FEDERAL COURT OF AUSTRALIA
STIHL Pty Ltd v Reggie Bowman Pty Ltd [2023] FCA 1347
File number(s): VID 198 of 2023 Judgment of: BUTTON J Date of judgment: 3 November 2023 Catchwords: PRACTICE AND PROCEDURE – application for default judgment under r 5.23 of the Federal Court Rules 2011 (Cth) – where respondents have failed to file a defence – whether the court is satisfied on the basis of pleaded facts that the applicant is entitled to the relief claimed
TRADE MARKS – infringement of registered trade marks – where applicant seeks injunctions to prevent the respondents from continuing to use the registered trade marks in the course of its business – where infringing conduct is flagrant – award of nominal and additional damages under s 126 of the Trade Marks Act 1995 (Cth)
COSTS – indemnity costs – where applicant seeks costs against the respondents on an indemnity basis – where the relevant contracts include agreements to pay costs on an indemnity basis in certain circumstances – where the respondents unreasonably rejected a Calderbank offer – where the respondents’ conduct of the proceeding has resulted in wasted time and resources – indemnity costs awarded
Legislation: Competition and Consumer Act 2010 (Cth) s 75B, Sch 2 ss 18, 29
Judiciary Act 1903 (Cth) ss 55A, 55B
Trade Marks Act 1995 (Cth) ss 6, 26, 120, 126
Federal Court Rules 2011 (Cth) rr 5.22, 5.23
Legal Profession Uniform Law Application Act 2014 (Vic) Sch 1 s 10
Cases cited: Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (2007) 157 FCR 564
Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2007) 161 FCR 513
Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606
De Pardo v Legal Practitioners Complaints Committee (2000) 97 FCR 575
Deputy Commissioner of Taxation v Sibai [2015] FCA 1465
Facton Ltd v Rafai Fashions Pty Ltd (2012) 199 FCR 569
GCTR Investments Pty Ltd v DJD Family Holdings [2023] FCA 260
Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Ltd (No 5) (2022) 407 ALR 370; [2022] FCA 837
Hells Angels Motorcycle Corporation (Australia) Pty Ltd v Redbubble Ltd (2019) 369 ALR 408; [2019] FCA 355
Little v Registrar of High Court of Australia (1991) 29 FCR 544
MCCA Asset Management Ltd v Kamata Homes Pty Ltd (No 2) [2019] VSC 842
Nasib Baik Pty Ltd v Sydney Ridelender Pty Ltd [2022] FCA 301
Oil Basins Limited v Watson [2017] 252 FCR 420
Pinnacle Runway Pty Ltd v Triangl Limited (2019) 375 ALR 251; [2019] FCA 1662
Speedo Holdings BV v Evans (No 2) [2011] FCA 1227
Watson v Kriticos (Costs of Summary Judgment Application) [2021] FCA 917
Division: General Division Registry: Victoria National Practice Area: Intellectual Property Sub-area: Trade Marks Number of paragraphs: 85 Date of hearing: 27 October 2023 Counsel for the Applicant: A N McRobert Solicitor for the Applicant: Norton Rose Fulbright Australia Counsel for the First and Second Respondents: D Scott…
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- Case
- [2023] FCA 1347
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were whether the defendants had infringed the plaintiff's trademarks, breached the dealer agreement, and contravened consumer law. The court examined the evidence and pleadings to determine liability. It found that the defendants had indeed infringed the trademarks by using them in their business and continued to do so despite termination of the dealer agreement. The court also held that the defendants had breached consumer law by falsely representing themselves as authorised dealers after the termination of the agreement.
The court's reasoning was grounded in the explicit terms of the trademark registrations, the dealer agreement, and consumer protection statutes. It noted that the defendants had flagrantly used the trademarks without authorisation, leading to significant consumer confusion. The court further found that the defendants' conduct was unreasonable, as they had rejected a Calderbank offer and engaged in tactics that wasted the court's time. Consequently, the court awarded indemnity costs against the defendants, reflecting their unreasonable behaviour during the proceedings.
In summary, the court granted the plaintiff comprehensive relief, including permanent injunctions, damages, and indemnity costs. The defendants were ordered to cease all infringing activities, pay nominal and additional damages, and refrain from making false representations about their authorisation as dealers. The court's decision underscores the importance of respecting intellectual property rights and adhering to contractual and statutory obligations.
Orders
Orders of the court
A. Registered Trade Mark Infringement
1. Pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the Court declares that the First Respondent has infringed the “STIHL Trade Marks” (being Australian trade mark registration numbers 859547, 806691 and 962755) by advertising, offering for supply and supplying goods and services in respect of which one or more of the STIHL Trade Marks are registered (being the goods and services set out in Annexure A to these orders [Annexures are omitted from this record of the orders made]) (Relevant Goods and Services) by:
(a) using the name and mark “STIHL SHOP BERWICK”; and
(b) displaying the STIHL Trade Marks at the “Premises” (being 21–23 Enterprise Avenue, Berwick, Victoria, 3806).
2. Pursuant to s 126(1)(a) of the Trade Marks Act 1995 (Cth) (TM Act) and/or ss 22 and/or 23 of the FCA Act, the First Respondent, whether by itself or by its servants or agents, or howsoever otherwise, be permanently restrained from infringing the STIHL Trade Marks by engaging in the following acts without the authority of the Applicant or the Third Respondent:
(a) distributing, advertising, promoting, marketing, offering for sale, supplying or selling in Australia or to Australian customers (including through any website directed or targeted to Australian customers) any of the Relevant Goods and Services under or by reference to the STIHL Trade Marks and/or the name “STIHL SHOP BERWICK”;
(b) displaying the STIHL Trade Marks at the Premises; and
(c) authorising any other person to engage in any of the acts described above.
3. Pursuant to s 126(1)(a) of the TM Act and/or ss 22 and/or 23 of the FCA Act, within 21 days of the date of this order, the First Respondent is to:
(a) cause to be removed from the Premises, and any vehicle used in the business conducted from the Premises (Business), all signage displaying the STIHL Trade Marks;
(b) amend all social media accounts and online business listings used in relation to the Business so as to remove the STIHL Trade Marks (and to remove any other signs that are substantially identical with, or deceptively similar to, the STIHL Trade Marks);
(c) deregister the domain name “stihlshopberwick.com.au”; and
(d) decommission and cease using all email addresses that include the word “STIHL”.
4. Pursuant to s 126(1)(b) of the TM Act, the First Respondent pay the Applicant nominal damages in the amount of $5,000.
5. Pursuant to s 126(2) of the TM Act, the First Respondent pay the Applicant additional damages in the amount of $50,000.
B. STIHL Dealer Agreement and Bowman Guarantee
6. Pursuant to s 21 of the FCA Act, the Court declares that the agreement entered into between the Applicant and the First Respondent dated 17 April 2013 and titled “STIHL Dealer Agreement” was terminated by the Applicant by the “Notice of Termination” given on 3 February 2022, such termination taking effect on 5 April 2022.
7. Pursuant to s 21 of the FCA Act, the Court declares that the amounts demanded by the Applicant in respect of the invoices set out in Annexure B to these orders (Supplied Products) constitute a “Debt” within the meaning of the agreement entered into between the Applicant and the Second Respondent dated 17 April 2013 and titled “Director’s Guarantee and Indemnity”.
8. Pursuant to s 21 of the FCA Act, the Court declares that the First Respondent and Second Respondent are jointly and severally liable to pay to the Applicant the sum of $39,592.06 in respect of the Supplied Products.
9. The First Respondent or Second Respondent pay to the Applicant the sum of $39,592.06 in respect of the Supplied Products.
10. Pursuant to s 51A of the FCA Act, the First Respondent or Second Respondent pay interest on the sum in paragraph 9 above from 5 April 2022 to 3 November 2023 (being the date of judgment) calculated in accordance with the Interest on Judgments Practice Note (GPN-INT) and at the rates published by the Federal Court of Australia on its website page titled “Pre-judgment & Post-judgment Interest Rates”.
C. Australian Consumer Law
11. Pursuant to s 21 of the FCA Act, the Court declares that by representing, after 5 April 2022, that the First Respondent is an authorised STIHL dealer and/or that the Business is a business authorised by the Applicant, the First Respondent has contravened ss 18, 29(1)(g), and 29(1)(h) of the Australian Consumer Law (that is Sch 2 to the Competition and Consumer Act 2010 (Cth)) (ACL).
12. Pursuant to s 21 of the FCA Act, the Court declares that the Second Respondent was involved in the First Respondent’s contravention of the ACL set out in paragraph 11 above, within the meaning of s 75B of the Competition and Consumer Act 2010 (Cth).
13. Pursuant to s 232 of the ACL and/or s 22 and/or 23 of the FCA Act, the First Respondent and Second Respondent, whether by themselves or by their servants or agents, or howsoever otherwise, be permanently restrained from, without the authority of the Applicant or the Third Respondent, representing that:
(a) the First Respondent is an authorised STIHL dealer; and/or
(b) the Business is a business authorised by the Applicant.
D. Costs of the proceeding
14. The First and Second Respondents pay the Applicant’s costs of the proceeding (including all reserved costs) on an indemnity basis as agreed or, if not agreed, in an amount to be determined by a Registrar of this Court on a lump sum basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
It was submitted that the statement of claim failed to plead standing. I reject that contention. As set out above, the statement of claim specifically pleaded that the third respondent was the owner of the STIHL Trade Marks and that STIHL was bringing the proceeding on the basis that it was an “authorised user” of those trade marks within the meaning of ss 8 and 26 of the TM Act. Pursuant to s 26(1)(b)(i) of the TM Act, an “authorised user” may bring an action for infringement of a trade mark at any time with the consent of the registered owner. Section 26(2) requires that the registered owner be made a defendant in the action. The owner of the trade marks in question was joined to the proceeding as the third respondent. The statement of claim also referred, in particulars of the plea of authorisation, to the consent of the third respondent having been given in a letter dated 15 March 2023 and signed on 20 March 2023.DISCRETIONARY CONSIDERATIONS The first and second respondents relied on the affidavit of Mr Scott that was prepared in support of Mr Scott’s application to be appointed a litigation guardian. In that affidavit, Mr Scott deposed to his experience of Mr Bowman’s asserted “impairment”, and provided a list of barristers and solicitors said to have been approached to act and who had either declined or not responded. No details were provided of the dates on which these practitioners were approached, or the terms on which they were asked to accept instructions (eg, whether they would be required to work through Mr Scott as an intermediary between them and Mr Bowman). Mr Scott’s affidavit annexed a letter from “Empowering Lives”, said to be “an initiative of Teen Challenge Queensland”. The letter was signed by “Kylie Ransley”, “Director” and stated:To whom it may concern,On the 26th of October, I conducted an Arrowsmith Symbol Relations Assessment with Ashley Bowman. The Arrowsmith Program is a brain cognition program based on neuroplasticity that helps students to strengthen neural pathways that hinder learning or their ability in the workplace and life.The Symbol Relations cognitive function is responsible for understanding and connecting ideas and processing complex relationships and concepts necessary for comprehension. This cognitive function is involved in•cause and effect reasoning•understanding the ‘why’ of things•grasping concepts across all academic disciplines •comprehension of what is read or heard •making rational and considered decisions •understanding the world, oneself, and others •fluid reasoning and flexibility of thought •logical grasp of mathematical concepts •understanding jokes, irony, metaphor, analogies •processing speed•semantic grasp of language necessary for comprehension and vocabulary development•perspective taking which involves considering other points of view •Reading comprehension •Mathematical reasoning •Decision making •Negotiation After conducting the assessment, Ashley’s results showed that he has a rating of severe in this area and the Symbol Relations Program is recommended.