Williamson-Dickie Manufacturing Company v Lodown Distribution Limited HC Auckland CIV-2011-404-003093

[2011] NZHC 1318

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-003093

BETWEEN  WILLIAMSON-DICKIE MANUFACTURING COMPANY Plaintiff

ANDLODOWN DISTRIBUTION LIMITED First Defendant

ANDSTEVEN BARRY JONES Second Defendant

ANDVIRGINIA EASTON Third Defendant

ANDDICKIES NZ LIMITED Fourth Defendant

Hearing:         21 July 2011

Counsel:         AH Brown QC for Plaintiff

No appearance for Defendants

Judgment:      21 July 2011

JUDGMENT OF ASHER J

Solicitors/Counsel:

AH Brown QC, PO Box 2815, Shortland Street, Auckland 1140. Email:  [email protected]
Jackson Russell, PO Box 3451, Shortland Street, Auckland 1140. Email:  [email protected]

DG Collecutt, Auckland. Email:  [email protected]

Simpson Dowsett Mackie, DX CP39001, Auckland 1440. Email:  [email protected]

WILLIAMSON-DICKIE MANUFACTURING COMPANY V LODOWN DISTRIBUTION LIMITED HC AK CIV-2011-404-003093 21 July 2011

Introduction

[1]      This is an application on notice for an interim injunction.   The plaintiff, Williamson-Dickie Manufacturing Company (“Dickies”), seeks various interlocutory orders against the first defendant, Lodown Distribution Ltd (“Lodown”).   The principals of that company are the second defendant Mr S B Jones, and the third defendant Ms V Easton.   An associated company Dickies NZ Ltd is the fourth defendant.

[2]      At the outset of this hearing Mr Collecutt appeared as counsel for all four defendants, and while not consenting to the application he offered no opposition.  He did not seek leave to withdraw as the defendants may take steps in the future. However, given his position he sought leave to be excused from attending the rest of the hearing and I granted him that leave.

[3]      This application therefore proceeds by way of formal proof without there being any active opposition.   In the circumstances I only shortly summarise my reasons for decision.

Background

[4]      Dickies and Mr Jones and Ms Easton have had a business association since the late 1990s.   Companies controlled by them have, through various distribution agreements, been the prime distributors of Dickies products in New Zealand and then in Australia as well.

[5]      Dickies is an established clothing manufacturer based in the United States which I am satisfied has considerable goodwill in the Dickies name and the Dickies horseshoe logo.  I am informed that Dickies clothing has a reputation for high quality and being hard wearing clothing, and is popular in certain sections of the community, both in New Zealand and Australia.

[6]      There were various distribution and licence agreements entered into between the Jones/Easton business enterprises and Dickies.  Two primary agreements which

were  renewed  at  various  times  were  a  distribution  agreement  and  a  licence agreement.  The various relevant agreements had all expired on or by 31 December

2010.

[7]      Dickies has registered its name and logo as trademarks.  I am satisfied that it has sufficient goodwill in the name and logo to sustain a claim of passing off. Lodown and the Jones/Easton enterprises by virtue of the distribution and licence agreements had various rights to use the trademarks and represent themselves as Dickies dealers.   The relevant agreements, however, had an express clause stating that  on  termination  the distributor or  licencee  ceased  to  have any rights  to  the trademarks and were to cease and desist from using them.

[8]      It would appear from the affidavit evidence filed on behalf of Dickies that in the last few years the Jones/Easton enterprises have had financial difficulties.  They have not paid trade debts and their Australian enterprises are now in receivership or liquidation.   There is a current debt from Lodown to Dickies in the sum of US$86,887.53. There has been a deterioration of the relationship between the parties over the last two years culminating in the various agreements being allowed to expire and not being renewed.

[9]      The affidavit evidence shows that following the expiry of the agreements Lodown and enterprises associated with Mr Jones and Ms Easton have continued to trade as if they were still Dickies dealers and had a right to use the trademarks. Amongst other things they have continued to operate shops which are named and signed as if they are authorised Dickies dealers and indeed they have opened a new shop this year following the expiry of the agreements using the Dickies name.  They have used domain names that indicate they are authorised Dickies dealers and in general offer goods and services to the New Zealand public still using the Dickies name.

[10]     In the course of submissions I discussed with Mr Brown QC the right that any vendor has to sell a labeled product.  Mr Brown has made it clear that the orders sought have been drafted in a way that will still permit the defendants to sell Dickies products.  The objection in general terms is to the defendants taking any steps that

indicate that they run Dickies shops or are authorised Dickies dealers.  I am satisfied that the orders as drafted do not go further than necessary.

[11]     Given that this is a formal proof hearing I do not propose going into the particulars of the allegations and the orders that I will make.  I am satisfied that at the very least there is a serious question to be tried of breach of trademark and passing off and that the particular breaches are addressed in the orders.

[12]     I therefore make the following orders:

(1)An interim injunction is issued restraining the first defendant whether by its servants, agents, or otherwise howsoever from infringing:

(a)       Clause 10.5 of the Distribution Agreement 2005-7 by:

(i)operating the Dress-Smart, Manukau and Newmarket stores under the trade marks and trading names DICKIES or DICKIES 4 LESS;

(ii)using the DICKIES horseshoe logo as part of the trade name for the Dress-Smart, Manukau and Newmarket stores;

(iii)      continuing to operate the website   the domain names  and  the  online  trading  names  Ddickies4Less  and

Dickies4Le$$.

(b)Clause  20  of  the  Licence Agreement  2005-7  by  using  the DICKIES horseshoe logo as part of the trade name of the Dress-Smart, Manukau and Newmarket stores.

(2)An interim injunction is issued restraining the first, second and third defendants, whether by their servants, agents or otherwise howsoever from operating the Dress-Smart, Manukau and Newmarket stores under  the  trade  marks  and  trading  names  DICKIES,  DICKIES  4

LESS and the DICKIES horseshoe logo.

(2A)    An interim injunction is issued restraining the first, second and third defendants, whether by their servants, agents or otherwise howsoever from trading or selling under the trade mark or trading names DICKIES, DICKIES4LESS or any name incorporating DICKIES.

(3)An interim injunction is issued restraining the first, second and third defendants, whether by their servants, agents or otherwise howsoever from operating the website   interim injunction is issued restraining the first, second and third defendants, whether by their servants, agents or otherwise howsoever from operating and selling online using the trading names “Dickies4Less”, “Dickies4Le$$” or any trading name incorporating DICKIES.

(4A)    An interim injunction is issued restraining the first, second and third defendants, whether by their servants, agents or otherwise howsoever from directly or indirectly:

(a)      Providing, using, identifying, exposing, hosting or facilitating in New Zealand an internet service or site incorporating or using the word DICKIES as a domain name or part thereof or any similar domain name likely to damage or dilute the value of the plaintiff’s DICKIES trade name or trade mark;

(b)       Promoting or offering any goods or services for sale within

New  Zealand  by  means  of  any  internet  service  or  site

incorporating or using the word DICKIES as a domain name or part thereof;

(c)       Advertising or holding themselves out as an authorised dealer of the plaintiff.

(5)An interim injunction is issued restraining the fourth defendant from continuing to use the trade mark DICKIES as part of its registered

name.

Costs

[13]     As is usual in an interlocutory hearing the successful party is entitled to costs. I order costs on a 2B basis plus reasonable disbursements.

……………………………..

Asher J