfield in the enterprise that Kemalex was carrying out and ‑ ‑ ‑

McHUGH J:   That was back in 1994?

MR YATES:   That was much earlier on, your Honour, yes.  The cross‑examination was directed to seeking to draw adverse criticisms about his credit, and one sees these adverse credit findings ‑ ‑ ‑

GUMMOW J:   There is a finding at 366, is there not, on page 1204:

I find that in 1996 Mr Rogers had reason to suspect that any outlet director produced by the plaintiff was the subject of a registered design.  I reject his evidence – 

et cetera.

MR YATES:   That is so, that is one of them.  Other findings, more generally in relation to his evidence, included, in paragraph 98, that he was prepared to sign documents that were not wholly accurate, in 120, that he gave an unconvincing explanation ‑ ‑ ‑

GUMMOW J:   Just a minute, 98?

MR YATES:   Paragraph 98.  May I just give your Honours a list of these?  There is 98, 120, and then paragraphs 131 to 133 – I will take your Honours to that, if I may.  That is at page 1158.  His Honour said:

I pause at this point to say something further about the evidence of Mr Rogers.  He was not a particularly satisfactory witness.  At times in cross‑examination he was very guarded, and at other times he was evasive.  I have already mentioned some unsatisfactory features of his conduct and evidence.  For reasons I will give, I find that by no later than April 1996 there was an arrangement or understanding between Mr Colebatch and Mr Benfield that a business involving the commercial production of an outlet director would be established.

Then, passing over the next sentence, he said:

I do not accept Mr Rogers’ evidence that it was not until September that he became aware of Mr Benfield’s involvement in the production of the Kemalex outlet.  He was challenged on this topic, and he was shown a letter dated 5 June 1996 from himself to Mr Daniels of Kemalex wherein he said:

“I have been requested by the Benfields to produce patent/design registration drawings.”

His explanation in cross‑examination that this was a “slip” was unconvincing.  He tried to explain the statement as merely a mistake . . . That is a possible explanation if the statement was the only piece of evidence.  However, I find on the whole of the evidence that it is most unlikely that Mr Rogers did not become aware of Mr Benfield’s involvement until September 1996 and I reject his evidence to this effect.

Also, your Honours, in‑chief, Mr Rogers had given evidence to the effect that his instructions were to design something that was different to other products in the market, but then that came to be changed to that he was instructed to design a product that was similar to other products in the market.  We would submit the only relevant product was the plaintiff’s outlet director part, which his Honour made the finding about in paragraph 376 – that the design was knowingly, deliberately and consciously based on that product.

HAYNE J:   That factual substratum may be critical to whether the Full Court was right or entitled to treat the findings in the way in which it did, and I understand its importance for that purpose.  Leave it aside for the moment and let it be assumed that Mr Rogers had been entirely frank in his evidence and said, “I had RD2, I intended to design something that was based on RD2 and I made the following changes:  (a), (b), (c).  I thought the consequence was that I had designed a new product”.  On that factual basis, would there still be fraudulent imitation?

MR YATES:   We submit that there would be, your Honour.

HAYNE J:   And where lies the fraud?

MR YATES:   The fraud lies in the use of the registered design, your Honour.  That situation that your Honour puts to me was certainly the situation in Pugh v Riley, and certainly the situation in the Golf Ball Developments Case.

GUMMOW J:   Well, it lies in the use of someone else’s property as the foundation for what you have said is the achievement of some independent property.

MR YATES:   That is so, your Honour, it ultimately being an imitation, despite whatever intentions were involved in the design process.

GUMMOW J:   There would be a question – which might be a good way of testing it – if he went off and sought the registration himself.  There would be a real question as to whether he did not hold that as constructive trustee for the other party. 

MR YATES:   That may be so, your Honour, yes.  Your Honours, I was seeking to deal with Malleys v J.W. Tomlin and there is a particular submission that I do wish to put to your Honours regarding that decision in this Court.  May I take your Honours to that now.  The decision is reported as Malleys Ltd v J.W. Tomlin Pty Ltd (1961) 180 CLR 120. The earlier parts of the Court’s reasons deal with the issue of whether or not the design was validly registered, and, in particular, as to whether or not the so-called “J” rim could be regarded as part of the registered design. Your Honours will remember that Mr Justice McLlelland did not regard the “J” rim as being part of the registered design. This Court held that his Honour was in error in that regard, and that ‑ ‑ ‑

GUMMOW J:   Where do we see that finding by the Chief Judge about the “J” rim?

MR YATES:   In the Weekly Notes, your Honour, 726.  It is perhaps more particularly expressed in the left‑hand column at 727, about point five.  It says:

However, I am of the opinion that this part of the drawing which illustrates the design would, to an informed eye, simply indicate that the bottom would be applied to the cylinder by a wheeling-in process or some similar process and that it is not an essential part of the design, and I shall deal with the case on that basis.

It is the latter couple of sentences in the first complete paragraph on page 727 in the left‑hand column. 

At page 126, dealing now with this Court’s reasons, your Honours ‑ ‑ ‑

GUMMOW J:   I am sorry, I am being slow about this.

MR YATES:   I am sorry, your Honour.

GUMMOW J:   Why was the Chief Judge devoting so much time to worrying about the “J” rim on page 727 in the process of his reasoning?  What was Mr Bowen trying to make out of all this in argument?

MR YATES:   I think the argument was that you can just completely disregard the “J” rim and, of course, if one did that, then the defendant’s design would be closer in appearance to the plaintiff’s registered design because the defendant’s design did not have a “J” rim.

GUMMOW J:   Yes.

MR YATES:   His Honour accepted, obviously, the submissions that were advanced in that regard. However, this Court said you cannot ignore the “J” rim. Taking your Honours to page 126 of the reasons of this Court, at the top of the page, the Court turns its mind to the question of infringement and then paraphrases section 30(a):

As has already been said, the article in respect of which the design is registered is “Bottom for toilet pan” and if in this case there has been an infringement, it is because the appellant has applied the design or a fraudulent or obvious imitation of it in the making of “articles” designated as bottoms for toilet pans.  This can only be determined by looking at the bottoms as fabricated before the process of incorporating them in pans begins and determining whether they are of substantially the same shape as that represented by the registered design.

Then there is a quotation from Mr Justice McLelland’s reasons for judgment that I have already taken your Honours to – that is the passage at page 728.  After quoting Mr Justice McLelland, their Honours said:

Upon these findings his Honour concluded that “the defendant’s design is an imitation which is based, and deliberately based, upon the registered design, and that the imitation was a fraudulent imitation within the meaning of the section”.

We agree with McLelland C.J. in Eq. that the appellant did not apply the respondent’s design or an obvious imitation of it in its manufacture of bottoms for toilet pans.  His Honour so found while treating the “J” rim as not an integral part of the design; but if it is, as we think it is, further ground is provided to support the conclusion that there has been no application of the registered design or an obvious copy of it, for, as will appear later, the absence of the “J” rim from the appellant’s design itself constitutes a very material difference from the registered design.

His Honour did, however, find in effect that the design used by the appellant was deliberately based upon the respondent’s design and, disregarding the “J” rim altogether, such differences as there were had been adopted for the purpose of disguising this.  This must now be examined, but on the footing that the “J” rim cannot be left out of account.

Now, just pausing there, the question is prompted, what is the “this” that their Honours are referring to in the passage, “This must now be examined”?  It can only be the foundation of fact which has been set out in the previous sentence.

McHUGH J:   What their Honours set out there is not what the Chief Judge found, is it?

MR YATES:   No, that is so, your Honour.

McHUGH J:   They impute to him by using the words “in effect” that the differences were adopted for the purpose of disguising this.

MR YATES:   Yes.  Our submission is that in endeavouring to understand what their Honours were meaning, should their Honours be taken to have been giving a description of facts which did not accommodate the findings of fact by the trial judge, because their Honours certainly do not seem to be intending to depart from the findings that his Honour made.

McHUGH J:   It is not consistent with their idea that there cannot be a fraudulent imitation without disguise?  I mean, they had already said it, had they not?  They said it in the very next paragraph.

MR YATES:   Well, they do but then in the following paragraph, if I can just jump down to that, your Honour – I do want to come back to the middle paragraph – they repeat:

The finding of McLelland CJ In Eq was, therefore, that notwithstanding that the design applied by the appellant in its manufacture was not the same as the registered design and that it was not apparent that it was an imitation of the registered design, nevertheless it was an imitation because the evidence showed that it was deliberately based upon the registered design.

Their Honours do not seem to be disagreeing with that as a finding and as being the necessary finding.

GUMMOW J:   No, but they seem to be saying over at 128, that because of the omission of the “J” rim – there is a very long sentence on 128 beginning about point 4:

Accepting fully his Honour’s findings ‑ ‑ ‑

MR YATES:   Yes, that is so.

GUMMOW J:   That twists and turns its ways, then after about 12 lines:

we are nevertheless forced to conclude that there is a substantial difference . . . not an imitation.

So they say to forget about everything else.

MR YATES:   That is so, your Honour.

GUMMOW J:   There always has to be an imitation, and it was a different design.

MR YATES:   Yes.  We have submitted in our written submissions, and certainly submit now, that the ratio of this case is that regardless of what elements of fraud are present, a design cannot be a fraudulent imitation of a registered design unless it is an imitation, and it is in this context that the discussion occurs because ‑ ‑ ‑

GUMMOW J:   But it is this notion of a “different design” which goes beyond what is an imitation.

MR YATES:   Yes, it being remembered that their Honours did depart from the trial judge in finding that the “J” rim was a part of the design, which could not be ignored.  So we would submit that their Honours should not be seen as intending to depart from the trial judge’s findings of fact and, indeed, that they regard it as the critical fact that it was a fraudulent imitation because the evidence showed it as deliberately based upon the registered design.

McHUGH J:   In terms they rejected it, did they not, because they accepted that it was.  They said at point 5 on 128:

Accepting fully his Honour’s findings that the appellant’s final design was arrived at after an examination of the registered design and that the respondent’s idea of a bottom with a flat section around a dome was taken by the appellant and conceding that the embossed cross could be regarded as no more than as an element of disguise and that apart from this and the “J” rim there was, despite the fact that the proportions were not identical, no substantial difference between the shape . . . we are nevertheless forced to conclude that there is a substantial difference of a material kind –

So the fact that you copied somebody else’s property, the fact that you took part of it, it is not fraudulent if you come up with something which they say was a different design.

MR YATES:   That is so, but in that process of reasoning, your Honour, they are putting all of that aside.  They are saying whatever findings you could make in that regard you can put that aside because it cannot be a fraudulent imitation without there being an imitation.

GUMMOW J:   Then you have to compare what they say there, “not an imitation . . . but a different design”, with the finding in your favour at trial at paragraph 378 on page 1206.

MR YATES:   Yes, your Honour.

GUMMOW J:   Now, it may be that Malleys would have been very different if instead of that long sentence we have been reading on 128, they had been able to say what was said in your favour at 378, namely copying of the essential distinctive appearance.

MR YATES:   That is so, your Honour, because on the one hand in Malleys, the distinctive appearance had not been taken.  On the other hand, in the case on appeal, the trial judge found that the distinctive appearance had been taken.

HAYNE J:   Plus the facts that came up in Malleys included the inference drawn at trial, see 728, that the embossed cross was added with deliberation to make the appearance different.  That is, it was a case where there was a piece of deliberate disguising.

MR YATES:   Well, your Honour, we, with respect, would not read that as being deliberate disguising, but simply a difference made to make the design look different from the registered design, because his Honour said ‑ ‑ ‑

McHUGH J:   Their Honours use the phrase “element of disguise” on 128, do they not?

MR YATES:   I think they say “could be regarded as . . . an element of disguise”, exactly. 

McHUGH J:   Anyway, you were going to come back to that passage on 127 that stands in your way ‑ ‑ ‑

MR YATES:   Our submission with respect to that passage was simply that when their Honours said, “This must now be examined, but on the footing that the ‘J’ rim cannot be left out of account”, that was in the context of undertaking design comparison and using the particular foundation of fact referred to in the previous sentence, so when their Honours then said in the next paragraph, “Turning to s 30 it is apparent that there is infringement in any one of three cases”, their Honours are only seeking to confine their attention to the facts of this case which their Honours said must now be examined.

So that the passage upon which the reliance was placed by the Full Court in the instant appeal does not stand, as it were, as some immutable test that must be satisfied in every case in which fraudulent imitation is alleged.  Rather, their Honours were simply turning to the facts of the case then before them to posit the three circumstances in which infringement could be made out having regard to that basis of fact for the purposes of carrying out a design comparison.

McHUGH J:   You have to say the paragraph at 127 is erroneous and is not to be read.  I suppose you could say, “Mr McFarlane, the editor of the Commonwealth Law Reports in 1961, left the judgment buried in the Australian Law Journal and it took 33 years for Mr Merralls to dig it out.”

MR YATES:   Unearth it.

GUMMOW J:   With some prompting.

MR YATES:   We do not say that, your Honour, but we do say that the ‑ ‑ ‑

GUMMOW J:   Do not rush to accept that invitation.  Look at page 127 about point 8:

The finding of McLelland C.J. in Eq. was, therefore, that notwithstanding . . . nevertheless it was an imitation – 

not a fraudulent imitation, “an imitation”:

because the evidence showed that it was deliberately based ‑ ‑ ‑

MR YATES:   Yes.

GUMMOW J:   So what they attributed was a finding that what was being said was, “Look, you will end up with an imitation, provided there has been a deliberate basing.”  What they were then saying – they are saying, no, because the deliberate basing may have led to a different design, and that is their conclusion at 128, and that cannot be an imitation, fraudulent or otherwise.

MR YATES:   Yes, your Honour.  So, your Honours, our submission is that Malleys v Tomlin, their Honours were not seeking to, as it were, lay down a test which is to be read onto section 30, but were simply dealing with the particular case that was then before their Honours, and that Malleys v Tomlin should be not read with any greater significance than that on the question of imitation.

Similarly, your Honours, in relation to Firmagroup when special leave was granted to consider the questions of “fraudulent” and “obvious imitation”, it is quite clear, in our respectful submission, that when the matter came to this Court it once again turned on the question of imitation, whether there was imitation or not.  So Firmagroup cannot be read as being an endorsement for some specific test of fraudulent imitation.  It can only be read, once again, as dealing with the facts of the case that were then before the Court and whether or not there was an imitation.

As your Honours know that in Firmagroup the Court quoted a passage with approval from Mr Justice King’s reasons for judgment.  One should go, we submit, to Mr Justice King’s reasons for judgment in Firmagroup Australia Pty Ltd v Byrne & Davidson Doors (Vic) Pty Ltd (1985) 82 FLR 311. There is a lengthy passage, which I will not read to your Honours, but I would ask your Honours to note, commencing at the bottom of 318, where his Honour said:

I think that what emerges from this history of development of the defendants’ design is that the defendants and their designer were at all times aware of the appearance of the plaintiff’s product.

Then there are various findings of fact which I would ask your Honours to note which continue in that particular paragraph, but in the last sentence of that paragraph:

However, they believed that their final design was distinctively different from that of the defendants.  I think that this meant that they believed it not to be an infringement of any registered design relating to the plaintiff’s product.

The plaintiff’s contention is that the defendants’ design is deliberately based on the registered design and is therefore a fraudulent imitation of that design within the meaning of the Designs Act 1906. I think that in the present case the adoption by the defendants of the features of the pocket and its location alongside the lock and the area surrounding the lock could fairly be described as deliberately basing their design on the plaintiff’s product, even though the defendants and their designer were anxious to distance their design from the plaintiff’s design. Thus they did in the end consciously adopt salient features of that design, namely, the recessed handle and a face plate lengthened laterally to accommodate the recess and the lock side by side. The words “deliberately based” were used by the High Court in Malleys Ltd v J D Tomlin Pty Ltd to describe the finding of the court of first instance, on the basis of which the latter court found fraudulent imitation; however, the High Court went on to say that, while accepting the lower court’s finding that the defendants’ product was deliberately based on the plaintiff’s design, there is no copyright in an idea and it was the plaintiff’s idea that the defendant took and not its design.

That thought is continued when one goes over to the following page at 320, in the first complete paragraph on that page.  His Honour said:

My conclusion is that although there are common features of construction in the compared designs, it must appear, to find fraudulent imitation, that the overall distinctive appearance of the registered design has been taken.  In this case salient features of construction are taken, but the whole unit has been so redesigned to incorporate them that a different design has been produced.

McHUGH J:   It is the next sentence that is against you, though, is it not?

MR YATES:  

Thus the change in balance of the features and the lengthening of the article are not mere disguise but are themselves salient features of the defendants’ design which are novel and unique in that design.

That does provide some problem, your Honour, but it is clear, in my respectful submission, that his Honour would have found fraudulent imitation in this case had the accused article been an imitation of a registered design.  His Honour seems to have been – on page 319 at about point 4 – acceding to the plaintiff’s contention that fraudulent imitation was made out because the defendant’s design is deliberately based on the registered design.  Prior to that, his Honour was at pains to point out that the designers of the accused design believed that their final design was distinctively different from that of the defendant’s.  In other words, there was no finding that the changes were made to conceal the fact of copying.

McHUGH J:   What about Justice Fullagar’s judgment in Fisher?

MR YATES:   Well, your Honour, that, once again, we submit, turns on its own facts.  In Fisher v Fabtile Justice Fullagar quoted with approval the observations of Lord Justice Cotton, which do not provide of the necessity to provide dishonest concealment.  We would submit that simply that case, once again, just turns on its own facts.  Once again, no imitation was found; the case turning on that particular fact.

McHUGH J:   But that was why it was held to be no fraudulent imitation, and it was regarded as a case like Malleys, was it not, that there was just no imitation.

MR YATES:   I must say, your Honour, I had not read the case that way.  I had understood that ‑ ‑ ‑

McHUGH J:   I thought his Honour said that every difference had been made simply to disguise the taking of the plaintiff’s design.

MR YATES:   Your Honour, I think what his Honour was conveying was that even if you could regard every difference, every conceivable element of fraud being present, fraudulent imitation was not made out, because it was not an imitation.  So, once again, the case turned on the question of the visual comparison.  It was not an imitation.  So that no matter how much fraud one can find, it is not going to turn a case into infringement if there is no imitation.  We submit that that is all that the case can be taken as standing for.

GUMMOW J:   What is the significance of the provisions about statements of novelty with applications?

MR YATES:   Your Honour, we submit that ultimately ‑ ‑ ‑

GUMMOW J:   Was there a statement of novelty here?

MR YATES:   There was a statement of novelty, and I will take your Honours to the registered design.  The registered design is to be found in the second appeal book at page 541.  Your Honours will see that the article is described as “An air conditioning outlet director part”.  The statement of novelty, at about point 5 on the page – it is a little obscured but I think the meaning is clear.  The words are clear enough:

Novelty resides in the arrangement of the end parts of the blades and a coupling bar interconnecting said ends at each side of a surrounding frame as illustrated in the representations.

What attention was being drawn to there were the blades, the connecting bars and the sides of the surrounding frame as shown in the representations and so there was a claim that certainly those features were novel, but, importantly, your Honours, there was a statement of monopoly and that is of critical significance.  The statement of monopoly was that:

Monopoly is claimed in the shape and configuration of an air conditioning outlet director part as shown in the accompanying illustrations.

That is sometimes referred to as being a statement of monopoly in general terms, so that the monopoly that is being claimed here is not to some specific part of the design, as revealed in the illustrations, but indeed the whole design as revealed by the illustrations.  Those illustrations are in the following pages, up to page 546.  May I hope that your Honours’ assistants inform your Honours that there is a version of some of those drawings which colours the blades or the veins grey so that it gives a better understanding of the design and that is to be found at pages 941 and 942.

If your Honours would care to note, on page 941, that the illustrations shown on that page correspond to the illustrations shown on page 546 of the appeal book and with respect to page 942, those illustrations correspond to the illustrations at page 543 of the appeal book. 

So to answer your Honour Justice Gummow’s question perhaps more directly, we would submit that the statement of monopoly does not have any guiding role to play in this case, having regard to the statement of monopoly in general terms, so that when the question of design comparison is to be carried out, the task for the court was to look at the design of the infringing articles against the representations of the registered design considered against the background of what was the relevant prior art and I should now take your Honours to what the relevant prior art was.

There were two registered designs that constituted what the trial judge regarded as being relevant prior art.  The first was registered design No 84267 which is also referred to in his Honour’s reasons as RD1, and the representations of that design is also in volume 2 of the appeal books, at pages 909 to 913.

The page of particular relevance is 913, because the RD1 or registered design 84267 was in fact for a different article.  It was for the outlet director itself.  But, of course, part of that outlet director was the so‑called “blade box” – this was given various names.  If your Honours go to page 913 at the top illustration, your Honours will see that blade box, and what one there sees is a blade box where the blades are not moveable, they are integrally moulded into the frame.  The frame is perfectly plain and the blades do not protrude below the frame, but they are contained wholly within it.  So that was the first piece of prior art.

The second piece of prior art was registered design No 105504, and the illustrations for that registered design commence at page 923 of the appeal book.  Of particular significance is the illustration at page 925.  May I invite your Honours just to put that in landscape view; your Honours will there see the blades again.  These blades are moveable, there is no coupling bar, there is no four‑sided frame.  There are, rather, two bars on the side through which the spigots of the veins protrude, and the blades are of aerofoil shape – in other words, they are not of even thickness.  That was the only other piece of relevant prior art.  So the task of comparison for his Honour was to compare the accused articles against the registered design illustrations seen in the light of the prior art that I have taken your Honours to.

Now, the relevant articles were exhibits P3 and P4.  Exhibit P3 was known as KA1 and exhibit P4 was known as KA2.  I have an additional copy to hand up to your Honours, and there will be a copy in the exhibit box in Court.  We have marked these KA1 and KA2 on one side of the page.

GUMMOW J:   What are we looking at now?

MR YATES:   The accused articles, your Honour, KA1 and KA2.  KA1 was exhibit P3, KA2 was exhibit P4.  The only point that I wish to make, which is a fairly obvious point, is that it was those articles that had to be compared against the representations of the registered design, having regard to the relevant prior art to which I have taken your Honours in volume 2 of the appeal books.  Can I then pass on to the Full Court’s comparison or at least its ‑ ‑ ‑

CALLINAN J:   Before you do that, could you – sorry to interrupt you, but can you tell me where, if at all, the Full Court dealt with paragraphs 376 to 378?

MR YATES:   Yes, your Honour.  This is to be found at page 1259 and page 1260 of volume three ‑ ‑ ‑

GUMMOW J:   Paragraph?

MR YATES:   Paragraph 57 to paragraph 63.

GUMMOW J:   It is reported in 60 IPR 512.

MR YATES:   Thank you, your Honour.  At paragraph 57 their Honours said:

His Honour made the finding of deliberate copying and noted the obvious similarities between the Design and KA1.  He then (at [378]) properly considered whether KA1 embodied a shape or configuration distinctly different to the Design.  He concluded that the shape and configuration were not distinctly different.  In coming to that conclusion, however, he characterised as not distinctly different differences previously held (at [362]) to be not so slight as to be insubstantial for the purposes of obvious imitation and did not consider the effect of the omission of two of the three features held (at [355]) to give the Design its novelty, its distinctive shape or configuration over the prior art.  His Honour did not consider the effect of these omissions on a finding of imitation.  His Honour should have found that there was no imitation in the circumstances.

I want to come back to that, your Honours.

GUMMOW J:   What about the last sentence at 378?  What did they say about that?

MR YATES:   Well, their Honours, we would submit, simply did not turn attention to that fact.  What their Honours – there were a number of difficulties.  The first is that it is clear, we would submit, from 378 that the learned trial judge did take into account the effect of the omission of the two features.  His Honour did say expressly at line 32 in 378:

There are differences, the most significant of which are the absence from KA1 of the chamfered lip and the vertical ribs on the outside of the frame.

So, with respect, we would submit that the Full Court mischaracterised what in fact the primary judge did.

CALLINAN J:   Misstated it, not just mischaracterised it.

MR YATES:   They did misstate it, your Honour.

CALLINAN J:   It seems to be a misstatement of it.

MR YATES:   Yes.  It was misstated.

CALLINAN J:   His Honour turned his mind specifically to the matter which the Full Court says he did not.

MR YATES:   That is so, your Honour.  He did consider the effect of those omissions.  More importantly though, his Honour, noting those differences nevertheless, as his Honour Justice Gummow pointed out to me, in the last sentence said:

the features of shape and configuration which give RD2 its distinctive appearance . . . have been copied.

So what their Honours seem to be saying there is if you have three features which may contribute to novelty, if you miss out two of them then that is fatal to a case of imitation.  But that is not the correct test.  The correct test, your Honours, is one of visual comparison, and that these various features will have different eye appeal and different significance so far as eye appeal is concerned.  What his Honour was at pains to stress was that the very features that he thought were the eye-catching features on first inspection had in fact been copied.

So in carrying out the visual comparison test, one has to carry that out in a practical way and give the relevant weight to the eye appeal that these features have, and the Full Court did not do that.  Indeed, the Full Court itself does not appear to have carried out its own visual comparison.

CALLINAN J:   The Full Court seems to be making a finding in paragraph 58, despite that it is put in the negative, that the two omissions were not conscious or mere disguises.  Is that right?

MR YATES:   Yes.

CALLINAN J:   So their focus have been entirely upon the two omissions and not the feature which the trial judge held to be distinctive and significant.

MR YATES:   Yes, that is so, your Honour.  And so, in effect, we would submit that their Honours in the Full Court were really just doing perhaps no more than a head count of features without taking into account the visual significance and impact upon the eye and whether or not the design had been imitated.  Also, implicit in paragraph 57, your Honours, seems to be the notion that if it could not be an obvious imitation because the two features were not present, therefore it could not be a fraudulent imitation because they are not present.

CALLINAN J:   It is irrelevant whether non-distinctive features were intentional disguises or not.  Is that not right?

MR YATES:   That is certainly so, your Honour. 

CALLINAN J:   Whereas, in paragraph 59 the Full Court is proceeding upon the basis that the absence of evidence of disguise is conclusive against you.

MR YATES:   Yes, your Honour.  I think it is fair to say, however, that the trial judge gave some weight to the visual impact of the two features, the chamfered lip and the ribs, but ‑ ‑ ‑

CALLINAN J:   But concluded in the end it was not a significant or distinctive feature. 

MR YATES:   Certainly, just to omit those features but to take the other features which were eye-catching, his Honour found that the overall distinctive appearance of the design had been taken.  So that, although the trial judge properly gave some weight to those omissions, nevertheless, his Honour applied the correct test, which was to look at the design as a whole, to look at the design of the accused article and to ask in respect of the accused article:  nevertheless, has the overall distinctive appearance of the registered design been taken?  His Honour clearly found that it had.  We submit, your Honours, that that was a perfectly correct application of the test of comparison and that there was simply no error in what his Honour did.  We would submit that there is error in the Full Federal Court’s analysis because their Honours not only misstated what in fact his Honour did do in the design process, but their Honours failed to give some significance to the difference in visual eye appeal of the things that had been taken and the things that had not been taken. 

CALLINAN J:    Paragraph 63 on page 1260 seems to – there is a reference to what the primary judge found with respect to the omitted items, but no reference to the final sentence in paragraph 378.

MR YATES:   No, that is so, your Honour.

CALLINAN J:    That the omissions, in his Honour’s opinion, did nothing to contribute to the distinctive appearance, or did not do sufficient to contribute to it.

MR YATES:   Yes, that is so, your Honour, that at the end of the day the impact of those features of shape and configuration which had been copied meant that the registered design had been imitated.  Your Honours, in this part of the Full Court’s reasons it, if I may say so, with great respect, twists and turns between two conceptually different matters.  The first matter, of course, is the question of design comparison, which is the matter that I am specifically addressing.  The other matter is whether an imitation could be a fraudulent imitation in the absence of dishonest concealment. 

So what their Honours do say in paragraph 57 is that on a visual comparison test you could not say there was an imitation, because two features had been left off.  In the balance of these paragraphs, 58 through to 63, their Honours seem to be talking more about, in any event, you could not find it was a fraudulent imitation, because the differences that had been omitted were not omitted for the reason of dishonest concealment of the fact of copying.

CALLINAN J:   But it is irrelevant why they were or were not omitted, if they are not a significant or important feature.

MR YATES:   Except to this extent, your Honour, that his Honour had already found that there could not be an obvious imitation, so that his Honour had placed his analysis fairly and squarely in the camp of fraudulent imitation.  He realised – correctly, we would submit – that even though something might not be an obvious imitation, it could nevertheless be a fraudulent imitation, even though the differences between the design of the accused article and the registered design were perhaps greater than would be the case expected for an obvious imitation.  Your Honours, I should also point out paragraphs ‑ ‑ ‑

HAYNE J:   Do I read the Full Court as saying, particularly in 57, that the existence of not insubstantial differences requires the conclusion, “No imitation”?

MR YATES:   That seems to be what their Honours are saying, your Honour, and we would submit that that is an error, because there may be differences which would necessitate a finding of not an obvious imitation, but the fact that a finding of non‑obvious imitation is found does not compel a conclusion that there was a finding of not fraudulent imitation.  Their Honours seem to be equating the two, and to do so simply destroys the distinction, and there clearly is a distinction.

HAYNE J:   That is, am I to read it as saying, “Because not obvious imitation, and not obvious imitation because not insubstantial differences, not an imitation sufficient for the purposes of fraudulent imitation”.  Is that what they are saying?

MR YATES:   Yes, that is what I think their Honours are saying.

GUMMOW J:   I think, if you link that back with what they say at paragraph 29, the first two sentences, I would have thought, were undoubtedly correct.  I do not think you dispute that?

MR YATES:   I do not, your Honour.  I dispute the first complete sentence on the next page, page 1252, and then their Honours say:

There is no fraudulent imitation if the shape that gave the registered design novelty over the prior art is not taken.

Your Honours, that needs to be read with some care because if in fact there is one feature – and I posit this as an example – which distinguishes the registered design over the prior art and therefore confers its novelty and that one feature is not present in the design of the accused article, then clearly there could not be any ‑ ‑ ‑

GUMMOW J:   You cannot postulate an infringement suit which always turns into a validity suit.

MR YATES:   No.

GUMMOW J:   That is what they are doing, are they not, in the last sentence?

MR YATES:   Yes, your Honour.

CALLINAN J:   Would the second-last sentence be correct if they had said, “It is then necessary to find that each difference”, instead of that if they had said, “to find that any difference of substance was adopted merely”?

MR YATES:   Well, we would submit, your Honour, that that would not make a difference, not on the way that we would put the case, because what their Honours are referring to there is dishonest concealment because they so defined it earlier in their reasons for judgment in paragraph 26.

CALLINAN J:   But I am thinking of what the trial judge said at 378, or I took his Honour to be saying that those items that were different were not ones which contributed to distinctiveness.

MR YATES:   Well, I do not think that it can be put that highly, your Honour, with respect, because back at paragraph 355 on pages 1201 to 1202 the trial judge did refer to differences of shape and configuration, which he immediately noted, between the registered design and the relevant prior art.  Now, two of those were with the chamfered lip and the vertical ribs.  I have already drawn your Honours’ attention to the sentence at the top of page 1202.  The difference in paragraph 1 was “the most eye‑catching on first examination”.  Then in paragraph 356 his Honour said:

To my mind, the features which I have identified and, particularly the first, give RD2 a distinctive shape and configuration compared with the relevant prior art.

So his Honour certainly gave some weighting to the chamfered lip and the vertical ribs, but the issue, your Honours, is the relative weighting that that was given.  The fact that he could note all of those differences and therefore find that the design was valid is one thing, but when his Honour came to do the test of comparison for infringement he had to look at the registered design as a whole and its visual appearance and he had to look at the accused article as a whole and its visual appearance.  When his Honour did that it was apparent to his Honour’s eye that the eye-catching differences, which his Honour later described as giving its distinctive appearance had been copied, had been taken.

So his Honour properly giving full weight and taking into account the two differences, which must have had some contribution to visual appeal, nevertheless he saw those as being far down, right down the end of the scale, relatively speaking, when one could have regard to the snap-fit mechanism, the control bars and the blade ends and the spigots.  So that, as I have submitted to your Honours, was the correct test and the Full Court just simply did not apply that test.

GUMMOW J:   What do you say about paragraph 30 of the Full Court judgment, the fourth sentence?  Do you agree with the first three sentences of 30?

MR YATES:   I certainly agree with the first sentence, I agree with the second sentence ‑ ‑ ‑

CALLINAN J:   That it is sufficient that there is reason to suspect fraud, or reason to suspect knowledge?

MR YATES:   That is so, your Honour, that the design is registered.

CALLINAN J:   So that is enough reason ‑ ‑ ‑

MR YATES:   Reason to suspect that it is registered ‑ ‑ ‑

CALLINAN J:    ‑ ‑ ‑to suspect on the part of the infringer.

MR YATES:   Yes, that is so, your Honour.  And then the second sentence:

A finding of fraudulent intention is not conclusive.

We would agree with that.

There is no infringement if, despite fraudulent intention, the made article has a distinctly different shape or configuration –

we would agree with that because that seems to follow from the second sentence.  But then their Honours seem to turn more particularly to the question of fraud, to say whether they are mere disguises.  Once again, that reads back to paragraph 26, where their Honours take that as being dishonest concealment of reality of copying. 

McHUGH J:   There seems to be some inconsistency with their Honours’ approach to the question of onus as well.  In the last sentence in paragraph 31, their Honours say:

If K-Aire knew the design when making KA1 or KA2, the onus is on it to prove an absence of copying.

So the central point there is that they knew the design, but then when they go to paragraph 59, they say:

In circumstances where it was never put to Mr Rogers that the differences between KA1 and the Design were adopted in order to disguise the fact that KA1 was otherwise a copy of the Design –

then they introduced the China outlet and say –

it is clear that the China Outlet was the starting point for the design of KA1, it was not open to find that the omission . . .  was made in order to disguise the fact of copying.  K-Aire satisfied the onus of proving an absence of copying.

So they introduced a new subject matter, namely the fact that Rogers showed China outlet to Colebatch and said that he wanted to make a product like that, but he suggested changes.

MR YATES:   Your Honours, we would submit that that last sentence in paragraph 59 was, with great respect, paradoxical compared to ‑ ‑ ‑

GUMMOW J:   The last sentence of 51?

MR YATES:   Paragraph 59 of the Full Court’s reasons, yes.  One could ask, how could K-Aire have satisfied the onus of proving ‑ ‑ ‑

GUMMOW J:   There is only one sentence in 59.

MR YATES:   I am sorry, your Honour?

GUMMOW J:   There is only one sentence in 59.

MR YATES:   Paragraph 59, the last sentence:

K-Aire satisfied the onus of proving an absence of copying.

We submit that that is paradoxical having regard to the fact of the trial judge’s finding that Mr Rogers knowingly, consciously and deliberately based his design on the registered design and, apart from anything else, copied the snap-fit fittings.

McHUGH J:   Their Honours say because Mr Rogers was never asked about the fact, K-Aire satisfied the onus of proving an absence of copying.

MR YATES:   Yes.

McHUGH J:   He has the onus on that basis, and that seems to stem from the fact that China outlet was the starting point.

MR YATES:   Your Honours, there was a China outlet, but what the trial judge found was that the K‑Aire outlet, KA1 and KA2, were based on the registered design.  That was the design measurements between Mr Colebatch and Mr Rogers in March 1996.  They had come up with the design, produced a model, and then the technical drawings had to be prepared.  In doing the technical drawings, it is true that the computer‑aided drawings of the China outlet were used, but they were adapted to meet the requirements of the design concept that Rogers and Colebatch had come up with in March 1996.  If that is the intention in that paragraph, that the China outlet in fact was the design, and that it was just sort of modified in various ways, it really turns the trial judge’s finding on its head.  Those technical drawings were used, but they were adapted so they would end up with an article which, we would submit, was an imitation of the registered design, despite small differences. 

We would submit that simply because there was ultimately, in the evidence, no explanation as to why the chamfered lip and the ribs were omitted could not satisfy or discharge an onus of disproving copying.  Clearly, it was copied. 

May I take your Honours, finally, to paragraph 61 of the Full Court’s reasons.  In paragraph 61, their Honours say:

In making a finding that KA2 –

this is the second accused article –

was a fraudulent imitation of the Design, his Honour again disregarded the above matters and considered as a further matter only the changes that had been made to KA1 to yield KA2.

Your Honours, we submit that that is not what the trial judge did.  The trial judge deals with this in paragraph 380 on page 1206.  May I read that to your Honours.  He said:

On 31 October 1996 the plaintiff notified K-Aire that it believed the manufacture and sale of KA1 infringed its monopoly in RD2.  Thereafter certain changes were made to KA1 and these resulted in KA2.  I have already set out the nature of the changes which were made in the context of my summary of Dr Zockel’s evidence –

That is a reference back to paragraph 349, where his Honour deals with it in detail.  Then, by way of summary, he says:

The major change was the removal of one control bar.  Having regard to the circumstances in which the changes were made, the only issue in relation to KA2 is whether it has taken the overall distinctive appearance of RD2, or, put another way, whether the shape or configuration embodied in KA2 is distinctly different from RD2.  I do not think there is distinctive difference between KA2 and RD2.  To my mind, the removal of the control bar and the other changes made do not result in any significant change to the appearance (in terms of shape and configuration) of KA1.

So that is clear enough.  What his Honour is doing at the top of page 1207 was, having noted those differences, he still went back and compared KA2 to the registered design, which was his Honour’s task to do, and he asked the right question, whether it has taken the overall distinctive appearance of RD2.  His Honour concluded that it had.

So we would submit that the errors sought to be pointed out in paragraph 61 of the Full Court’s reasons simply do not exist.  His Honour clearly regarded, we would submit, the omission of the chamfered lip and the ribs, as well as other differences, but nevertheless applied the correct statutory test.

McHUGH J:   Have you finished your submissions on imitation?

MR YATES:   I have, your Honour.

McHUGH J:   You have, yes.  Does that finish your submissions?

MR YATES:   It does, your Honour, yes.

CALLINAN J:   Can I just ask you one question before you sit down?

MR YATES:   Yes, your Honour.

CALLINAN J:   Is it possible to take the view that the Full Court, in considering the matter – their eyes were differently impressed by it?

MR YATES:   No ‑ ‑ ‑

CALLINAN J:   Assuming that is the sole test, or ultimately the sole test, the effect upon the eye of the tribunal?

MR YATES:   Your Honours, we would submit, with great respect, that the Full Court did not apply its eye at all.  There is nothing on the face of their Honours’ reasons which would indicate that they carried out a visual inspection test themselves.

CALLINAN J:   They could have done that.  They could have substituted the impressions they formed ‑ ‑ ‑

MR YATES:   That is so.

CALLINAN J:    ‑ ‑ ‑ if they had done that for the primary judge.  There would be no reason why they could not do that.

MR YATES:   That is so, your Honour, but they did not ‑ ‑ ‑

CALLINAN J:   Are you saying they did not do that?

MR YATES:   They did not do it, and, had their Honours done it, I respectfully submit they would have said so and stated where they had disagreed with his Honour, particularly in relation to the finding that the features which gave the distinctive shape of the registered design had been copied, but their Honours did not say that.  We would submit that their Honours did not do it.  If your Honours please.

McHUGH J:   Yes, Mr Catterns.

MR CATTERNS:   May it please the Court.  Your Honours, if I could just outline a few of our propositions first before coming to the details of them.  May I remind your Honours that this case was fought, as it had to be at first instance and on appeal, on the basis that the law was as set out by the High Court in Malleys v Tomlin and approved by the High Court in B&D v Firmagroup.  So a fair reading of the judgment of the Full Court has to be in light of that fact.

GUMMOW J:   Well, if you had to answer an exam question, how would you set out, in sequential form, the reasoning in the Full Court?

MR CATTERNS:   Your Honour, quite simply.  Their Honours go to ‑ ‑ ‑

GUMMOW J:   I mean set it out, not reinvent it.

MR CATTERNS:   Your Honour means with the aid of the paragraphs that we see before us?

GUMMOW J:   Yes, beginning at paragraph 56.

MR CATTERNS:   Yes, your Honour, I would first have just drawn your Honours’ attention to a couple of the principles that their Honours set out earlier at page 1250, where they set out the Malleys v Tomlin ‑ ‑ ‑

GUMMOW J:   Paragraph?

MR CATTERNS:   Paragraph 23, I am sorry, your Honour.  They set out the Malleys v Tomlin test, which, I remind your Honours, was the basis on which the case was fought, including on appeal.  Then in paragraph 29, the paragraph our learned friends took your Honours to, their Honours referred to – in that last sentence that I think your Honour Justice Gummow drew attention to – the fact that – and there are very many cases, we will give your Honours a list – the fact that it is always held that the differences over the prior art that give you novelty are the ones that are crucial in determining the question of infringement.

GUMMOW J:   How do you decide that, Mr Catterns, without having a validity case in each infringement?  What is the purpose of getting a registration?

MR CATTERNS:   Your Honour, his Honour decided it and made a finding about it, and that finding is central to 378 ‑ ‑ ‑

GUMMOW J:   That is not the point, Mr Catterns.  Hopefully, there will be some infringement cases that are not novelty cases – that are not validity cases.

MR CATTERNS:   Your Honour, given, with respect ‑ ‑ ‑

GUMMOW J:   The Act, hopefully, contemplates that will happen.

MR CATTERNS:   But, your Honour, with respect, given 150 years of law, there never will be, because, whether or not they seek to revoke or rectify, any alleged infringer will give evidence as to the scope of the prior art.  And your Honour, if I may say so, with respect, has been in two Full Courts of the Federal Court that have said so:  Dart v Décor and the Fisher & Paykel Case.  Scope of the monopoly is determined in part with an eye over prior art.  It is not common general knowledge.  It is what was around in the prior art.  That has been the law for at least 100 years. 

Your Honour, that is the significance of the “J” rim in Malleys v Tomlin.  It is the “J” rim that gave the design novelty, as a novelty case in that case, and the reason the High Court held that that design was valid was the “J” rim, and the reason they held it was not infringed was the absence of the “J” rim.  It is utterly essential to every designs case, your Honour, and his Honour at first instance decided it on that basis.  He made findings as to what distinguished this from the prior art.  He held that two of the three things were missing.  His Honour held that the thing that was similar was enough to make it an obvious imitation – that is paragraph 361 – but it was not an obvious imitation because the two things were missing, the steeply chamfered lip and the vertical ribs.  That took it out of obvious imitation.

Now, if it is not an obvious imitation, what turns you into a fraudulent imitation?  There has to be some content to the idea of what is a fraudulent imitation, and that is, you have to look at the differences with a jaundiced eye.  There is something fraudulent about the differences.  Back to 1844 there is a hint of that, and, certainly, even in the UK cases in the 20^th century there is an idea of disguise, that there is something in it to disguise the copying.

Your Honours, Malleys v Tomlin picked up Rose v Pickavant which cited the earlier cases including the judgment of Justice Manisty and that was the law and Malleys v Tomlin became the law here. The Franki Committee - which I am sorry we did not refer your Honours to but we will give your Honours copies of in a minute – in recommending the changes that led to the re-enactment of section 30 looked at Malleys v Tomlin expressly and said “Let’s stick to that rather the changes that happened in the UK in 1949”.  So the Act was enacted in light of the Franki Committee recommendations keeping fraudulent imitation in it but making the concept correct as being one of monopoly and not copyright. 

Since then, the High Court has looked at it in B & D v Firmagroup and held you have to have disguise and, your Honour, that is what the reasoning of the Full Court at paragraphs 57 to 63 says.  What their Honours are saying in 57 – I would accept that there is an infelicity, to say the least, of expression in one aspect of paragraph 57 - your Honours note:

His Honour made the finding of deliberate copying and noted the obvious similarities . . . then considered whether it was –

I am leaving words out –

a shape or configuration distinctly different . . . He concluded that -

they were not.

In coming to that conclusion, however, he characterised as not distinctly different differences previously held . . . to be not so slight as to be insubstantial for the purposes of obvious imitation

So, your Honours, he has put in 362, they overwhelm the similarities and it is not an “obvious imitation”. In 378 they fail to. What is the difference? Copying per se. This is not a question of theft of property or punishment for copying. It begs the question, with respect, to say it is theft of property. This is a monopoly by section 25. You steal the property if you come within section 30. You do not if you do not. There is nothing wrong with copying, as Justice Parker said in Pugh v Riley.  Of course you are allowed to copy as long as you do not take ‑ ‑ ‑

GUMMOW J:   But you can infringe without copying.

MR CATTERNS:   Yes, your Honour, of course.  It is a monopoly. 

GUMMOW J:   Exactly.

MR CATTERNS:   It is a statutory monopoly.  You can infringe without copying.  We did copy.

GUMMOW J:   Now, before you get too excited, look at paragraph 60 in the Full Court’s judgement.  There is that third sentence:

But before there is fraudulent imitation, the differences must have been made ‘merely to disguise the copying’ (ie the imitation).

MR CATTERNS:   Yes, your Honour.

GUMMOW J:   What does that mean?

MR CATTERNS:   Well, your Honour, that is just a quote from Malleys v Tomlin.

GUMMOW J:   No, the phrase “(ie the imitation)”.

MR CATTERNS:   I think, your Honours, there they must mean the act of imitation, ie copying.  This is an area which has been bedevilled since 1842 by the idea of imitation connoting copying when it is a monopoly rather than a copyright.

McHUGH J:   They must mean there – the imitation must refer to the fraudulent imitation. 

MR CATTERNS:   Yes, your Honour, and the ratio of the Full Court’s decision, in particular paragraphs 58 to 63, is, for his Honour to get past his own finding in 362 that this was not an imitation, notwithstanding the similarities which would otherwise get him there, his Honour has to find that the differences which are good enough for 362 are disguise.

GUMMOW J:   Do you dispute what his Honour says at paragraph 363?

MR CATTERNS:   No, I do not – I will just check it, your Honour.  Not at all, your Honour.

GUMMOW J:   That is what we are talking about, “consideration of the knowledge and conduct of the designer”. 

MR CATTERNS:   Yes, your Honour.  Of course, we accept that ‑ ‑ ‑

GUMMOW J:   And then there are some adverse findings.

MR CATTERNS:   Yes, your Honour, and we do not challenge them.  Although so far as the copying goes, if necessary, we would want to show your Honours the nature of the copying, because this China outlet possessed a link bar at the ends, it possessed blades with axles, and, as the judge found, the computer drawings from the China project were adapted to fulfil Mr Colebatch’s requirements.  That adds up to knowledge and copying, we accept, but, as his Honour Justice Hayne put it, in a case of utter candour, if you are utterly candid and say, “Yes, I knew, yes, I copied, I knew it was registered and, yes, I copied”, you do not automatically infringe unless somehow – sorry, and if you are not an obvious imitation ‑ ‑ ‑

GUMMOW J:   Unless there was an imitation.

MR CATTERNS:   Yes, your Honour, but ‑ ‑ ‑

GUMMOW J:   There always has to be an imitation.

MR CATTERNS:   Yes, your Honour, certainly.

GUMMOW J:   What is the mental element if any, in this word “imitation”?

MR CATTERNS:   Your Honour, imitation is a question of looking purely at the copy ‑ ‑ ‑

GUMMOW J:   It is objective, is it not?

MR CATTERNS:   Yes, your Honour, but there is a mental element or there is an element ‑ ‑ ‑

GUMMOW J:   Though, to some ordinary readers, you might not think that.

MR CATTERNS:   Well, your Honour, imitation does not ‑ ‑ ‑

GUMMOW J:   If you say Cate Blanchett has been imitating Katharine Hepburn ‑ ‑ ‑

MR CATTERNS:   Oh yes, I beg your pardon, your Honour.  I respectfully agree.

GUMMOW J:    ‑ ‑ ‑ it suggests something has been going on up top.

MR CATTERNS:   Yes, your Honour, but may I remind your Honours, of course, that they are statutory phrases ‑ ‑ ‑

GUMMOW J:   Yes.

MR CATTERNS:   I mean, obvious imitation, fraudulent imitation, they are composite phrases.

GUMMOW J:   That is right.  We reach a situation that imitation is objective, contrary to any other possibility that ordinarily might suggest itself.

MR CATTERNS:   Yes, your Honour.

McHUGH J:   One of the problems with the language used in this section is that things are not fraudulent.  People are fraudulent. 

MR CATTERNS:   That is right. 

McHUGH J:   But the phrase applies to things, and it would seem to suggest that the imitation must be the result of fraud.

MR CATTERNS:   Yes, your Honour, and we accept that, as in his Honour Justice Hayne’s example, they are prerequisites and found here.  Knowledge of the registered design, to put it simply, and actual copying.  Fair enough, those two elements are present.  Are they enough?  We say they are not.  His Honour said they were enough.

CALLINAN J:   You say they did not produce an imitation.

MR CATTERNS:   His Honour found that, your Honour, we say, in 362, there is not an obvious imitation.  There is no fourth statutory category. 

GUMMOW J:   It is this word “imitation” which seems to have various possibilities about it, does it not, under the terms of section 30?

MR CATTERNS:   Yes, your Honour, but, in a sense, that has become a bit of a judicial gloss on it ‑ ‑ ‑

GUMMOW J:   You may be right.

MR CATTERNS:    ‑ ‑ ‑ because the statutory question is, is it a fraudulent imitation?

HAYNE J:   Are you dividing the expressions or are you using them as composite expressions?  Step one?

MR CATTERNS:   Your Honour, our submission is that the statute treats each one as the design – “obvious imitation” is a composite expression, “fraudulent imitation” ‑ ‑ ‑

HAYNE J:   If that is so, what is found in 362 does not take you too far, does it?

MR CATTERNS:   But, your Honour ‑ ‑ ‑

HAYNE J:   Paragraph 362 takes you somewhere if, but only if, 362 is a finding about perhaps imitation as a separate concept or some element that is replicated in the concept fraudulent imitation.  Now, what is the link you are drawing?

MR CATTERNS:   Yes, well, your Honour, going back to Justice Farwell, the courts, even though I have just submitted that these are composite phrases, the courts – eg, in Malleys – do pull out a separate idea of imitation per se.

McHUGH J:   No, but fraudulent imitation is a compound conception, but to some extent it involves an inherent contradiction.  It is not really an imitation at all, is it?

MR CATTERNS:   Exactly, your Honour, because it does not look to the eye like an imitation; otherwise you would have held it was an obvious imitation.  That is right, your Honour.  So what is the difference between the two concepts?  Fraud.  The difference is it has taken this out from being a, what to the eye would be an imitation, or an obvious imitation.  It does not look like that any more - and that is what 362 holds.  If it does not look like that, you can nevertheless ‑ ‑ ‑

GUMMOW J:   Well, wait a minute.  “It does not look like that” is a bit broad, is it not?

MR CATTERNS:   Sorry, does not look sufficiently similar, I beg your pardon, your Honour.

GUMMOW J:   Exactly.

MR CATTERNS:   It does not look sufficiently similar for it to be an obvious imitation.  You need something else to get – you can have differences which are – in other words, you put aside or diminish the differences in some way, and the way the High Court did in Malleys is to say they have been made to disguise the copying.  So we will not ‑ ‑ ‑

GUMMOW J:   But did they say that in Malleys? That is the question.

MR CATTERNS:   Yes, they did, your Honours, with respect.  And what I wanted to submit next – I will come to it of course, your Honour.  We want to submit that in doing so, their Honours are struggling to give content to the statutory phrase and they are developing the line of the English cases, which is that there has to be something about the differences that makes it fraudulent. 

McHUGH J:   But there may be three ideas floating around.  First of all, you have an imitation in the sense that it is a replica.  You have a Malleys Case where there is no imitation in any sense at all.  The difference is too substantial.

GUMMOW J:   Is that not what Malleys actually decided? 

MR CATTERNS:   Their Honours did say that, yes, of course they did, your Honour. 

McHUGH J:   And then you have this intermediate situation where it is not a replica and it is not so substantial you cannot say it is an imitation but it is, in effect, a partial imitation which is the product of fraud.

MR CATTERNS:   Yes, your Honour. 

GUMMOW J:   The question then is:  what do you have to show to show the fraud?  What is the content of the fraud?  You want to add an element in it, a necessary element, not just a possible element, not just an evidentiary element disguising the differences.

HAYNE J:   Disguising superimposed upon copying.

MR CATTERNS:   Yes, your Honour. 

GUMMOW J:   That is what this debate comes down to, is it not?

MR CATTERNS:   Yes, your Honour.  Essentially, our submission is the case turns on two things.

GUMMOW J:   Forget about us being bound by Malleys v Tomlin, Mr Catterns. 

MR CATTERNS:   Of course I am not submitting that, your Honour.

GUMMOW J:   It is a judgment of three members of the Court, not pellucid reasoning, if I may say so, and we have to look at it.

MR CATTERNS:   We have taken the case on that basis, of course, your Honour.  But we respectfully submit that what the cases show back since 1842 is the courts have been searching to give some content to the idea of fraudulent beyond mere copying plus knowledge because something ‑ ‑ ‑

GUMMOW J:   That is the question.

MR CATTERNS:   Yes, but that is what they have been trying to do, your Honour.  We respectfully submit when one looks at the cases, even the very first case ‑ ‑ ‑

GUMMOW J:   Had they done that by 1906?

MR CATTERNS:   Yes, your Honour.  I will make that good.  Could I ask your Honours to go to Rose v Pickavant because –this is in 1923 but it takes us back to the old cases, your Honour – 40 RPC 320 at 332.

GUMMOW J:   Yes, this is Lord Romer’s one.

MR CATTERNS:   Yes, your Honour, and it is a convenient source of the earlier cases.

GUMMOW J:   Yes.

MR CATTERNS:   At page 331 in ‑ ‑ ‑

McHUGH J:   Which page?

MR CATTERNS:   Page 331.  The case begins at page 320.  There is the quotation of the “fraudulent or obviously imitation thereof”.  May I remind your Honours that the 1842 Act just said “fraudulent imitation”.  It did not have a concept of “or obvious”.

GUMMOW J:   Have we been given the 1842 Act?

MR CATTERNS:   Yes, our friends did, your Honour.  It was the 1883 Act which ‑ ‑ ‑

GUMMOW J:   Did anything precede the 1883 Act?  Any committee?

MR CATTERNS:   We have not been able to find anything, your Honour.

GUMMOW J:   It is a big event, the 1883 Act.

MR CATTERNS:   Yes, it was, your Honour.  We have looked ‑ ‑ ‑

GUMMOW J:   There were patents as well.

MR CATTERNS:   Yes, of course, yes, your Honour.  We have not been able to find it, I am sorry.  We will try harder, but we looked at the pre‑1949 UK changes to see if there was any dissatisfaction with “fraudulent”, for example – I think it was the Banks Committee – we have not found anything, your Honour.  Your Honours, at 331, their Honours set out section 60 of what was then the 1907 English Act, and then at the top of 332, his Lordship says:

Nor do I think that the Defendants’ filler is an obvious imitation of the Design, that is to say, I do not think that by a mere comparison –

that is the visual comparison –

is obvious that the Design has been imitated . . . however, makes it also unlawful to apply a fraudulent imitation.  It is not very easy to define . . . an imitation may be made unconsciously and in ignorance of the existence of the Design . . . The phrase “obvious imitation” accordingly covers cases of fraudulent copying, though it is not confined to such ‑ ‑ ‑

GUMMOW J:   That is an important point, really.

MR CATTERNS:   Yes, your Honour:

cases, and it seems to be clear that the Legislature, in using the phrase “fraudulent imitation” is contemplating an imitation that is fraudulent without being obvious -

in other words, a broader case, where there are greater differences:

It would therefore seem to be contemplating a case in which the differences between the article and the Design are obvious and in which recourse must be had to extrinsic evidence to establish the fact of deliberate copying.

This sentence is crucial, your Honours:

In such a case the existence of comparatively unimportant differences from the Design sufficient to prevent the imitation from being obvious is not a fact of which the imitator can avail himself, and may indeed be one of the elements of the imitator’s fraud.

Your Honours, this case was cited, to Malleys v Tomlin.

HAYNE J:   Well, may be.

GUMMOW J:   May be.

HAYNE J:   Not must be, may be one of the elements.

MR CATTERNS:   Sure, your Honour.

GUMMOW J:   It is an evidentiary notion, is it not?

HAYNE J:   No, if you can demonstrate that it is being done to disguise I would have thought you are well ahead at the close of your case.

MR CATTERNS:   Certainly, your Honour, but the word “fraudulent” has to be given some content, as his Honour Justice McHugh said arguendo early.

GUMMOW J:   No, but you are telling us Mr Justice Romer gave it.

MR CATTERNS:   Yes.

GUMMOW J:   Now, where else did he give it?

MR CATTERNS:   May I go on, your Honours.  In Sherwood & Cotton, Justice Manisty says it is not an application of the design itself.

McHUGH J:   But line 40 is the crucial passage.

MR CATTERNS:   Yes, your Honour:

I think the word was introduced for the very purpose of meeting the case of an imitation, not an obvious imitation, but an imitation varied for the purpose really of perpetrating what is a legal fraud.  For instance, having before your mind and before your eye the design of another and introducing into your design some differences in order, if possible, to avoid coming within the Act of Parliament.

GUMMOW J:   Yes, but it is “for instance”, you see.

MR CATTERNS:   Fair enough, your Honour.  These are cases giving the concept content.  The earlier cases, your Honours, the Grafton v Watson Case and the Barran Case our friend took your Honours to, do not refer to disguise, but even those cases, your Honours, seek to characterise the differences, and the way they seek to characterise them is saying, “Have you come up with something that’s registrable yourself?”, for example.

GUMMOW J:   Yes, but just look at what Lord Justice Cotton says, about line 50, “if a man knowing” – it must mean this:

if a man knowing that the pattern is a registered design goes and imitates it, and does that without any sufficient invention on his part – 

now, that is the Malleys v Tomlin Case, is not it?

MR CATTERNS:   Yes, your Honour.  What is happening again is that their Honours are characterising the differences.  Are they inventive in some way or novel or original in some way, or by per contra, are they mere disguise?  Your Honours, I think that is all I needed to get to there, and we respectfully submit ‑ ‑ ‑

HAYNE J:   But take what Mr Justice Manisty says and invert it.  The designer has before the mind and before the eyes the design of another and ends with a product having some differences.  There can be then but two cases, can there not:  one, “I’m doing this because I think I’ve created something new or avoided the application of the Act”, or, “I don’t care, I’m going to do it”.  Now, where does the notion of disguise intrude itself?

MR CATTERNS:   Your Honour, the person knows about the registration and has been copying and it is not an obvious imitation. 

GUMMOW J:   How did it sort itself out in Rose v Pickavant itself?  It was held there was a fraudulent design, was there not?  Page 334.

MR CATTERNS:   Yes, your Honour, but with reasoning that drifts in the direction of passing off, I would submit, but that is right.

GUMMOW J:   It says:

The Defendants accordingly caused a filler to be constructed that exhibits the same general eccentricity of form ‑ ‑ ‑

MR CATTERNS:   “Practically indistinguishable”.

HAYNE J:   But not obvious.

MR CATTERNS:   Yes.

GUMMOW J:   Is that not the sort of finding that Justice Besanko was making in this case?

MR CATTERNS:   Well, his Honour, fair and square, made a finding of copying and knowledge, as I have acknowledged, but at 362 he held, notwithstanding the similarities as to the end features of the blades, et cetera – notwithstanding those similarities, there was not an obvious imitation.  So, your Honours, so far we are in front, and what is it that takes us out of our victory in paragraph 362?  Not appeal to the Full Court, and, of course, not by our friends, and not here.

So his Honour holds that the differences are more than slight differences and it is not an obvious imitation.  In other words, it is not an imitation from the eye.  May I remind your Honours that the three features that gave this design its novelty are set out in paragraph ‑ ‑ ‑

GUMMOW J:   Could we do that, Mr Catterns, before we break for lunch?  Can someone give us a list of cases on the 1906 Act and its English equivalent where a case of fraudulent imitation has been made out.  This is one of them – Rose is one of them.

MR CATTERNS:   Yes, your Honour.

GUMMOW J:   Are there others?  Do not answer it now.

MR CATTERNS:   I cannot think of any offhand.  We will double check, your Honour.  Of course, the Golf Ball Case was a good example of one where it was not, because the feature which gave the golf ball its novelty, which was the cross on the front of it, as the dots appeared, was not taken in the alleged infringement.  I see the time, your Honour.

McHUGH J:   Yes.  We will adjourn until 2.15 pm.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.19 PM:

McHUGH J:   Yes, Mr Catterns. 

MR CATTERNS:   May it please the Court.  Your Honours, I would like to try and reconcile the concepts of obvious and fraudulent imitation, and imitation ‑ ‑ ‑

GUMMOW J:   Before you do that, can I take you to the first edition of Halsbury, published in 1913, volume 27, page 739, edited by one of the Fletcher Moultons – I do not know which one of that dynasty.  It says:

The use of the phrase “fraudulent or obvious” would suggest that a less degree of similarity will suffice if the defendant has been guilty of bad faith.  It is not, however, sufficient to show bad faith, unless the defendant has imitated some feature which is protected by the registration.

Now, that is not indicating disguising as a necessary element.  I do not have the first edition, but in the second edition of Edmonds and Bentwich on Designs, published in 1908, at page 151, they sum up all these cases in this sentence:

A “fraudulent imitation” is [an] imitation with knowledge that the pattern is a registered design and without any sufficient invention on the part of the imitator.

That seems to have been the understanding among the cognoscenti at the time of the 1906 Act.

MR CATTERNS: Yes, your Honour. I have a submission I think that accommodates what your Honour has just put to me. But we have a further submission, which I will make later, which is that so far as the legislature was concerned here, when it re-enacted section 30 in 1981, with amendments, it was expressly referred by the Franki Committee to the decision in Malleys v Tomlin. The Franki Committee considered whether there ought to be an amendment to our Act to change the expression in section 30 and recommended not in light of Malleys v Tomlin, and the legislature appears to have followed that recommendation.

McHUGH J:   That does not help you, does it?  This is the 1906 Act we are concerned with.

MR CATTERNS:   No, your Honour, but this section was looked at again and amended in 1981.

McHUGH J:   Yes, but this case is governed by the 1906 Act, is it not?

MR CATTERNS:   Yes, I am sorry, your Honour.  It is the 1906 Act.

McHUGH J:   Yes.

MR CATTERNS:   I am not talking about the new Act that has come in.

McHUGH J:   No, I know.

MR CATTERNS:   The present section, your Honour, was amended in 1981.

McHUGH J:   Right.

MR CATTERNS:   The section of the 1906 Act was amended in 1981.  May I show your Honours those words, but first attempt to accommodate the old cases and the books which refer to them.

McHUGH J:   So it is not merely 32B that was added in 1981, but you say section 30 itself ‑ ‑ ‑

MR CATTERNS:   Was amended.

McHUGH J:   To add?

MR CATTERNS:   To change the concept from being copyright in a design to a monopoly in a design upon the recommendation of the Franki Committee, but the Franki Committee, in making recommendations about ‑ ‑ ‑

GUMMOW J:   Well, wait a minute.  Even before that, paragraph (b) had gone in, had it not, after a case called Hella‑Australia or something like that, about importing into Australia.

McHUGH J:   I was in that case, yes.  I remember that, yes.

GUMMOW J:   Justice Handley was in it too.

MR CATTERNS:   I think your Honour is right, with respect.  Well, perhaps if it is convenient to hand your Honours the Franki Committee report now, and then I could come back, if I may, to his Honour Justice Gummow’s point, tying together the other threads, I hope.

I am sorry, we did not put this in our outline, which we should have, your Honours.  At page 28 of the report in paragraph 126 – this is the 1973 report of the Franki Committee – there were several reports of the committee chaired by his Honour.

GUMMOW J:   Yes, Act No 108 of 1967.  That is the sequel to the case Justice McHugh was in.

MR CATTERNS:   Thank you, your Honour.  At page 28 ‑ ‑ ‑

GUMMOW J:   See, that is the section they set out?

MR CATTERNS:   Yes, your Honour, I do not disagree for one moment.  Your Honours see there the phrase that is used in the section was:

A person shall be deemed to infringe the copyright in a registered design – 

and, of course, that is not a very apt phrase to use when it is a monopoly and not a right dependent upon copying, but at 127 the committee notes that the UK Act had changed, as our friend pointed out this morning and indeed in his written submissions, and your Honours see that the UK section has – the third‑last line:

a design not substantially different from the registered design – 

The committee said in 128:

We consider that the Australian provisions – 

corresponding to the UK pre‑1949 – 

are preferable . . . and recommend that, subject to the amendments referred to below, they should be retained in any new legislation – 

because it is a wider protection in this very point, your Honours.

Section 30 refers not only to ‘an obvious imitation’ . . . that is applied to any article in respect of which the design is registered, but also to any ‘fraudulent imitation’ . . . ‘obvious imitation’ are . . . broadly equivalent to the . . . United Kingdom Act, but the words ‘ fraudulent imitation’ have no equivalent in the United Kingdom Act.

Section 30, in its previous form, was considered . . . Malleys . . . appears in section 30 both before and after the 1967 amendment –

your Honour mentioned, then there is the famous passage, your Honours, from Malleys:

We are satisfied that the broad protection afforded by section 30 is appropriate and should remove any idea that if a design is copied infringement can be avoided by attempting to disguise copying by making apparent and not insubstantial differences.

GUMMOW J:   That is putting it around the other way, that sentence, is it not?

MR CATTERNS:   I see your Honour’s point, with respect.

GUMMOW J:   It is saying you may have attempted to disguise, but do not think that you are necessarily going to get away with it.

MR CATTERNS:   Fair enough, your Honour.  I think that is a poor paraphrase of what Malleys says, I accept.

GUMMOW J:   Well, it is what the committee thought and said.  Do not forget Justice Franki was his counsel in Malleys, too.

MR CATTERNS:   Yes, I had noted that, your Honour, with respect.  But then, your Honours, in 131 ‑ ‑ ‑

GUMMOW J:   Successful counsel, too.

MR CATTERNS:   Exactly, your Honour.  Well, we are all righting our various wrongs in our own ways, your Honour.  And we do not have the Privy Council, your Honour, if your Honour will forgive that impertinence.

Then, without taking your Honours to it in detail, paragraph 133 deals with this question of whether it should be called a monopoly or a copyright.  Your Honours see the last words in paragraph 130, which  suggested and which has not been enacted ‑ ‑ ‑

McHUGH J:   Yes, I wondered why you did not mention that.

MR CATTERNS:   I did not mean to leave it out, your Honour.  I was skipping ahead, I am sorry.  Your Honours know that that did not occur.  But since then, in the B & D v Firmagroup Case, which ended up being decided on the holding that the design only protects one specific, particular and individual appearance, this Court has cited with approval what Justice King said, applying Malleys v Tomlin.  I was going to go to that.

Our submission, and we submit it accommodates the early cases and the early texts, is this.  An obvious imitation is a copy or an imitation apparent to the eye in an objective sense, not involving copying.  So it is an imitation apparent to the eye.

GUMMOW J:   Some of the cases in the 1890s were jury trials with special juries, so that would just go to the jury.

MR CATTERNS:   I suppose so, your Honour.  I have not seen a report of any instruction to the jury, but maybe some of the old ‑ ‑ ‑

GUMMOW J:   They are pretty brief. 

MR CATTERNS:   Yes.  So, your Honours, that is the first, an imitation apparent to the eye.  Fraudulent imitation is either not apparently an imitation to the eye or, at least, less so.  But we get a broader protection, you can still infringe, to use the words of Justice Manisty I think, if the differences are not a fact of which the infringer can avail himself.  In other words, as I have submitted, you can put those differences aside.  Now, why are the differences not a fact of which he can avail himself?  Malleys, in its facts, says because they are mere disguise.  Justice Romer, in Rose ‑ ‑ ‑

GUMMOW J:   Malleys in its fact says what Justice McHugh was putting to you before lunch – no “J” rim, no essential feature or the omission of an essential feature, no imitation of any species of imitation.

MR CATTERNS:   Yes, this is precisely what I am coming to, your Honour.

GUMMOW J:   Or the omission of an essential feature.

MR CATTERNS:   Yes, your Honour.

GUMMOW J:   No imitation.

MR CATTERNS:   Yes, your Honour.  That is really what I am trying to ‑ ‑ ‑

GUMMOW J:   With any species.

MR CATTERNS:   We are trying to put a coherent thesis together that accommodates that, put to us by several members of the Court.  But at the fraudulent imitation level – e.g. in Malleys – one can say it is not apparently an imitation to the eye because of differences of which you cannot avail yourself.  Why can you not avail them?  Either because they are disguised or, as in the Sherwood Case, Justice Manisty, just the mere fact that you knew they were – that was, in a sense, what special leave was granted to consider, whether it needed to be here – whether it needed to be disguised, or mere knowledge.

Now, in the Rose v Pickavant Case and in the Sherwood Case, the fact that you knew that it was registered led to the differences.  Those differences were held to be a fact of which the imitator could not avail himself.  Now, we would respectfully submit, and some of the earlier cases say, “You haven’t come up with your own new design.  They’re not real differences”.  They’re colourable, to use the old jargon from the copyright cases.  Let us leave disguise out of it.  It is just a question of colourable.  But it is a way of characterising the differences.

But what happened in Malleys was that their Honours said, “Even if, on his Honour Justice McLelland’s findings, the Chief Judge in Equity, we put aside these differences, nevertheless, it’s still so different that it’s not an imitation apparent to the eye”.  So you are just far enough out that differences are sufficient.

The way the case was decided in the Full Court here was that his Honour Justice Besanko had held that this was not an obvious imitation.  In other words, it was not an imitation apparent to the eye, but his Honour did not attempt to put aside the differences which had led to that on a disguised theory or on any other theory.  He could not have put it aside on the Malleys v Tomlin disguise theory, and he could not have even put it aside on the knowledge of the registered design theory because it was not suggested to him, the designer, that that is why these differences were there, and it could not have been because the differences had nothing to do with disguising, copying or avoiding infringement; they had nothing to do with knowledge.

GUMMOW J:   This expression “colourable imitation”, you mentioned that.

MR CATTERNS:   Yes, your Honour, it is my own phrase from copyright cases.

GUMMOW J:   Well, it comes out of a jury case in Gordon and Munro v Patrick (1895) 12 RPC 22 tried by Mr Justice Cave and a special jury. The defendants used to work for the plaintiff and it was pretty clear that there were some grounds to start off with, but the charge and the result was a finding that there was a colourable imitation of the plaintiff’s design. That appears at page 24.

MR CATTERNS:   Your Honour ‑ ‑ ‑

HAYNE J:   Was that a special verdict or were questions asked or a general verdict returned?

GUMMOW J:  

If they are substantially the same, then the Plaintiffs are entitled to recover, if they are substantially different, then they are not.  That is what you have to decide.

The jury decided that the Defendants’ goods were a colourable imitation of the Plaintiffs’ design -

and off they went to lunch.

MR CATTERNS:   So your Honour, I suppose ‑ ‑ ‑

HAYNE J:   “Well, gentlemen, you will do your duty; I’ve done mine”, I think the judge finished.

MR CATTERNS:   At least his Lordship did not say, “All the best”.   But your Honours, I just – I do not wish to supply a non‑statutory phrase to add to the statutory phrase, but the point of fraudulent imitation, as the Franki Committee said, is you get a broader protection than the obvious imitation which is apparent to the eye by somehow or other, because of knowledge, discounting the features.  That is what his Honour failed to do, that is what his Honour could not have done, whatever the thesis is, whether it be disguise or avoiding infringement, designing around.  Whatever that thesis is, his Honour – I beg your pardon, discounting differences.

We would respectfully submit that the mere designing around or being aware of a design and introducing differences to avoid infringement is not a bad thing or theft.  That is precisely why in the field of monopolies such as patents and designs, there is a public register and there is nothing wrong with avoiding infringement – you are either right or you are wrong, but there is nothing wrong with avoiding infringement, and that is exactly what happened in the case before Justice Parker, Pugh v Riley.  They successfully designed around it.  Sometimes you do, sometimes you do not.  And in Malleys v Tomlin, Malleys successfully designed around it.  Fisher v Fabtile, with every element of fraud conceivably present, they successfully designed around it.

McHUGH J:   Why is not a possible meaning of the expression “fraudulent imitation” that there is a conscious imitation, knowing or suspecting that the design is registered or registration is pending?

MR CATTERNS:   Your Honour ‑ ‑ ‑

McHUGH J:   It has to be an imitation because otherwise, if there is no imitation in the sense that you just cannot say it is an imitation, then the case fails on Malleys.  But what if you consciously imitate?  That is, you take somebody else’s work, does not matter how it ends up, so that you can say it is still some sort of imitation of it, and you have done it consciously, knowing or suspecting that the design is registrable or the application is pending ‑ ‑ ‑

MR CATTERNS:   Your Honour, we submit that all of these cases say that that knowledge has to somehow impact on the design, on the differences.  It cannot just be – you are not being punished for knowing of the design because, as your Honour pointed out arguendo, you can have a section dealing with knowing infringement.  There are sections in the Copyright Act that have parallel importation.  Section 37 requires knowing certain elements.  So we submit that it is crucial that the knowledge somehow has an impact on what is otherwise not an imitation.  It is not an obvious imitation.  Then the court having found that this person has the knowledge your Honour has just put to me, then looks at the differences with a jaundiced eye.  In short, they are not differences of which the imitator can avail himself.  That is what “fraud” means.  It has to mean at least that.  Whether or not it is ‑ ‑ ‑

GUMMOW J:   Halsbury equated it with bad faith.

MR CATTERNS:   But, your Honour, if it means making differences to avoid infringement, it must mean there is more than ‑ ‑ ‑

GUMMOW J:   They said it is not sufficient to show bad faith unless there has been an imitation of some feature which is protected by the registration.  Is that not what Justice McHugh is putting to you?

MR CATTERNS:   Your Honour, we respectfully submit that ‑ ‑ ‑

GUMMOW J:   But within those parameters, a less degree of similarity will suffice.

MR CATTERNS:   In other words, your Honour – I want to come to the findings soon, your Honours.  We agree that less similarity or more difference will suffice but we submit that the bad faith has to relate to the differences that have led to there being a lesser degree of similarity.  The mere awareness of a registered design cannot in itself get you there.

GUMMOW J:   No, of course not.  It has to be an imitation.

McHUGH J:   Yes, but provided you can say it is an imitation, even though it is not an obvious imitation, and somebody has consciously sought to appropriate somebody else’s intellectual property, why is that not a fraudulent imitation?

MR CATTERNS:   Because, your Honour, the whole idea of statutory monopolies with registers is you are allowed to go – that marks out the boundaries of the statutory monopoly, and it is not bad faith to avoid a patent infringement by leaving out one integer, and this is, as Sir Owen Dixon said, a lesser idea than a patent, and the idea ‑ ‑ ‑

GUMMOW J:   That is why we have notions of essential integers, is it not?

MR CATTERNS:   Yes, your Honour.  Your Honour, may ‑ ‑ ‑

GUMMOW J:   Does that idea not flow through here?

MR CATTERNS:   Yes, it does, your Honour.

GUMMOW J:   Into that paragraph in Justice Besanko at 378.

MR CATTERNS:   Well, your Honour – but I need to get to 378 and show where his Honour went wrong getting there.  May I take your Honours to 355 on page 1201.  I do respectfully submit that it is clear that in determining what are essential features – if I may just import another phrase – or the crucial features of a design for the purposes of infringement, the features are novel.  It is the novel features.  Of course we look at the thing as a whole, but emphasis is placed upon the novel features.  There is, with respect, a wonderful discussion of that by Justice Fullagar in Fisher v Fabtile, and he points at it because the reason for that is if we just happen to have a square box or louvred blades, we are merely using that which is everybody’s right to use.  It is common to the field – I think it is Rosedale v Airfix.

Your Honours, applying that analysis, which it was common ground was the correct law, his Honour Justice Besanko, in 355 held – and his Honour quotes from Dart v Décor earlier – so he compares the two designs that our learned friend took your Honour to, RD1 and 105504 and says that:

the differences of shape and configuration which one immediately notes are:

1.        The shape and configuration of the end parts of the blades –

Now, your Honours, I am holding up – this is a KA2 blade.  The end parts of the blades, we are talking about the little spigots – the two of them, and in the case of the KA2 we have only got one at one of our ends –

and the shape and configuration of the receiving points in the outer frame –

that is the little notch that the blades slot into –

and control bars –

that is the little notch in the control bar, which we see in the registered design.  I will take your Honours to it -

In fact, to my mind, it is this difference which is the most eye‑catching on first examination –

So what his Honour has found as the first difference over the prior art is the detail of the design of the ends of the blades and the receiving points in the frame and the control bars.  Now, your Honours, they do not get a monopoly in the idea of linking it by a bar.  In fact, the China project had a bar, and there was never any suggestion that that was a copy, so Mr Rogers already had parallel blades linked by a single bar.  Your Honours, I will hand it up in a while, if I may, but the blade is exhibit P20 which looks remarkably like our KA2 blade.  It has spigots.  It does not have the elegant conical flaring of our learned friend’s.  It has a little step in it to allow for the bar, and it has a bar at one end, and it has a rectangular bar with little slots in it to take the spigot on the blade.

Your Honours, that is the feature that our learned friends focused on, and the High Court says in B & D v Firmagroup they do not get a monopoly on a method or principle of construction of having a bar at the end to link your blades ‑ ‑ ‑

GUMMOW J:   Of course, they do not, Mr Catterns.

MR CATTERNS:   Your Honour, that is why we have to look at the detail.  So, your Honours, that is the first one, but the second two features, your Honour, that relates to the end of the blades.  The second is:

The chamfered inner lip or overhang on the top of the frame of the blade box –

and if I could show your Honours that.  In volume 2 – it is hard to see by the eye, but it was explained.  At page 541 the Court’s eye can be instructed as to design matters.  At 542, your Honours, we can see at either end there is a little hatched section with a little diagonal at the very end and that represents an overhang.  Your Honour will not find it in our product, that is the difference.  There is this overhang and your Honours can see it again perhaps at 545 where above the bar at the top right‑hand end where the blades end, there is to the trained eye it can be seen there is a little verandah overhanging which protects the bar from the wind, from the air coming through.

Now, your Honours, the reason that was a distinctive feature – and that was based on the evidence of Professor Russell – is because otherwise we are just talking about a simple rectangle.  So far as the frame and the blades go, they were well known as the design that our friends have showed your Honour.  They already had a square box in the case of RD1, and they both had parallel sets of bars, and RD1 did not have moveable bars.

Then, your Honours, the vertical ribs on the outside of the blade box is the third of the features and we can see them, for example, at 546.  In the top picture there are four vertical ribs, otherwise so far as the frame goes, all we would be seeing is a plain square, otherwise we have plain blades, but the ends of the blades are part of what gives us its novelty.

Your Honours, it is going to be a very narrow scope.  It must be, we would respectfully submit.  Then his Honour holds in 356 that the features which his Honour had identified, and particularly the first, but not exclusively, your Honours:

give RD2 a distinctive shape and configuration compared with the relevant prior art.  The differences are substantial and are not differences in immaterial details.

Now, that is wording evocative of Malleys, where their Honours used the phrase “substantial difference of a material kind”.  These are crucial differences, his Honour held, for the purpose of novelty.  Then his Honour looks at infringement, if your Honours would go to 360.  He says: 

I have already set out the relevant principles in relation to a fraudulent imitation –

where his Honour quoted from Malleys v Tomlin –

An obvious imitation is an imitation which is not the same, but is a copy apparent to the eye notwithstanding slight differences.  It matters not whether the designer of the accused article knew of the registered design.  The question is one of substance and is to be considered having regard to the essential features of the design.

Then his Honour sets out a number of differences, and these differences would not prevent him from finding that KA1 is an obvious imitation.  So his Honour would have held that we were an obvious imitation, because of what was happening at the ends of the blades, even despite the various differences that we had at the ends of the blades, and there was also, in (3), some chamfered corners.  He lists seven differences which, jointly and severally, are not enough to take it out of being an obvious imitation. 

So far, your Honours, we lose.  It is going to be an obvious imitation.  But, in 362 – and this is why we won the appeal, your Honours, rightly, we submit: 

That leaves as differences between RD2 –

the registered design –

and KA1 –

our product –

the steeply chamfered inner lip on the top of the frame of RD2 and the vertical ribs on the outside of the frame of RD2.  These features are not present in KA1.  Are these two differences merely slight differences, so that KA1 is an obvious imitation of RD2?  Although there are a number of similarities between RD2 and KA1, I have reached the view that the differences, particularly the absence in KA1 of the steeply chamfered inner lip on the top of the frame, are more than slight differences.  I do not think that KA1 is an obvious imitation of RD2.  It follows that KA2 is not an obvious imitation of RD2.

A fortiori, because it has only one bar at the end and it has a completely different way whereby the little spigot goes into the bar.  So, your Honours, it is not an obvious imitation, and there is no separate statutory category of “not an imitation at all”.  Then the question is, for it to be fraudulent imitation, how can we put aside these differences? 

His Honour then finds, fair and square, at page 1204, the elements of copying and knowledge.  We do not challenge those.  But may I just remind your Honours about the history of the product, which appears in paragraph 122, to put it shortly, on page 1156.  These were Mr Colebatch’s instructions to the designer.  He wanted: 

1.        The incorporation of a cruciform or cross into the design to support the blade packs. 

The original China project blade packs had little things on the outside of them that let them clip into each other, whereas the prior art had a cross and they sat on it. 

2.        The modification of the blades so that they were of even thickness.

3.        A change to the position of the pivot point of the blades in order that the blades protruded below the ceiling. 

that was present in the registered design 105504, we say –

4.        The addition of a second link bar to connect the blades.

Mr Rogers was against the blade being of even thickness, and then there is discussion of the blades protruding, but if your Honours would look at 127:

In preparing the technical drawings, Mr Rogers used the computer drawings which had been produced in relation to the China outlet and adapted them to incorporate the requirements for the proposed outlet.

So the differences we have already seen are not a result of any designing around; they were already in his product.  Returning, if I may, to his Honour’s findings on this topic, his Honour finds that we had reason to suspect ‑ ‑ ‑

HAYNE J:   That is a proposition that lends a lot of weight to a number of unstated premises about what 127 entails in using CAD ‑ ‑ ‑

MR CATTERNS:   Fair enough, your Honour, but the two particular differences that we have that took us out of obvious imitation were the absence of two things.  It is a special case already, but the thing he was using never had the chamfered overhang like a veranda, and we never had those vertical ribs because we use a different moulding technique.  There is no dispute about that.

Your Honours, in 366 there is the reason to suspect the design, and then there is access for Mr Rogers over 370 to 374, but then in 375 there is his Honour’s finding about the instructions, similar to other products, the disagreement with some of the requirements, then, your Honours, crucially, two of Mr Colebatch’s requirements, namely, the requirement that the blades protrude below the ceiling and the addition of a second control bar are also features of RD2.  And may I remind your Honours that our KA2, which is the one that is the crucial one because we changed it after a letter of demand, only has a single bar.

Then his Honour holds, and we do not challenge it, he “knowingly, consciously and deliberately based his design on the plaintiff’s outlet director part”, and then his Honour sets out the matters and rejects Mr Rogers’ denial that he knew that they were a “large player”: 

Secondly, Mr Colebatch’s instructions to Mr Rogers were to design a product which looked like other products in the market.  Some of Mr Colebatch’s specific requirements are features of RD2.  Thirdly, there are substantial similarities between Mr Rogers’ design and RD2.  The similarities between KA1 and RD2, particularly in relation to the snap fit mechanism, the control bars and the blade ends including the spigots, are obvious –

reminding your Honours, his Honour would have held that there was an obvious imitation in light of those similarities, but for these two differences.  He rejects Mr Rogers’ denial about the snap fit, and then, your Honours, in 378, there has to be some reasoning whereby his Honour says that the differences that were good enough for 362 are no longer good enough.  His Honour does not have that.  That is the ratio of the Full Court, precisely.

GUMMOW J:   Well, can I just take you back to this disguising question, to paragraph 130 of the Franki Report, that first sentence there, which is a bit of an embarrassment for you:

We are satisfied the broad protection afforded by section 30 is appropriate and should remove any idea that if a design is copied infringement can be avoided by attempting to disguise copying by making apparent and not insubstantial differences.

Right?  Then can we go to Turbo Tek (1989) 23 FCR 331 – which is on your list, I think – at page 349, about point seven, the paragraph beginning, “The cases we have cited”.

MR CATTERNS:   Yes, your Honour.

GUMMOW J:  

Having performed that exercise, we are satisfied that the differences between the appellants’ design and the respondents’ article are not subtle.  They are apparent and substantial.  The question is, therefore, whether they are, nevertheless, mere disguises ‑ ‑ ‑

MR CATTERNS:   Yes, your Honour. 

GUMMOW J:   That is consistent with the Franki approach to it, is it not?  Then if one goes over to 350, about point three, there is a reference to the second Justice Fullagar in Fabtile:

Fullagar J, whose reasoning in the Fabtile case has received general acceptance, stated the relative importance to be attached to fraudulent conduct on the one hand and production of a copy on the other when he said in substance (at 3619) that even if every feature of the defendant’s design was adopted solely in order to disguise a taking from the plaintiff’s registered design, it would not be sufficient to show fraudulent imitation if the resultant design was not truly an imitation.

Is that not how disguising gets into the equation?

Even if every conceivable element of fraud was present, the fraudulent and disguised copying must result in a copy.

MR CATTERNS:   But, your Honour, that is how one cannot infringe when one has disguise.

GUMMOW J:   You want to turn it around the other way.

MR CATTERNS:   Yes, precisely, your Honour.  Then if it is not an obvious imitation and you are saved because of certain differences, you have to have disguise so that you can put aside those differences.  That is what they are saying there, your Honours.  In some cases it is so far different that it is not an imitation at all.

GUMMOW J:   Exactly.

MR CATTERNS:   And no amount of fraud can get you there.  Well, this is an intermediate case, your Honours.  This is a case where ‑ ‑ ‑

GUMMOW J:   No, every amount of fraud can get you there.

MR CATTERNS:   Well, your Honour, no amount of fraud can get you there in Turbo Tek or Malleys because it is not an imitation.  Well here, your Honour ‑ ‑ ‑

GUMMOW J:   That is right.

MR CATTERNS:   Exactly, because you are outside the scope of the statutory monopoly.

GUMMOW J:   That is right.

MR CATTERNS:   What his Honour held in paragraph 362 is “this is not an obvious imitation”.  So his Honour had to be able to put aside those two differences.  Now, if we are wrong about disguise being the thing, although this case supports us on that, as they all do, all the Australian cases, we submit, there has to be some way that the differences which were good enough for 362 are not good enough for 378.  Your Honours, that is what we do not find in 378 because feature one ‑ ‑ ‑

GUMMOW J:   The postulate is that a lesser degree of similarity will suffice here.

MR CATTERNS:   If whatever fraudulent ‑ ‑ ‑

GUMMOW J:   Exactly.

MR CATTERNS:   Yes, your Honour.

GUMMOW J:   So we are going around in circles.

MR CATTERNS:   Yes, your Honour, and that depends on what “fraudulent imitation” means.  That is why we are here, as I understand it.

GUMMOW J:   I know.

MR CATTERNS:   But, your Honour, a lesser degree will suffice if you have made the changes to disguise - if the differences can be somehow characterised as fraudulent.  Whether we call it disguise or, what Justice Manisty called it, avoiding infringement, but you have to be able to characterise the differences.  Well, his Honour does not do that.  The similarities at the end of the blades, feature No 1 at paragraph 355, were not good enough to outweigh the differences for the purposes of 362.  We say what is different in 378?  It cannot be just the mere fact of copying with knowledge.  That copying with knowledge has to have done something to the differences. 

HAYNE J:   In 378 there are comparative statements made.  What do you say is the significance of the comparisons drawn in the last, is it two sentences of that paragraph?  Are they relevant, irrelevant?

MR CATTERNS:   Your Honour, it is a very relevant comparison, your Honour, crucial, to compare the differences – and his Honour lists them fairly – and ‑ ‑ ‑

HAYNE J:   His Honour identifies certain features as giving RD2 its distinctive appearance.

MR CATTERNS:   Yes, your Honour.  Well, there are two errors.  First, in paragraph 355 he said that those very features were but one of three ‑ ‑ ‑

GUMMOW J:   Just a minute.  You might as well – perhaps you should give his Honour the credit at 378 for having referred to a particular passage in Turbo Tek at 349, which I took you to a few minutes ago.

MR CATTERNS:   Yes, your Honour.

GUMMOW J:   You have to read that in.

MR CATTERNS:   Yes, your Honour, but his Honour has imported a non‑statutory test which the Full Court in Turbo Tek drops ten lines later.  They say:

an infringer may succeed because, although he has fraudulent intention, he does make an article, the shape or configuration of which is distinctly different – 

then following Malleys, at the bottom of the same page, 349, the court says:

The allegedly infringing article may take the idea but there is no infringement if there is a substantial difference of a material kind between the two shapes – 

and his Honour has held that in 362.  So, your Honours, we should win on Turbo Tek and Malleys v Tomlin on 362 unless in 378 his Honour puts aside that finding of 362.

HEYDON J:   Do you say “more than slight” equals substantial?

MR CATTERNS:   Yes, your Honour.  His Honour said the same thing – he treated them in the reverse way in 356, your Honour.  This is versus the prior art, but the same point applies, I submit, your Honour.  Picking up what his Honour Justice Heydon has just raised with me ‑ ‑ ‑

GUMMOW J:   But this reference to “more than slight” comes out of the cases, does it not, dealing with “obvious copy”?

MR CATTERNS:   Yes, your Honour, Malleys v Tomlin.  It is the phrase from Malleys v Tomlin.

GUMMOW J:   Yes.

MR CATTERNS:   So, your Honours, it is not an obvious imitation, and his Honour has decided that by deciding these are the three ‑ ‑ ‑

GUMMOW J:   But you then want to conflate it.

MR CATTERNS:   Au contraire, your Honour, his Honour did.  His Honour holds ‑ ‑ ‑

GUMMOW J:   Distinctly different.

MR CATTERNS:   That is not the test, your Honour.  Where is that in the statute, if I may rhetorically ask it?  Their Honours go on to say, “substantial difference of a material kind”, which is what is said in Malleys v Tomlin.  “Distinctly different” is not the statutory test, I submit. 

HEYDON J:   Is not “distinctly different” another way of saying “no imitation”?

MR CATTERNS:   Perhaps so, yes, your Honour, but there is no imitation ‑ if you are - “no obvious imitation”, it is not an imitation.  There is no false category.  Their Honours in Malleys v Tomlin did not create a fourth category.  They said, “Notwithstanding the fact that we put aside these differences as disguised, nevertheless, there is not an imitation”.  You cannot find fraudulent imitation because there is no imitation at all.

HEYDON J:   That is true, but Mr Justice Besanko is coming to a different factual conclusion at 378 in this case.

MR CATTERNS:   Yes, your Honour, but he is coming to a different factual conclusion from that which he came to in 362.

GUMMOW J:   Did the Full Court take this up?

MR CATTERNS:   That is their ratio, your Honour.

GUMMOW J:   Really?

MR CATTERNS:   Yes, your Honour.

GUMMOW J:   You may be right.

MR CATTERNS:   May I just finish what I wanted to say, if your Honour does not mind, on 378 and then make what I have just said good.

GUMMOW J:   You may have achieved the first day of creation out of chaos if you ‑ ‑ ‑

MR CATTERNS:   I will do my best, your Honour.  I respectfully submit it will not – but if your Honours would not mind looking at 378.  He refers to the differences and they are the same differences:

However, the features of shape and configuration – 

at the blade ends – 

snap fit mechanism, the control bars and the blade ends . . . (despite small differences) – 

which is a reference to 361 – 

have been copied.

Now, your Honours, he is comparing there precisely the same matters as he compared for the purposes of 362 and comes to a different conclusion.

HAYNE J:   But then does your argument come to this:  no obvious imitation, therefore no imitation, therefore no fraudulent imitation?  If that is so, you have just written fraudulent imitation right out.

MR CATTERNS:   No, your Honour.  We say there is no obvious imitation, and all of the cases since 1844 have said you have to do something.  The concept of fraudulent imitation says do something to those differences.  You cannot avail yourself of those differences for some reason.

HAYNE J:   But you accept, therefore, do you, that the argument that proceeds “no obvious imitation equals necessarily no imitation” is flawed?

MR CATTERNS:   Yes, your Honour, and I have been hesitant to – that is why I have been resisting a fourth category because that is not what their Honours did in Malleys.  It may well be that all the fraud in the world is present and there is still not an imitation.  Well, that is an interesting case, but in the present case ‑ ‑ ‑

McHUGH J:   The way it was put in Turbo Tek was that fraudulent copying must result in a copy.

MR CATTERNS:   Yes.  Well, your Honour, this is not a copy apparent to the eye.  That is what his Honour holds in 362.  Your Honour, he expresses a test in 360, “a copy apparent to the eye” and it fails that test.  That is the result of 362.  So his Honour has to get ‑ ‑ ‑

HEYDON J:   He says it is not an obvious imitation.

MR CATTERNS:   Yes, your Honour.

HEYDON J:   That leaves open whether it is not some other type of imitation ‑ ‑ ‑

MR CATTERNS:   Yes, your Honour, and the only other ‑ ‑ ‑

HEYDON J:    ‑ ‑ ‑ such as a fraudulent one.

MR CATTERNS:   Yes, that is the only other category.  But we say that all of the cases on fraudulent imitation – eg, Malleys – is you have to do something with those differences to change the balance.  These two outweighed the one for the purpose of obvious imitation.  You are not punished for the mere fact of copying, or awareness of the registered design.  That knowledge has to impact upon your alleged imitation, and as per Malleys v Tomlin it had impacted on it by leading to disguise.  That is what those cases are about, or even just designing around – if one wants to say what Justice Manisty said – but there is no finding here that these differences, which otherwise would outweigh the similarities, are to be discounted for any particular reason, and the reason is his Honour could not have made such a finding.

McHUGH J:   No, you see, I think once you deal with fraudulent imitation you get into a different universe.  When you are looking at the question of obvious imitation you are comparing the two things, looking for the similarity between the two.  When you come to the question of fraudulent imitation you are looking at the apparent differences, and the question is, “What is the purpose of these apparent differences?”  That is what the Court itself said in Malleys, was it not?

MR CATTERNS:   Yes, your Honour.  Well, exactly, and, your Honour, there is ‑ ‑ ‑

McHUGH J:   So it does not necessarily follow because you say there is not sufficient similarity for them to be an obvious imitation, that that forecloses the question of fraudulent imitation, because on fraudulent imitation you are looking at the reason for the differences.

MR CATTERNS:   Precisely, your Honour, and that is what the Full Court did.  That is why the paragraph our friend criticised is, with respect – and perhaps this could have been expressed better – but that is exactly what their Honours say is lacking in this paragraph.  His Honour does not ask what is the reason, or what is the purpose, of these differences.

McHUGH J:   Well, I am not sure, even accepting that, that you may not fail on the facts of this case.  If, as the cases say, the onus is on you to exclude the question of copying, why did you fail to discharge the onus?  You did not ask Mr Rogers any questions about it.

MR CATTERNS:   Your Honour, he had the registered design, there is no doubt about that.

McHUGH J:   He had the registered design.  He also had one of the plaintiff’s outlets that had been given to him by Colebatch.

MR CATTERNS:   Fair enough, your Honour, and we proved all of the China outlet as part of its provenance, but we do not try to challenge the findings of copying.  The Act, first of all, does not throw an onus on us.  Our friend has to prove that we made a fraudulent imitation of his design.  The early onus case, Grafton v Watson, about interlocutory injunctions, we submit, would not carry that question of statutory construction.

McHUGH J:   But once you get a finding of fact that you “knowingly, consciously and deliberately” based your design on the plaintiff’s outlet director part, then is there not an evidentiary onus on you to show that it was not fraudulent?

MR CATTERNS:   For the sake of argument, may I accept that, your Honour?  That is exactly what we did, because we proved that the two differences that outweigh the similarity for the purposes of obvious imitation were not, and could not, have been put into disguise and were not copied.  They were omissions.  By definition, they could not be copied.  We omitted two features.  It has nothing to do with copying them.  That onus is easily discharged, your Honour.  That is what the Full Court said when it said we discharged the onus.  We discharged the onus in that respect.  These particular two features are the only features of any interest in the shape of the blade pack itself, as distinct from the blades.  We do not have them and we did not have them because of copying, and our friend never suggested that we did do it because of copying.

HEYDON J:   You can disguise yourself by adding features and you can disguise yourself by removing features, shaving beards off and ‑ ‑ ‑

MR CATTERNS:   Yes, your Honour, I suppose that is right as a matter of logic, with respect, but that is not the case here, because ‑ ‑ ‑

McHUGH J:   It is frequently done.  Criminals on the run shave their hair, moustache.

MR CATTERNS:   Fair enough, your Honour.  There is a paragraph in the Full Court’s reasons about that.  May I have a go at – I forget the way his Honour Justice Gummow put it ‑ ‑ ‑

HAYNE J:   I think you are at chapter 1 of Genesis at the moment.

MR CATTERNS:   May I remind your Honours that so far this judgment is written to answer Malleys v Tomlin, because that was what the argument was before his Honour ‑ ‑ ‑

McHUGH J:   I thought your submission was that it applied Malleys v Tomlin.

MR CATTERNS:   That is what I mean, I am sorry, your Honour.  I mean applied, answer it in that sense.  Their Honours say in paragraph 57 – and, with respect, to say that their Honours have misunderstood 378 is an error: 

His Honour made the finding of deliberate copy and noted the obvious similarities between the Design and KA1. 

Your Honours, I am at 1259, paragraph 57: 

He then (at [378]), properly considered whether KA1 embodied a shape or configuration distinctly different to the Design.  He concluded that the shape and configuration were not distinctly different.  In coming to that conclusion, however, he characterised as not distinctly different differences previously held (at [362]) to be not so slight as to be insubstantial for the purposes of obvious imitation –

stopping there and picking up the answer our friend gave to his Honour Justice Callinan, their Honours have obviously seen, in paragraph 378, the reference to those two features, but it goes on –

and did not consider the effect of the omission of two of the three features –

or, perhaps their Honours should have said, “significance”.  That is really what their Honours mean, if that were read as, “did not consider the significance” and that is what his Honour did not do. 

In 378 he did not say, “For some reason or other that difference, its effect, is now less significant.  We put it aside, we give it less weight”.

GUMMOW J:   Well, what do you say about the last sentence at 378 of the trial judge’s judgment?

MR CATTERNS:   Your Honour, what I say about that is twofold.  First, it is a mistake because his Honour has previously held in 355 that three matters give RD2 its distinctive appearance.  That is held fair and square with three numbers.  He does not hold that just the ends give distinctive appearance.  Indeed, he has held that the chamfered lip and the vertical ribs are items 2 and 3 that give it its distinctive appearance.

GUMMOW J:   Wait a minute.  Let us look at 355.

MR CATTERNS:   Based on Professor Russell’s evidence, our friend’s witness.  So, your Honours, he has forgotten 2 and 3 in that respect.

HAYNE J:   Well, 355, page 1202 – it is really the start of 356:

To my mind, the features which I have identified and, particularly the first - - -

MR CATTERNS:   Sure, your Honour.  I drew attention to that when I read it before.

HAYNE J:   But that fits, does it not, with what his Honour says at 378?

MR CATTERNS:   No, your Honour, because if those features and shape and configuration alone gave it its distinctive appearance, there would have been an obvious imitation, as in 362.  That sentence cannot stand against 362 unless somehow you discount the differences, and our friends have not challenged paragraph 362.  So, your Honour, that is our criticism.  Really, your Honours see that it is not – the rest of that sentence – answering his Honour Justice Gummow’s question - his Honour is not there putting aside the differences.  He is saying the similarity has been copied. 

If I may return to the Full Court, your Honours, picking up still our friend’s criticism.  So we respectfully submit that what the court says is “did not consider the effect of the omission”.  Certainly, they considered the fact that they had been omitted but did not give significance to it.  This whole – we are arguing today, your Honours, about what, as a matter of law, is the effect that should be given to this omission.  That is the case, your Honours.  So to say that the Full Court did not address the question misses the point.  I am still in paragraph 57:

held at ([355]) to give the Design its novelty, its distinctive shape or configuration over the prior art ‑

That is relevant to his Honour Justice Heydon’s question to me –

His Honour did not consider the effect of these omissions on a finding of imitation.  His Honour should have found that there was no imitation in the circumstances.

Then in 58:

Mr Rogers was not . . . cross-examined . . . to suggest that he consciously omitted them –

a la Justice Manisty –

The appellants pointed to evidence that the vertical ribs were an artefact of Polyaire’s moulding –

there was no dispute about that, and we had a different process, not challenged –

In any event, his Honour found that the production of KA1 did not involve the application of the Design or an obvious imitation of the Design –

that is a reference to 362 –

He made no finding –

as he ‑ ‑ ‑

GUMMOW J:   The first sentence of paragraph 58 has rolled up in it the point Mr Justice McHugh was putting to you about evidentiary onus, has it not?

Mr Rogers was not examined or cross‑examined in respect of his omission of the chamfered lip and vertical ribs or to suggest that he consciously omitted them. 

MR CATTERNS:   Fair enough, your Honour, but I ‑ ‑ ‑

GUMMOW J:   And then it said, “or cross‑examined”, which wraps it all up together.

MR CATTERNS:   But, your Honour, evidence was led ad nauseam to show the China project had a frame that did not have a chamfered overhang, and the evidence of our friend’s own witness was that the vertical bars were a moulding artefact.  So there was positive evidence as well, your Honour.  Their Honours say:

He made no finding that the two omissions were conscious or mere disguises.  The evidence is to the contrary –

positive evidence, your Honours, as I have just submitted –

and such a finding would not be open.

So I submit that answers the onus point –

His Honour relied upon the similarities rather than the differences in making a finding that KA1 was a fraudulent imitation of the Design. 

In other words, paragraph 378 does not deal with the differences.  It does not put them away by saying, “They are good enough for 362, but they are not good enough now”.  Then their Honours say, applying Malleys in light of those facts that his Honour Justice Gummow drew attention to:

it was not open to find that the omission of the steeply chamfered inner lip and the vertical ribs was made in order to disguise the fact of copying.  K‑Aire satisfied the onus of proving an absence of copying.

I think their Honours must mean, “with respect to those features”.

HAYNE J:   Is the statement by the Full Court, “it is clear that the China Outlet” et cetera, in paragraph 59 consonant with the finding at 376?

MR CATTERNS:   Yes, your Honour, absolutely.  Paragraph 123.

HAYNE J:   What?  That that is where he started with CAD?

MR CATTERNS:   Yes, your Honour.

HAYNE J:   Well, that is a vastly different proposition.  Where you start with on the computer‑aided design is one thing.  The design finding at 376 is, I would have thought, rather different.

MR CATTERNS:   But, your Honour, he already had the design with a blade, very like our friend’s design, with a bar linking them in a square box, a more complicated square box, because he did not have the cross.  He clicked them together.  It even had v-shaped notches different from our friend’s, I accept, for the pivots to sit in.  We respectfully submit that that is not to challenge 376.  I submit that the finding of copying – one has to dig down into it, to coin a cliché:

There must be a copy (i.e. imitation) (dealt with at [378]), being a copy that has differences that are both apparent and not so slight as to be insubstantial and therefore not an obvious imitation, as his Honour found (at [362]). 

This is applying Malleys –

But before there is fraudulent imitation, the differences must have been made ‘merely to disguise the copying’ (i.e. the imitation).  In the absence of a finding as to the last, the pre-requisites for fraudulent imitation are not established.  Fraudulent imitation requires something more than visual comparison.  If visual comparison was, of itself, sufficient to establish imitation there would be obvious imitation, but his Honour found otherwise.  At no point did his Honour give attention to the question whether or not the differences that he had found, which were sufficient to avoid a conclusion of obvious copying of the Design, were made merely to disguise the imitation of the Design.  Therein lay error.

Further, with respect to KA2, and we respectfully submit that their Honours are right in 62, he had identified the relevant principles, quoting Malleys v Tomlin, may I remind your Honours, earlier:

It is necessary to make each of the findings of an intention to copy, differences made in order to disguise the copying and a resulting product that is in fact a copy or imitation.

In the present case, taking into account the primary judge’s findings as to the differences between the design of KA1 and KA2 and the Design, the factors that gave the Design its distinctive appearance and the evidence in regard to those features, we do not consider that it can be said that his Honour explicitly –

This was our friend’s submission.  Because this was fought on the basis of Malleys, our friend submitted that his Honour implicitly found disguise, held no.

HEYDON J:   Could I just get one thing straight?  You say there is a gap in paragraph 378 and the gap should have been filled by some reference to disguise, but is there any finding negating disguise?  Did he specifically reject that allegation?

MR CATTERNS:   No, your Honour.

HEYDON J:   So there is a silence.

MR CATTERNS:   That is right, your Honour.  But, your Honour, we have submitted that the evidence, if the Court had to look at – and the Full Court did – is as said in paragraph 59.  It could not have been founded that it was disguise.  Your Honour, our friend argued that there had been an implied finding to that effect, and that was rejected in paragraph 63.

HEYDON J:   It is open to us to look at Mr Rogers’ evidence, is it, and check for ourselves whether paragraph 59 is convincing?

MR CATTERNS:   Your Honour, I have not heard our friends challenge 59, that the China outlet was the source, that it did not possess a chamfered overhang ‑ ‑ ‑

HEYDON J:   But to say that something is not open to be found is to say a very absolute thing.

MR CATTERNS:   Well, perhaps it depends on ‑ ‑ ‑

HEYDON J:   And it is bolstered partly by a sort of a Browne v Dunn analysis, but that depends on the burden of proof.

MR CATTERNS:   But, your Honour, there being no cross‑examination of it, leaving aside any Browne v Dunn point, we submit that the evidence positively showed that these were features of the China project, and I am sorry, your Honour, and the finding of copying does not relate to this.  The finding of copying relates to the snap-fit mechanism, the control bars and the blade ends.  Your Honour, the requirements by Mr Colebatch relate to the – the blades protruding below the ceiling affect where the spigot is, so it relates to the blade ends, and the addition of a control bar.  The copying just was not in that territory.

The point is these differences cannot owe anything to the registered design.  It is just the fact of having a simple square frame as opposed to the more complicated one that our learned friends had.  May I remind your Honours that those pieces of prior art in volume 2 our friend drew attention to - they are in volume 2, page 909.  These are fixed blades shown at 913.  They are fixed parallel blades of even thickness in the plain square frame, and at 923 and following there is another registered design, 105504, which did not have a square frame, but at 925 we can see the blades with a single spigot without the addition of a control bar.

McHUGH J:   What is wrong with the statement of principle of the learned judge at pages 1187 and 1188, where he states the law in some considerable detail?  He starts off in paragraph 288, saying:

An obvious imitation of a registered design is one that is not the same as the registered design but it nevertheless results in a copy apparent to the eye notwithstanding slight differences.  A fraudulent imitation is a copy of the registered design with differences which are both apparent and not so slight – 

et cetera, and then, in paragraph 290, he says:

It seems that there are three elements of fraudulent imitation – 

and the third one is important for present purposes –

Thirdly, even if the first two elements are shown, fraudulent imitation will not be made out unless in fact the accused article is an imitation or copy of the registered design. 

He explains those three elements in greater detail, and he deals with the third one in paragraph 293.  Now, do you make any challenge to these statements of principles, based, as they appear to be, on cases including Malleys Case and Firmagroup?

MR CATTERNS:   No, we do not, your Honour.  His Honour relies on the question of disguise, goes on to find that in fact there was disguise, but holds that nevertheless there was not an infringement in the case of the first registered design.

McHUGH J:   Yes, but his conclusion is explained by what he said at 288:

An obvious imitation . . . is one that is not the same as the registered design but it nevertheless results in a copy apparent to the eye notwithstanding slight differences.

Then he says:

A fraudulent imitation is a copy of the registered design with differences which are both apparent and not so slight as to be insubstantial but which have been made merely to disguise the copying.

Then he cites Malleys for that.

MR CATTERNS:   Yes, your Honour.  That is my criticism of paragraph 278 – 378. 

HEYDON J:   But is not Mr Yates right that there must have been an implied finding hidden behind 379?  Having set out the test several times calling for disguise, must he not have thought that it was done to disguise?

MR CATTERNS:   No, your Honour.

HEYDON J:   I mean, if he had said, “I find no disguise, of course.  These are fine people, they would not disguise what they have done”, but his silence on it, in view of his conclusion, is only compatible with his belief in the proposition.

MR CATTERNS:   Or it is an error, which is what the Full Court held. 

HEYDON J:   So he just forgot?

McHUGH J:   But he must have found, must he not, that although it was not an obvious imitation, it was nevertheless a copy, because at paragraph 288 he has referred to what was said in Malleys:

visual comparison will not of itself be sufficient to establish imitation otherwise it would be an obvious imitation. 

MR CATTERNS:   Yes, your Honour, but he has also said it is not “a copy apparent to the eye”.  That is the first half of 288.  That is what paragraph 362 holds, that is what his Honour held.  This is not “a copy apparent to the eye”, and the only way, as his Honour Justice Heydon says, if we are going to apply the law set out in this paragraph – the only way that 378 can possibly be right is if there is an implicit finding of disguise, and, your Honours, it is impossible to hold that these two particular differences are mere disguise, because they are not.

Our learned friend argued before the Full Court that there was an implicit finding of disguise because he had to argue that as, with respect, it follows from what his Honour Justice Heydon put to me, but the Full Court was right in rejecting that, fair and square, in paragraph 63.  Leaving aside the question of onus, the significance of this and the reason we can say with confidence there is no implicit finding of disguise, is our learned friend did not put it to the witness.  I am not saying it is a Browne v Dunn point or it is an onus point but, as a matter of fact, it was not put to him and the reason it was not put to him, I would respectfully infer, is that it could not be said that they were disguised.  These are two features that are omitted.  In fact, there was some cross-examination about the chamfer and Mr Rogers says, “I think it would be a waste because it narrows the space”.

HAYNE J:   On this question of disguise, an example is given at 289 of what his Honour understands to be fraudulent imitation where the designer does not intend to steal another’s property but may believe created a different design.  How do notions of disguise fit into a context of that kind?

MR CATTERNS:   Your Honour, our learned friends relied on that passage from Dunlop Rubber in their written submissions and we did too and what we have respectfully suggested is that the High Court went beyond what Justice Farwell said.  But, your Honours, there is one thing his Honour Justice Farwell says that we have not said in our written submissions.  He says the differences may be more subtle.  Now, that reads strangely because the idea of fraudulent imitation is that differences can be bigger. 

What does his Lordship mean by “more subtle”?  Your Honours know, of course, that the word “subtle” can have a pejorative connotation and we wonder – I do not want to put it any higher than that – if Justice Farwell might have had that in mind and their Honours in the High Court in coming up with their formulation in Malleys v Tomlin may well have picked that up.

HAYNE J:   But again, when you go to 290 and 291, disguise does not march across the stage.  It is not until, I think, 293 where it intrudes again but intrudes negatively, even if intention was to disguise, no fraudulent imitation unless in truth you have a copy.  What are we to make of the significance that is attached to this notion of disguise, given the amplification in 289 to 293?

MR CATTERNS:   Your Honour, his Honour looked for disguise.  In 293 his Honour quotes the passage that was approved in Firmagroup where the holding of Justice King was not mere disguise.  But, your Honour, in the present case, to be complete, his Honour actually held that there was disguise with respect to the first design in paragraph 311.

Of course, we must face up to the fact that his Honour had squarely in mind, in dealing with the first registered design, this necessity for disguise, as the law then was and as the case was fought.

GUMMOW J:   You keep saying it was.

MR CATTERNS:   Well, as the case was fought, your Honour.  The High Court in Firmagroup described it as a brief but accurate summary.

GUMMOW J:   Well, they might have.

MR CATTERNS:   We are only doing our best, your Honour ‑ ‑ ‑

GUMMOW J:   Yes, I understand.

MR CATTERNS:    ‑ ‑ ‑ at first instance with two High Court decisions that look fairly clear, understanding the difference between obiter and ratio, of course.

McHUGH J:   But his Honour did not seem to see any conflict between paragraphs 362 and 378.

MR CATTERNS:   No, your Honour.

McHUGH J:   He emphasised it was the shape and configuration of KA1 that was not significantly different from RD2.  He said there are differences, and he pointed to them, the same that he had referred to in 362.

MR CATTERNS:   Yes, your Honour.

McHUGH J:   But he says, however, the features of shape and configuration, which gave RD2 its distinctive appearance, have been copied. 

MR CATTERNS:   Yes, your Honour.  Well, there are two errors there.  One, as I have already submitted, those features of shape and configuration did not alone give it its distinctive appearance – see 355 – and, secondly, what is the rationale of demoting the differences in 378 from the fact that they predominated sufficiently for it not to be an obvious imitation in 362?  There has to be implicit, as a matter of logic, but there cannot be a finding of disguise or some other way of putting the differences aside.  So, your Honours, with respect ‑ ‑ ‑

McHUGH J:   Well, rightly or wrongly his Honour’s approach seems to be this.  He has looked at the physical parts in 362 and he says, “They are different, therefore it’s not an obvious imitation”, but in 378 he has fastened onto the shape and configuration ‑ ‑ ‑

MR CATTERNS:   Your Honour, with respect, that is not the answer, because this monopoly is for the shape and configuration.

McHUGH J:   I know.

MR CATTERNS:   And his Honour has always looked at the shape and configuration.  They are matters of shape and configuration.  If your Honour looks at 355, your Honour will see that 2 and 3, which are the differences we fasten on, are features of shape and configuration.

McHUGH J:   Yes.

MR CATTERNS:   So, your Honours, there is an intractable problem between 362 and 378, and it can only be resolved in two ways.  As a matter of logic, his Honour Justice Heydon puts to me, an implicit finding of disguise or something – perhaps as Justice Manisty would put it – and we respectfully submit that on the facts that is not open.  Although I have accepted for the purposes of argument the question of onus, this is fraudulent – there is an argument of fraud here – and if you are going to suggest that somebody has disguised something, we submit the onus is not on us to prove non‑disguise.

HAYNE J:   And just to be quite plain about it, you use the word “disguise” as connoting malevolent intention.

MR CATTERNS:   I use “disguise” in the sense used in Malleys v Tomlin and B&D v Firmagroup ‑ ‑ ‑

GUMMOW J:   But they do not explain it.

HAYNE J:   Let me into the secret.  What do you say that equals?  Malevolent intention?

MR CATTERNS:   Your Honour, we win this case – sorry, our first level is – I respectfully do not want to embrace the word “malevolent”, but “fraudulent”, a fraudulent intention.

GUMMOW J:   How would the fraud be perfected?  What is the fraud?

MR CATTERNS:   The fraud is you disguise the fact of copying by making the thing look different, or put another way around, your Honour, it has to impact on the differences.  The word “fraudulent” has to have some impact on differences, and whether we are wrong in embracing
Malleys v Tomlin and disguise, and whether or not Justice Manisty is right and just as you cannot avail yourself of these differences if they are done to get around, to avoid infringement, no malevolence involved at all, there is not a finding of that kind, and there could not be.  There is no finding of that kind here, your Honours, so ‑ ‑ ‑

McHUGH J:   But in the criminal law, defraud means deprive by deceit, and it is independent of intention.  The phrase “intent to defraud” is a well‑known term in criminal law.  So why is not the defrauding here that knowing of somebody else’s intellectual property or having reason to suspect, you acquire it by copying it, and then leaving out parts of it.

MR CATTERNS:   To avoid infringement?

McHUGH J:   Well, yes, to avoid infringement if you like.

MR CATTERNS:   Because, your Honour, that is the whole idea of statutory intellectual property monopolies.  The whole idea is you have a statute, you have a monopoly defined by your claims or your representations in a public register and a section and a body of law which defines how broad the owner’s monopoly is and what I can do as a person in commerce or whatever.  They do not fence off the whole field of – for example, if we had left off the two bars, it did not have the bars at all because we saw they had a registered design for something with bars, that cannot be said to be fraudulent or malevolent.  That is just not infringing.

So, your Honours, that is why in struggling with this concept of fraudulent imitation for 160 years, the courts have tried to give it some content and, although we embrace Malleys, we respectfully submit that if it is given any content other than straight‑out punishment for copying, if it is given any content at all, it has to be content that impacts upon the weight of the differences, and there should be something in 378 which says, “I now discount the differences for the following reason - Justice Manisty, et cetera”.

GUMMOW J:   Well, let me put to you what seems to me at the moment to be all that is involved from this notion of disguise.  Now, it appears at 1188, paragraph 293 where his Honour says:

The third element means that the plaintiff must prove that the accused article is in fact an imitation or copy.  In other words, even if the defendant set out to copy the plaintiff’s design and even if the defendant’s intention in adopting the differences –

was to disguise, there will be no fraudulent imitation unless there is in fact, et cetera.

MR CATTERNS:   Your Honour, with respect, that is to paraphrase ‑ ‑ ‑

GUMMOW J:   You try and turn that around the other way.

MR CATTERNS:   But your Honour, that is because that phrase is derived from about six cases where all the elements of fraud including disguise were present, but nevertheless, because the salient features were missing, there was no infringement, Turbo Tek, Malleys, Firmagroup, Fisher v Fabtile ‑ ‑ ‑

GUMMOW J:   I think what his Honour says is in fact consistent with Malleys at 127.

MR CATTERNS:   I agree, your Honour.  Malleys is a case ‑ ‑ ‑

GUMMOW J:   They said the Chief Judge in Equity did find in effect that the design used by the appellant was deliberately based.  Such differences had been adopted for the purpose of disguising.

MR CATTERNS:   Sure, your Honour, Malleys is not ‑ ‑ ‑

GUMMOW J:   But, they went on to say, however, no imitation because it had gone beyond it.

MR CATTERNS:   No imitation, that is right, your Honour.  But that is where they found no obvious imitation, fraud but no imitation because sufficiently different.  This is a different case.  Our case is, no obvious imitation, no fraud, unless bare copying with knowledge is fraud.  That is why they are different circumstances, your Honour.

GUMMOW J:   All right. I think we are at issue.

MR CATTERNS:   I think we are, your Honour.  We respectfully submit that for 378 to stand, the law of fraudulent imitation can lend no more than copying with knowledge because that is all that informs 378, otherwise his Honour would, in 378, have had to have got over what his Honour had held in 362.  We respectfully submit that this whole line of authorities, which we have given your Honours the references to and I do not need to go back to Malleys and so on, have been cases where the courts have agonised with giving this concept of fraudulent imitation some content ‑ ‑ ‑

GUMMOW J:   I do not think they have agonised at all.  I think they have just brushed over it.  I think that is the whole problem.  That is why we granted special leave.

MR CATTERNS:   Fair enough, your Honour.  I submit, looking at it as if this was the first case ever on the meaning of the words “fraudulent imitation”, it must mean that it is not an obvious imitation, it seems to be fair enough for us all to say that is a copy apparent to the eye, so this is not a copy apparent to the eye.  It is sufficiently different from the registered design that it is not an obvious imitation.  So what does “fraudulent imitation” mean?  Sure, it must mean knowledge and it must mean copying to access derivation.  But that is not the same as fraud, as his Honour the presiding Judge’s first words of the day arguendo were. 

So what is fraudulent about it?  The answer is, something must have happened to the differences as a consequence of your knowledge.  When you were doing the copying you did not copy it perfectly, you made a slight difference, and the case before Justice Manisty is a perfect example of that.  They wanted to be as close as possible for passing off type reasons because that is what the market was for, the particular device, but they made a change to get out of the section. 

We respectfully submit that the fact of copying and knowledge has had no impact on these differences which have been held to be sufficient to avoid it being an obvious imitation.  And so, the fact of copying and knowledge, which are the first, let us agree they are the sine qua non of fraudulent imitation, they do not impact upon these differences.

McHUGH J:   But the fraud lies not in this third element which you are concentrating on and talking about differences; the fraud lies in deliberately basing your design on the registered design, and secondly, knowing or suspecting that it is registered or its registration is pending, and the third element is that you have in fact made an imitation or copy, and the fact that it is not an obvious imitation does not mean that it is not an imitation or copy.  If it is not an imitation or copy, then Malleys says no matter how evil your intent is, there is no breach of the section.

MR CATTERNS:   Fair enough, your Honour, but that is why this is a case that is different from Malleys v Tomlin in that respect, because there is no finding of evilness of intent in the Malleys v Tomlin sense where all the differences were done to disguise the copying but it is fundamentally ‑ ‑ ‑

McHUGH J:   They were irrelevant in the end in Malleys but they made an overpowering case of fraudulent imitation until you actually made the finding that really it was not a copy anyway.  The differences were so substantial that it just was not even a copy.

MR CATTERNS:   But, your Honour, the one difference – what it looked like, your Honour, was this, it had a “J” at the side, then it came up and then it was flat, then there was a little dome, the same on the other side, and the cylinder dropped into the bottom of ‑ ‑ ‑

GUMMOW J:   This is going to look great on the transcript, Mr Catterns.

MR CATTERNS:   I will look at the transcript, your Honour.  I am sure it is bad.  But the absence of that “J” rim which gave it its novelty led to their Honours holding it was not an infringement.  We respectfully submit that it is utterly foreign to the idea of intellect.  It is an utter question of principle that it is not ‑ ‑ ‑

GUMMOW J:   You cannot treat intellectual property as a barrel of apples of equal size or ‑ ‑ ‑

MR CATTERNS:   Of course not, your Honour.

GUMMOW J:   It is all different.

MR CATTERNS:   Designs are usually regarded as the smallest barrel unless our friend has his way, or smallest apples.  Your Honours, I am sorry to repeat myself, but the whole idea of a public register and a statutorily defined scope of a monopoly is that there is nothing wrong with trying to avoid infringement simpliciter by omitting ‑ ‑ ‑

McHUGH J:   Nothing at all, but if at the end of the day it can be regarded as an imitation or copy, even though an imperfect one, then you are gone.

MR CATTERNS:   Your Honour, how does that become fraudulent if we ‑ ‑ ‑

McHUGH J:   The fraud is in basing your design in the first place on the registered design, and secondly, knowing that it was registered.

MR CATTERNS:   Your Honour, I respectfully submit that is just copying, copying with knowledge.

McHUGH J:   No, they are the first two elements, and then when you finish up with a similarity that is sufficiently similar to say it is an imitation, end of game.

MR CATTERNS:   Your Honour, that is what paragraph 362 says, as my learned junior says to me.

McHUGH J:   No, it does not.  You keep regarding obvious imitation as – sorry, not an obvious imitation, you say, therefore not a fraudulent imitation.  It is a non sequitur.

MR CATTERNS:   Your Honour, I am not saying that, because we are saying it is not an imitation apparent to the eye.  When the High Court says in Malleys it is not an imitation at the end of it, notwithstanding the fraud, their Honours are saying it is not an imitation apparent to the eye.  That is what their Honours are saying - because it lacks the “J” rim.  They are saying the same thing.  So, your Honour, we respectfully submit that once one has found that there is no obvious imitation, it is not the same position as Malleys because there has not been that finding of fraud, but it is equivalent for present purposes and, your Honours, something more has to be done.  I am just noticing the time and want to give our friends a bit of a go, but may I refer your Honours to the exhibits.  We have some more copies of KA2 if it would be convenient to leave those with the Court rather than hand them up.

Your Honours, may I commend exhibit P20, which is the China Project Blade, which we submit is very similar to the KA2 in particular; CD21, which is the China Project Link Bar; and CD15 which is the Frame.  It has some protrusions on the outside of it, but that has nothing to do with the bars on the outside of our friend’s device, because they happen to be a moulding artefact and the ones on our device were clipping the things together. 

Just finally, your Honours, without asking your Honours to go to it, may we in particular ask your Honours, in addition to having another look at Malleys v Tomlin and B & D, the crucial thing here is the matter that we copied that has caused the difficulty is the ends of these bars.  It is crucial to remember that our friends do not get the monopoly in that idea.  They only get the monopoly in the very specific shape of their spigots, et cetera, and their spigots are conical flared, ours are hemispherical, as seen in the China project and so on.  His Honour would have found that that was enough to hold that there was an obvious imitation, but for the differences that we stress. 

Your Honour, may we commend the judgment of his Honour Justice Fullagar in Fisher v Fabtile (1978) 1A IPR 565, where we get a number of these propositions of law, including, apropos of the size of apples in different parts of IP, Justice Dixon, quoting Lord Halsbury, who says:

“in order to amount to infringement, because of the nature of the thing protected, a closer resemblance, a greater imitation, a more

faithful reproduction of the design is necessary than might be the case under trade mark or patent law” –

That is at page 582.  His Honour also gives a lengthy discussion of the impact of the prior art on the scope of the monopoly, if I could just show your Honours ‑ ‑ ‑

GUMMOW J:   That seems to go back to Hecla.

MR CATTERNS:   It does, your Honour, it does, and that is discussed in Décor v Dart, too.  May it please the Court.

McHUGH J:   Yes, Mr Yates.

MR YATES:   Your Honours, I think my learned friend and I are at issue both as to the meaning of “fraudulent imitation” and as to what we submit were errors in the Full Court’s reasoning on the question of carrying out the comparison.  With respect to the so‑called China outlet, our learned friend has drawn the Court’s attention to certain disassembled bits and pieces of the China outlet, but he has not taken the Court to in fact what the China outlet looked like.  Your Honours, we have a photograph of that in volume 2 of the appeal book at page 750.

It is not a very good photograph, but there is a better photograph, which is exhibit P61.  Dealing with page 750, if your Honours could hold that in landscape view, in a way which I will hold up to your Honours to point to a photograph which would be at the bottom right‑hand corner.  That is the China outlet.  Your Honours will see, looking at that, that, first of all, it has the large protrusions, vertical protrusions.  The control bar is sitting proud of the connector, way up top, whereas, in the registered design, the control bar is captured within the confines of the frame.  The pivot point for the blades is in the middle point of the blade, whereas, in the registered design, the pivot point is brought closer to the spigot which holds the control bar. 

Your Honours will see that the blades in the China outlet have an aerofoil shape as opposed to even thickness, and your Honours will see that the frame itself, again, is engaged by the spigots of the veins or the axle of the veins via a rather dramatic v-cut in the leading edge of the frame.  Of course, in the registered design, there is a snap fit of a completely different appearance, which is introduced at the trailing end of the frame, which is underneath.  So that when one looks at those features in the aggregate and then translates them to a design, what we see is a design of a distinctly different appearance to the one that is the registered design. 

One has to ask, how do you get from the China outlet to something that looks like KA1 and KA2?  The answer is simple, your Honours.  It was knowingly, consciously and deliberately based on the registered design.  When the draftsman went to the technical drawings of the China outlet, once again, they were ‑ ‑ ‑

GUMMOW J:   What does this expression at 1151 “one‑piece register” mean?

MR YATES:   Your Honour, that is a composite device which I think I am right in saying is the top photograph on page 750.  The register is the assembly that holds all the blade boxes and it also has a fitting which allows the air‑conditioned air to be pumped into the outlet.  It is a greater device.  The provenance of the design of the accused article in no way, we would submit, could be the China outlet.  The provenance was the appellant’s product which the designer had before his eyes when coming up with the design of KA1 and KA2.

Finally, your Honours, there was some cross‑examination of Mr Rogers on the distinctive features of the China outlet at pages 374 to 377 of volume 1 of the appeal book.

GUMMOW J:   Is this cross‑examination?

MR YATES:   My cross‑examination of Mr Rogers.  I was not proposing to read that to your Honours, but it goes through the various features which I have put in summary form to your Honours in reply this afternoon.  Your Honour Justice Gummow requested there be a list of the cases in which fraudulent imitation has been found.  May we have your Honour’s leave to provide a typed list by the end of the week?

McHUGH J:   Yes, you have that leave.

MR YATES:   Thank you, your Honour.  May it please the Court.

McHUGH J:   Thank you.  The Court will reserve its decision in this matter and we will adjourn until 10.15 am tomorrow.

AT 4.01 PM THE MATTER WAS ADJOURNED