Sony Computer Entertainment Australia Pty Ltd v Kasmara

[2003] FCA 1496

FEDERAL COURT OF AUSTRALIA

Sony Computer Entertainment Australia Pty Ltd v Kasmara [2003] FCA 1496

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD AND ANOR v ANDY KASMARA AND ORS
N 1241 of 2002

ALLSOP J
11 DECEMBER 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1241 of 2002

BETWEEN:

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD
(ACN 077 583 183)

FIRST APPLICANT

KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT
SECOND APPLICANT

AND:

ANDY KASMARA
FIRST RESPONDENT

JENNY ANGGRAINI
SECOND RESPONDENT

RONNY KURNIAWAN
THIRD RESPONDENT

PAULINA HALIM
(ALSO KNOWN AS “PAULINA KASMAI”)
FOURTH RESPONDENT

MJM 2000 PLUS PTY LTD
(ACN 086 644 386)

FIFTH RESPONDENT

JUDGE:

ALLSOP J

DATE OF ORDER:

11 DECEMBER 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Each of the Respondents has infringed the Second Applicant’s registered Trade Mark No. 642678 (the PlayStation Trade Mark).

2.Each of the Respondents has infringed the Second Applicant’s registered Trade Mark No. 642679 (the PS Trade Mark).

3.Each of the Respondents has infringed the Second Applicant’s registered Trade Mark No. 800713 (the PS2 Trade Mark).

THE COURT ORDERS THAT:

4.Each of the Respondents, whether by himself, herself or itself, his, her or its servants or agents or otherwise, be restrained from infringing the PlayStation Trade Mark by:

(a)without the licence of the Second Applicant, supplying or offering to supply in Australia any computer game player or any software, including any computer software or packaging containing any such software, which bears, or in which is stored electronically, any representation of the PlayStation Trade Mark or any mark substantially identical with or deceptively similar to the PlayStation Trade Mark or in relation to which any mark substantially identical with or deceptively similar to the PlayStation Trade Mark is otherwise used;

(b)without the licence of the Second Applicant, procuring or inducing any other person to do any of the acts specified in subparagraph 4(a).

5.Each of the Respondents, whether by himself, herself or itself, his, her or its servants or agents or otherwise, be restrained from infringing the PS Trade Mark by:

(a)without the licence of the Second Applicant, importing into Australia for sale or for use for the purpose of any trade or business or keeping for sale any computer game player or any software, including any computer software or packaging containing any such software, which bears, or in which is stored electronically, any representation of the PS Trade Mark or any mark substantially identical with or deceptively similar to the PS Trade Mark or in relation to which any mark substantially identical with or deceptively similar to the PS Trade Mark is otherwise used;

(b)without the licence of the Second Applicant, procuring or inducing any other person to do any of the acts specified in subparagraph 5(a).

6.Each of the Respondents, whether by himself, herself or itself, his, her or its servants or agents or otherwise, be restrained from infringing the PS2 Trade Mark by:

(c)without the licence of the Second Applicant, supplying or offering to supply in Australia any computer game player or any software, including any computer software or packaging containing any such software, which bears, or in which is stored electronically, any representation of the PS2 Trade Mark or any mark substantially identical with or deceptively similar to the PS2 Trade Mark or in relation to which any mark substantially identical with or deceptively similar to the PS2 Trade Mark is otherwise used;

(d)without the licence of the Second Applicant, procuring or inducing any other person to do any of the acts specified in subparagraph 6(a).

7.Each of the Respondents be taken to have delivered up to the solicitors for the Applicants upon the making of the Orders, for destruction or disposal at the Applicants' discretion all items removed from the Respondents' premises at 2/38 Park Street Hawthorn (the Respondents' Premises) during execution of the Anton Piller orders on 22 November 2002 as described in the list which comprises Exhibit MAS-1 to the Third Affidavit of Miriam Anne Stiel sworn 5 August 2003 and tendered 4 December 2004.

8.The Respondents jointly and severally account to the Applicants for profits in the sum of $200,000 including interest under section 51A of the Federal Court of Australia Act 1976 (Cth).

9.There be judgment for the Applicants against the Respondents jointly and severally in the sum of $200,000.

10.The Respondents pay the Applicants' costs of the proceedings in the sum of $120,000 being a gross sum pursuant to Order 62 rule 4(2)(c) of the Federal Court Rules.

THE COURT NOTES THAT:

11.For a period of 3 months following service of these Orders on the Respondents, the Applicants will not take any steps to destroy or dispose of the items delivered up pursuant to Order 7.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1241 of 2002

BETWEEN:

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183)

FIRST APPLICANT

KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT

SECOND APPLICANT

AND:

ANDY KASMARA
FIRST RESPONDENT

JENNY ANGGRAINI
SECOND RESPONDENT

RONNY KURNIAWAN
THIRD RESPONDENT

PAULINA HALIM
(ALSO KNOWN AS “PAULINA KASMAI”)
FOURTH RESPONDENT

MJM 2000 PLUS PTY LTD
(ACN 086 644 386)

FIFTH RESPONDENT

JUDGE:	ALLSOP J
DATE:	11 DECEMBER 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. In this matter, the applicants seek declarations and orders against five respondents in respect of infringements said to have occurred in connection with the second applicant's registered trademarks. 

2. The first applicant (Sony Australia) is an Australian corporation.  The second applicant (Sony Japan) is a Japanese corporation.  The first to fourth respondents are natural persons and the fifth respondent is a company incorporated in Australia and apparently under the control of one or more of the first to fourth respondents.

3. On 20 November 2002, the applicants commenced these proceedings by filing an application and a statement of claim.  On the following day a judge of this court, Gyles J, made an interlocutory Anton Piller order to be executed at a residential address at Park Street, Hawthorn, Victoria.  That Anton Piller order was executed.  The results of that Anton Piller order are before the Court in some of the various affidavits that have been filed and read and relied upon.  The application and the statement of claim were served on each of the respondents who, in fact, did appear by solicitors on 26 November 2002.

4. On that day, Gyles J made interlocutory orders restraining each of the respondents from infringing the relevant trademarks.  On 12 December 2002, Gyles J directed the respondents to file and serve defences by late January 2003.  A defence was filed in January 2003, on behalf of all respondents, putting substantially the matters in issue.  The matter was set down for hearing last Thursday.  No appearance was made by any of the respondents.  No appearance was made by any of the respondents today.  I am satisfied by the various affidavits of service and other evidence, that the respondents were fully aware of the hearing, its nature, and the orders sought, including the account of profits and the costs.

5. On the application of the applicants' counsel, Mr Cobden, I proceeded to hear the matter last week and to continue that hearing today.  The second applicant is the registered owner of three trademarks in Australia, that is Australian Trademarks Number 642678, for the word “PlayStation” for goods in class 9, number 642679, a PlayStation device for goods in class 9, and number 800713, the PS2 device, also for goods in class 9.

6. The first applicant, the Australian company, is the authorised user of the marks.  I am satisfied that the applicants have, by reason of their extensive sales and advertising, for their games and consoles, built a considerable reputation in their name, their products and in the trademarks in question. 

7. In 1998, the applicants became aware of certain infringements.  There was seized by Australian Customs in April 1998, a shipment of 94 compact discs imported into Australia in the name of the second respondent who is the wife of the first respondent and addressed to the premises at which the Anton Piller order was executed.

8. There was another seizure on 14 September 1998, this time of 156 compact discs imported into Australia in the name of the first respondent and addressed to another post office box in Hawthorn, Victoria. 

9. On 17 September 1998, there was a further interception of a shipment of 246 compact discs which were imported into Australia in the name of Paulina which is the first name of the fourth respondent who is the sister of the first respondent and which was also addressed to the premises the subject of the Anton Piller order last year.

10. On 10 December 1998, a shipment of 52 compact discs was imported into Australia and seized by Customs in the name of "Rudy Kurniawan" and addressed to an address in Camberwell, Victoria. 

11. On 5 October 1998, a shipment of 239 compact disks was imported into Australia in the name of the third respondent "Ronny Kurniawan", and addressed to another address in Hawthorn.  This shipment was also seized by Customs. 

12. On 14 December 1998 a shipment of 176 compact discs was imported into Australia in the name of "Paulina Kasmai" and addressed to the premises the subject of the Anton Piller order. 

13. On 28 February 2000 a shipment of seven compact discs imported into Australia in the name of the second respondent, though with a slightly different spelling and addressed to an address in Camberwell, Victoria, was seized by Customs.

14. All these events led ultimately to proceedings being commenced in relation to the seven compact discs last referred to against the second respondent.  In those proceedings the second respondent, as the only respondent to those proceedings, swore an affidavit in which she sought to limit her activities to those seven compact discs.  In those proceedings on 5 June 2000 Lehane J, by consent, made orders against the second respondent containing permanent injunctions against the infringement of the first two trademarks the subject of these proceedings.

15. From those events, at the very least, it has been shown to the point of demonstration that the second respondent was fully aware of the significance of the importation of counterfeit compact discs.

16. I also infer from the evidence which reveals that the third respondent is the first respondent's brother and the second respondent's brother-in-law and that the fourth respondent is the first respondent's sister and the second respondent's sister-in-law, and from the balance of the evidence as to the conduct of the parties, that the first to fourth respondents and through them the fifth respondent, well knew of what occurred in 2000 in relation to the second respondent.

17. In 2002 Mr Fleming, who gave evidence by affidavit, engaged in communications with various of the respondents and agents thereof.  He purchased, in what might be called trap purchases, in October and November, a number of compact discs from apparent agents of the respondents, conversing directly with the first respondent in terms that made it clear that the first respondent was involved in the transactions with the third respondent and the fourth respondent.

18. The evidence satisfies me also that the second respondent was aware of and involved in these transactions on the civil onus of proof.  I leave to one side as not being raised, any question of the contempt that may or may not be able to be proved as to Lehane J’s order.  That matter is not before me.

19. From the games sold to Mr Fleming, I am satisfied on the evidence that they were found to contain electronic representations of the relevant marks and were manufactured without the licence of the applicants and that they are being sold without the licence or permission of the applicants, containing as they do identical copies of the applicants’ marks to which I have referred.

20. On the evidence before me I am satisfied that the respondents and all of them were knowingly involved in the sales of these products containing infringements of the relevant marks and that they are fully aware that they are carrying on infringing behaviour.  The question of liability is, in my view, clear.

21. As to the extent of sales and advertising, the respondents appear to have been involved in the importation of counterfeit copies of PlayStation computer games at least from April 1998. There is an apparent flourishing business in this activity.  The respondents were able to provide reasonably large quantities of games in short periods of time on the evidence of Mr Fleming.  Mr Fleming was told that he was one of many customers from everywhere.  "They're like you and lots more" said the first respondent. 

22. A large number of games were seen at the premises by Mr Fleming while he was there.  A large number of games and sophisticated and extensive computer equipment and other equipment to copy the product was removed from the respondents' premises pursuant to the Anton Piller order.

23. Electronic business cards advertising "PlayStation games and accessories" were stored on the respondents' computer.  Brochures advising customers of price changes were stored on the respondents' computer.  A list of 595 customers were stored on the respondents' computer.  A list of 1,071 different titles of PlayStation games were stored on the respondents' computers. 

24. The first respondent said in conversation with Mr Fleming "I still do lots of games.  The money is too good as you know and I have too many customers to stop.  Every day I have too many orders.  I have been selling games now for five maybe six years.  It makes me very good money."  The first respondent also admitted to Mr Fleming that he had thousands of customers.  Australia Post records produced pursuant to a subpoena issued by the applicants showed cash on delivery payments to the respondents which totalled $16,672 between October 1998 and December 2002.  Those records also show money orders collected by the respondent totalling $5244.43 between July 2000 and December 2002.  National Bank records of the second respondent's bank account show regular and substantial cash and cheque deposits totalling almost $95,000.  The first respondent apparently supplied large volumes of games to interstate customers on a wholesale basis.

25. I do not think that the relatively modest amount of cash at Australia Post is reflective of the nature of the business.  The business appears to have been flourishing, continual and in existence for over five years.  I am satisfied on the evidence that by reason of extensive sales, promotion and marketing the applicants have built a substantial reputation and goodwill in Australia by reference to these registered trademarks.  I am satisfied that the goods sold by the respondents were of an inferior quality to the goods sold by the applicants.  I am satisfied on the evidence that the respondents' activities were significant, deliberate, knowing and took place over a long period of time.  On the evidence I conclude that there was a knowing, dishonest, flagrant and continual breach of the applicants' trademarks.  I am satisfied that the sales of the discs constituted an infringement of the mark. 

26. There is also an allegation that there was a breach of the Fair Trading Act 1987 (NSW). Whilst the immediate purchasers of these discs may full well have known that they were obtaining counterfeit discs, that being an element of the purchase for a cheap price, I think I can infer that there was a likelihood of the general public, at some point, being misled about this. I do not need to consider that in any detail. The relief which is sought, and which I am prepared to give, is based on s 126 of the Trade Marks Act 1995 (Cth) in relation to injunctive relief and I am also prepared to award a sum by way of an account of profits.

27. Therefore I will come to the form of the orders in a moment but I am prepared to make declaratory and injunctive relief in relation to the breaches that have occurred and which are threatened and I will also make as requested, an order for delivery up on a final basis of material which is now in the possession of the applicants, having been taken under the Anton Piller order that will enable them to deal with those goods pursuant to the terms of the order.

28. I turn to the question of account of profits.  The fundamental objective of an account of profits, in circumstances such as these, is to prevent the unjust enrichment of persons in the position of the respondents from their infringing activities and to disgorge profits thereby unjustly made.  One is necessarily left to a degree of approximation in attempting to do justice between the parties and remove from the wrongdoer the ill-gotten gains he or she has made from his or her wrongful activities.  In this circumstance and in the assessment of what might be the range of discounts for contingencies, a relevant factor to be taken into account is the honesty or otherwise of the conduct. 

29. Here the conduct has been, I am satisfied, dishonest on the evidence.  Here there has been a knowing use of the applicants' trademarks without their licence or permission.  That was the whole purpose of the flourishing business.  I am prepared to conclude on the evidence before me that the behaviour has been dishonest.  That is a matter which is relevant to how one approaches the assessment both of the account of profits and the costs to be awarded in this case.  The period of the account is to be taken from the date when the respondents commenced their infringing activities and were aware of such activities.  I am satisfied on the evidence that the activities have been going for at least five, if not six, years, and that at all relevant times the respondents in all likelihood were aware of the wrong they were committing against the applicants.  The evidence of the second respondent in the two 2000 claims when she filed an affidavit does not disclose any surprise on her part that there was anything wrong involved in what she had done.  She limited her admissions to the compact discs in question but did not say that she had no idea that this was impermissible.

30. The applicants claim an account from the respondents for the period from 23 April 1998 to 22 November 2002.  This is the period from the first seizure apparently referable to these parties, and the date of the order of Gyles J on an interlocutory basis.  This is a period of 54 months or 229 weeks.

31. The applicants have put to me, on the evidence, an assessment, which I accept, that any items of cost incurred in relation to the manufacture and sale is likely to be small.  It would appear, in the evidence, that the average price per unit being sold, subject to discounts for volume and the like, was in the order of $6 a unit.  This seems to be a conservative figure because there is evidence that the respondents were also offering DVD games as well as CD games, and the DVD games were, on the evidence, more expensive.

32. Looking at the number of sales, and the ability of Mr Fleming to obtain tolerably large numbers of infringing copies in a short period of time, and the amounts of money involved in the various accounts, the 459 discs seized at the time of execution, the large mailing list, the catalogue, and the balance of the evidence, I think that the applicants’ approximation of sales of infringing goods of approximately 150 discs per week is not unreasonable.

33. There is no evidence before me as to whether there could be seen to be a cause for sale other than through the use of the infringing mark, that is, dividing up the sale between the other body of alleged property rights that might be on the disc and the trade mark which is on the product both physically and electronically.

1. In the absence of any evidence sensibly being able to disentangle those matters, and in the context of dishonest infringement, I do not think I should make any deduction for that kind of potential analysis.

2. The applicants are prepared to accept that a modest amount should be allowed for the cost of blank stock, and put the amount which I am prepared to accept at $1 per disc.  The result of that is that the respondents should account for the period between 23 April 1998 and 22 November 2002 for profits of $5 per unit for 150 units per week for 229 weeks, namely, the sum of $171,750.  

3. Looking back at all the evidence, this is not an apparently inconsistent conclusion with the apparent level of activity of the respondents.  The applicants seek interest.  They are entitled to it.  I will grant interest calculated using the rate applied in the Supreme Court of New South Wales.  In the period, using those calculations, a total of interest of approximately $33,950 is arrived at.  That leads to a total sum of $205,700. 

4. The applicants seek judgment for a slightly discounted sum of $200,000.  I have already indicated that I am prepared to make an order for delivery up in relation to the documents currently in the possession of the applicants through their solicitors.  Thus I am prepared to make the orders as sought, which I will do in a moment.

5. As to the question of costs, there has been an affidavit of the supervising partner at the firm handling the matter, Allens Arthur Robinson, Mr James Dwyer.  Mr Dwyer has deposed to the costs of this matter.  I take the view in a matter such as this, that the applicants having comprehensively proved their case, should be put to the minimum expense possible to recover such amounts of costs as they are entitled to.

6. Order 62 rule 4(2)(c) enables me to make a lump sum order for costs instead of taxed costs.  That is asked for by the applicants, and rightly so, and I am prepared to make such an order.

7. Mr Dwyer has given evidence that the recovery in the past in proceedings such as these has ranged from 75 per cent to 96 per cent.  I do not know what the particular facts were in those cases.  On the findings I have made as to the nature of the conduct, I see no reason whatsoever why the applicant should take any discount in their costs.

8. The evidence before me has been put forward in a thorough, comprehensive and efficient manner.  The evidence discloses that, and the facts are that, a detailed and extensive body of evidence had to be put forward to the duty judge for an Anton Piller order.  That order had to be executed.  A fight or some semblance of a fight was put up in procedural matters for some time.  I conclude that the respondents have abandoned the endeavour of defending the indefensible.  I conclude that they always knew that this was indefensible legally, whatever commercial attitude they took to the applicants' rights and that, as I said earlier, this was a knowing, deliberate and dishonest infringement of the applicants' trademarks.

9. In those circumstances, I see no reason why they should not have full indemnity costs which are asked for in the gross order and I propose to award those costs in that sum. 

10. I propose to order costs in the amount of $120,000.  I have looked at the affidavit of Mr Dwyer carefully.  I do not see any reason why the costs should not be recovered in full.  As I have indicated, the case has been prepared comprehensively and efficiently.  These are not straightforward cases to prove and in all the circumstances I think the applicants should have their costs in full.

I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:

Dated:            18 December 2003

Counsel for the Applicants:	Mr R Cobden
Solicitor for the Applicants:	Allens Arthur Robinson
No appearance for or by the Respondents.
Date of Hearing:	11 December 2003
Date of Judgment:	11 December 2003