Polyaire Pty Ltd v K-Aire Pty Ltd & Ors [2004] HCATrans 303 (12 August 2004)

--

Polyaire Pty Ltd v K-Aire Pty Ltd & Ors [2004] HCATrans 303 (12 August 2004)

Last Updated: 19 August 2004

[2004] HCATrans 303

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Adelaide No A10 of 2004

B e t w e e n -

POLYAIRE PTY LTD

Applicant

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

Application for special leave to appeal

McHUGH J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON THURSDAY, 12 AUGUST 2004, AT 10.56 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 applicant. (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: Do not sit down, Mr Catterns.

MR CATTERNS: May it please the Court. As your Honours know, the appeal that our friends seek to bring would relate to the meaning of the phrase “applies the design or any fraudulent imitation of it”, so the question is one of fraudulent imitation. Your Honours, our submission is that the Full Court got it right, and, indeed,
their Honours’ decision was inevitable, given his Honour Justice Besanko’s decision. For our friends to succeed, they have to overturn the authority of Malleys Ltd v JW Tomlin Pty Ltd - - -

GUMMOW J: Why?

MR CATTERNS: Because, your Honour, if the Full Court is right in Malleys v Tomlin, as applied in Firmagroup Australia Pty Ltd v Byrne & Davidson Doors (Vic) Pty Ltd, then the differences which take the alleged infringement out of obvious imitation must have been made to disguise the copying. That is what “fraudulent” means.

GUMMOW J: That is the problem.

MR CATTERNS: Does your Honour mean - - -

GUMMOW J: Why do you say that?

MR CATTERNS: Well, your Honour, that is what the High Court said in Malleys.

GUMMOW J: No, not really.

McHUGH J: Well, it is a throw-away line.

MR CATTERNS: But then the Court applies it again in the B & D v Firmagroup Case. The reason is this, your Honours - - -

GUMMOW J: It is an evidentiary embellishment, that is all.

MR CATTERNS: No, with respect, your Honour.

GUMMOW J: Well, let me suggest to you what it is. The plaintiff comes along and says, “Fraudulent infringement”. The defendant says, “No, look at it, it is so different”. The plaintiff then says, “It is different all right, but you only made it different to disguise it”, and the Court ends up in Malleys saying, “Even so, it has nevertheless been such an ingenious extension that it is not even a fraudulent imitation. It has travelled even beyond that”.

MR CATTERNS: But, your Honour, to give the concept - - -

GUMMOW J: Is that not the way the passage runs?

MR CATTERNS: Well, your Honour, in fact, their Honours put aside – I beg your pardon, your Honour.

GUMMOW J: In that when you read it, this notion of disguising had no part to play in Justice Farwell’s decision, which is the root of all this, is it not?

MR CATTERNS: Well, not in Justice Farwell’s decision, which was an extempore decision, but in some of the other earlier cases it did, your Honour. Their Honours say it is the disguise which is the essence of the fraud, and, your Honour, there is a similar idea in other aspects of intellectual property, such as copyright – the differences be colourable. I respectfully submit that to give content to the - - -

GUMMOW J: You may be right, in the end, that there is a point.

MR CATTERNS: Your Honour, there is a point, we must accept that. As we have pointed out to your Honours, as our friends have pointed out, the Act has now been amended to remove this concept, but we accept that the concept will continue to apply transitionally for designs currently granted, or, indeed, currently in the stage of application.

GUMMOW J: Now, what is your complaint about the trial judge?

MR CATTERNS: May I take your Honours to the findings at page 74 - - -

GUMMOW J: Is that what we probably have to go back to?

MR CATTERNS: Yes, with respect, your Honour. Your Honour, perhaps if I can go a couple of pages earlier, at page 72 – we can do this quickly, your Honours – in looking at the question of novelty in paragraph 355, his Honour noted three matters which gave the - - -

GUMMOW J: He dealt with several infringements, did he not?

MR CATTERNS: Yes, your Honour. The only one that is relevant is RD2, as it is called.

GUMMOW J: But what he said about RD2 has to be understood with what he had already said back on page 58 - - -

MR CATTERNS: His Honour certainly set out the principles - - -

GUMMOW J: - - - in dealing with RD1.

MR CATTERNS: Yes. His Honour there sets out - - -

GUMMOW J: It is a bit unfair to him just to jump to RD2.

MR CATTERNS: Well, your Honour, I certainly accept that his Honour set out the principles in Malleys v Tomlin.

GUMMOW J: Paragraphs 289 and 290 on page 58.

MR CATTERNS: Your Honour, I would go on and go over to the next page, page 59, paragraph 293, where the High Court – your Honours see at the fourth line of the paragraph that his Honour refers to:

the differences between the plaintiff’s registered design and the accused article was to disguise the copying –

and points out that –

In Firmagroup, the High Court approved a passage from the reasons of the trial Judge (King J) –

where, looking at the last sentence of the quote –

the change in balance of the features and the lengthening of the article are not mere disguise –

That is applying the Malleys v Tomlin test, as we all agreed, both on appeal and at trial, was the appropriate test. Your Honours, we do not say the trial would have been run differently if our friend had propounded a different test.

GUMMOW J: What is the evidentiary gap in the finding?

MR CATTERNS: I am sorry, your Honour - - -

GUMMOW J: What does the trial judge fail to find that you say he had to find in order to make out a case according to the imitation?

MR CATTERNS: Your Honour, at page 72, his Honour found that three features gave the design its novelty, and it is well settled that they are the crucial features for the purposes of infringement: (1) the ends of the blades – to put it shortly; (2) the chamfered inner lip or overhang; (3) the vertical ribs. Then his Honour considers the question of obvious imitation at page 74, but I should notice at 360 his Honour refers to those earlier passages your Honour Justice Gummow just took me to. In paragraph 362, his Honour says:

That leaves as differences between RD2 and KA1 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 –

that is applying Malleys –

so that KA1 is an obvious imitation of RD2? Although there are a number of similarities between RD2 andKA1, 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 –

therefore not an obvious imitation. Now, if his Honour were applying Malleys, his Honour would have to find that those differences were mere disguise. He did not.

GUMMOW J: Well, he comes to “a fraudulent imitation”. Page 75, that is what we are worried about.

MR CATTERNS: Yes, your Honour, he does, but if we are applying Malleys v Tomlin, we have to find that these are fraudulent in the sense that they are disguising the copying. Your Honours, at 75 he finds the requisite knowledge that there was an IP involved and copying, and there is no doubt about that. The instructions are found at the bottom of page 76. His Honour’s reasoning on fraudulent imitation is at 77, paragraph 376. He makes a finding that Mr Rogers had:

knowingly, consciously and deliberately based his design on the plaintiff’s outlet director part –

refers to the similarities, then, crucially, your Honours, in 378 says:

The elements of fraudulent imitation are made out unless it can be said that KA1 embodies a shape or configuration which is distinctly different –

Now, that is not the Malleys v Tomlin test. That is a phrase picked out of Turbo Tek Enterprises and an emphatic phrase, indeed. Then his Honour goes on:

In my opinion, the shape and configuration of KA1 is not distinctly different from RD2.

His Honour refers to the differences and then his Honour says, “However”. This is the exact nub of the error, your Honours. His Honour should have held: “However, these differences are made merely to disguise the copying”. Your Honours, as the Full Court held, his Honour could not have done that because as a matter of fact one of the differences just as a moulding artefact and another one, we submit, relates to the derivation of the drawings from an earlier project. So, your Honour, these features are not copying features and disguise features; they are simply not present. So if Malleys v Tomlin - - -

GUMMOW J: Mr Rogers was a critical witness, was he not?

MR CATTERNS: Yes, your Honour, we called him and he - - -

GUMMOW J: And his Honour did not like him.

MR CATTERNS: Precisely, your Honour.

GUMMOW J: That was very apparent at page 29.

MR CATTERNS: Yes, your Honour, we make no attack on his Honour’s findings. Your Honour, the question of access to our friend’s product and knowledge of the likelihood of intellectual property rights were proved and there is no challenge of that. We admit that - - -

GUMMOW J: Now, what was Mr Rogers saying he was doing in this design process?

MR CATTERNS: Your Honour, there is no dispute about what he did.

McHUGH J: Well, he was instructed, was he not, to design a product that was similar to other products in the market?

MR CATTERNS: Yes, your Honour, precisely. A number of the elements of the instructions led him towards the similarities – there is no question about that – but he was adapting drawings from a preceding part which lacked the vertical steeply chamfered overhang, and, because of the moulding technique, he did not need to have anything that had the little ribs on the side. So those were - - -

GUMMOW J: This question of fraudulent copying becomes a bit ethereal, really. What you say the law is becomes a bit ethereal.

MR CATTERNS: Well, your Honour, that is why we have thrown the concept away in our law now, except for transitional purposes.

GUMMOW J: Well, it certainly has been with us for 15 years or so.

MR CATTERNS: Yes, your Honour, and more, counting limitation period, we accept. That is why we do not say the thing still does not have life. But, your Honours, our submission is that that pithy phrase – in B & D v Firmagroup the High Court again says, no, the argument has not cast any doubt on that short but pithy phrase – is the only intelligent way, we submit, to give content to the idea of fraudulent imitation, because, your Honours, if it was merely copying or knowledge, which we agree are necessary but, we submit, are not sufficient – if it was merely that, why is it fraudulent? That is just copying. What makes it fraudulent, we submit, is the element of disguise where you are making just a few changes to take yourself out, being aware that you are sailing so close to the wind.

So, your Honours, really, we do not need to belabour it. Our respectful submission is that two of the three crucial novel features were absent, therefore his Honour rightly held no obvious imitation. If Malleys v Tomlin is right, then there could not have been fraudulent imitation unless his Honour held that they were adopted as mere disguise. They were not there at all. It was not a matter of omitting them as a matter of mere disguise. They just simply were not copied. So, your Honours, we respectfully submit that on those two High Court cases there was no doubt that there was no fraudulent imitation.

The only question is whether or not there ought to be a reconsideration of Malleys v Tomlin and B& D v Firmagroup. As we submit, your Honour, we were not disadvantaged by this not being run at trial, but the Court does not have the benefit of lower court decisions assisting it. There is no conflict in the Federal Court, because the judgment of his Honour Justice Lockhart, with which his Honour Justice Gummow agreed in Dart v Decor, in the very next paragraph, after quoting Dunlop, quotes Malleys v Tomlin.

So the question is whether the Court wants to look again at Malleys v Tomlin and B & D; Malleys having stood since 1960 without there being any cries, the Frankie Committee having looked at it in 1973 and saying, “We can keep this going”. Perhaps most importantly, Malleys v Tomlin, the idea that there must be disguise to give content to the word “fraudulent” is the only way one can give that content.

We respectfully submit, even if our friends were to succeed in putting a different complexion on the meaning of “fraudulent imitation” from that which the Court held in Malleys v Tomlin, on these particular facts, where two of the three features that gave the design its novelty are missing, it is not going to find fraudulent imitation even if we go back to the Justice Farwell test. So we respectfully submit that special leave should be refused. May it please the Court.

McHUGH J: The Court need not hear you in reply, Mr Yates. There will be a grant of special leave in this matter.

AT 11.13 AM THE MATTER WAS CONCLUDED