NSK Ltd v General Equipment Co Ltd

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-001899 [2015] NZHC 1424

BETWEEN

NSK LIMITED

First Plaintiff

NSK NEW ZEALAND LIMITED Second Plaintiff

AND

GENERAL EQUIPMENT CO LIMITED Defendant

Hearing:	9 and 10 December 2015
Appearances:	Zane Kennedy and Oliver Skilton for the Plaintiffs Clive Elliott QC and Sarah-Jane Neville for the Defendant
Judgment:	28 June 2016

JUDGMENT OF MOORE J

This judgment was delivered by me on 28 June 2016 at 2:30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

NSK LIMITED & ANOR v GENERAL EQUIPMENT CO LIMITED [2015] NZHC 1424 [28 June 2016]

Contents

Paragraph

Number

Introduction ..............................................................................................................[1] Factual background and the claims........................................................................[8] Legal principles on review .....................................................................................[28] What NSK seeks to review? ..................................................................................[31] Particular discovery – principles ..........................................................................[32] Document categories ..............................................................................................[43] GE customer names and details ...........................................................................[45] The “missing” supplier invoices ..........................................................................[62] Redacted Barton emails .......................................................................................[68] Application for split trial .......................................................................................[80]

Will there be difficult demarcation questions between those issues to be

addressed at the first trial and those left for the second? .....................................[85] Will the separate question bring the proceedings to an end? ...............................[94] What potential timesaving does the separate question offer? ..............................[98] How will appeals be dealt with? ........................................................................[101] Are there any other practical considerations tending one way or the other? .....[103] (a)  Separate trials are usual in intellectual property cases ............................[104] (b)  GE’s counterclaims are amenable to a split trial .....................................[107]

(c)  Nature of the loss ..................................................................................... [110] (d) Confidentiality ......................................................................................... [113] Result ..................................................................................................................... [116] Costs ...................................................................................................................... [118]

Introduction

[1]      The first plaintiff, NSK Limited, is a large multi-national company based in Japan.  It manufactures and distributes ball and roller bearings for use across a broad range of industries.  The second plaintiff, NSK New Zealand Limited, is a related entity  of  NSK  Ltd.    It  carries  on  business  in  New  Zealand  and  imports  and distributes NSK manufactured and branded bearings.   For the purposes of this judgment it is generally unnecessary to make a distinction between the two entities which I shall refer to collectively as NSK.

[2]      The defendant, General Equipment Co Limited (“GE”), is an Auckland-based company which imports and distributes various industrial products including ball and roller bearings from overseas suppliers.   Some of the product it sources from overseas are NSK-branded bearings.  It is a parallel importer of NSK bearings.  NSK alleges that GE imported and sold counterfeit NSK-branded bearings to various New Zealand-based distributors.

[3]      The plaintiffs claim this infringes NSK’s registered trademarks, breaches the Fair Trading Act 1986 (“the FTA”) and constitutes the tort of passing off. Additionally, NSK claims that GE misrepresented to its customers that the bearings were genuine NSK manufactured bearings.

[4]      GE denies any wrongdoing.  It does not admit the bearings it imported were counterfeit.  It claims it reasonably believed its suppliers were authorised or licensed by NSK.   It says it acted without intention to deceive customers and its use of trademarks was unlikely to deceive or confuse.

[5]      GE goes further.  It counterclaims in injurious falsehood (trade libel),…