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Facton Ltd & Ors v Remmy Cardin Pty Ltd [2014] FCCA 627 (4 April 2014)
Last Updated: 11 April 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
FACTON LTD & ORS v
REMMY CARDIN PTY LTD
|
|
Catchwords: COPYRIGHT – Infringement
– default judgment – assessment of damages.
|
Copyright Act 1968 (Cth), ss.36, 37, 38, 115, 131D, Part
VTrade Marks Act 1995 (Cth), ss.120, 191A Federal Circuit Court
Rules 2001(Cth), rr.13.03A(2), 13.03B(2)
|
Second Applicant:
|
G-STAR RAW C.V.
|
Third Applicant:
|
G-STAR AUSTRALIA PTY LTD (ACN 084 011 852)
|
Respondent:
|
REMMY CARDIN PTY LTD (ACN 097 684 145)
|
Delivered on:
|
4 April 2014
|
REPRESENTATION
Solicitor appearing for
the Applicants:
|
Mr J Feder
|
Solicitors for the Applicants:
|
K&L Gates
|
Counsel for the Respondent:
|
The Respondent did not appear
|
ORDERS
PENAL NOTICE TO THE RESPONDENT:
IF YOU
A. REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME
SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
B. DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER
REQUIRES YOU TO ABSTAIN FROM DOING,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF
PROPERTY OR OTHER PUNISHMENT.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES
ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE
TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.
THE COURT DECLARES THAT:
(1) The Respondent has:-
- (a) infringed
the G-Star Trade Marks (as defined in paragraph 6 of the Statement of Claim
filed 13 August 2013) in breach of s.120 of the Trade Marks Act 1995
(Cth);
- (b) infringed
or authorised the infringement of the Copyright Works (as defined in paragraph 8
of the Statement of Claim filed 13
August 2013) in breach of ss.36, 37 and 38 of
the Copyright Act 1968 (Cth);
- (c) contravened
ss.18 and 29 of the Australian Consumer Law as found in Schedule 2 to the
Competition and Consumer Act 2010 (Cth); and
- (d) engaged in
conduct which constitutes the tort of passing
off.
THE COURT ORDERS THAT:
(1) The Respondent, whether by itself, its director, its employees, servants,
agents or otherwise howsoever be restrained in trade
or commerce from
:-
- (a) importing,
manufacturing, marketing, advertising, promoting, supplying, exhibiting in
public, offering for sale and selling the
Imported Products (as defined in
paragraph 12 of the Statement of Claim filed 13 August 2013), the Dandenong
Store Jeans (as defined
in paragraph 3 of the Affidavit of Simon Ranjitan
Casinader affirmed 25 November 2013) or any other clothing or clothing
accessories
to which the G-Star Trade Marks and the Copyright Works have been
affixed or applied without the knowledge, authority or licence
of the Applicants
(‘Counterfeit G-Star Products’);
- (b) disposing
or dealing with the Imported Products, Dandenong Store Jeans and the Counterfeit
G-Star Products in any other way than
in accordance with order 2 below;
- (c) authorising,
causing, procuring or inducing any person to do any act which would be an
infringement of the injunctions referred
to in order(1)(a) above;
- (d) representing
that the Imported Products, Dandenong Store Jeans or the Counterfeit G-Star
Products are imported, manufactured,
advertised, promoted, offered for sale or
sold with the sponsorship or approval of the Applicants;
- (e) representing
that the Imported Products, Dandenong Store Jeans or Counterfeit G-Star Products
are the G-Star products;
- (f) representing
that the Imported Products, Dandenong Store Jeans or the Counterfeit G-Star
Products emanate from the same trade
source as the G-Star products;
- (g) representing
that the Imported Products, Dandenong Store Jeans or the Counterfeit G-Star
Products are made by the Applicants;
- (h) representing
that the Imported Products, Dandenong Store Jeans or the Counterfeit G-Star
Products are licensed, authorised, sponsored,
approved or endorsed by the
Applicants; and
- (i) passing
off:-
- (i) its
business as having the sponsorship, approval or a connection or affiliation in
the course of trade with the Applicants and
the G-Star products; and
- (ii) the
Imported Products and the Dandenong Store Jeans as and for the G-Star
products.
(2) The Respondent, whether by itself, its director, its employees, servants,
agents or otherwise howsoever deliver up to the Applicants:-
- (a) all of the
Imported Products and the Counterfeit G-Star Products in its possession, custody
or control; and
- (b) any and all
brochures, pamphlets, advertising, labels, swing tags, promotional or marketing
material and the like in its power,
possession, custody or control which bear
the G-Star Trade Marks or the Copyright Works.
(3) The Respondent pay the Applicants $500 as compensation for loss of
sales.
(4) The Respondent pay the Applicants $15,000 damages for loss of reputation.
(5) The Respondent pay the Applicants $25,000 additional damages pursuant to
s.115 of the Copyright Act 1968 (Cth).
(6) The Respondent pay the Applicants’ costs of $13,293.19 plus interest.
(7) The Applicants serve a copy of these Orders on the Respondent as soon as is
practicable.
FEDERAL CIRCUIT COURT OF AUSTRALIA AT
MELBOURNE
|
MLG 1269 of
2013
First Applicant
Second Applicant
G-STAR AUSTRALIA PTY LTD (ACN 084 011 852)
|
Third Applicant
And
Respondent
REASONS FOR JUDGMENT
- The
Applicants commenced this proceeding in relation to an alleged breach of
copyright, amongst other claims, on 13 August 2013 by
filing an Originating
Application and Statement of Claim (‘the documents’).
- The
documents were served on the Respondent on 16 August
2013.[1]
- The
proceeding was listed for a directions hearing on 14 October 2013. The
Respondent failed to attend the directions hearing and
the Respondent has failed
to file and serve a notice of address for service.
- At
the directions hearing, Orders were made for the Applicants to file any
interlocutory application seeking default judgment against
the Respondent by 1
December 2013, together with any affidavit material in support of that
application.
- The
Applicants filed an Interlocutory Application and supporting affidavits seeking
default judgment against the Respondent on 29
November 2013. The Respondent was
served with those documents.[2]
- The
Applicants rely on the following affidavits in support of their application
seeking default judgment against the Respondent:-
- (a) Affidavit
of Shalini Manuja Jayaweera affirmed on 11 October 2013 which sets out the
company searches conducted for the Respondent
(‘the Jayaweera
Affidavit’);
- (b) Affidavit
of Simon Ranjitan Casinader affirmed on 25 November 2013 (‘the Casinader
Affidavit’) which details Mr Casinader’s
visit in November 2013 to
the Respondent’s retail store, Remmy Cardin, in Dandenong Victoria
(‘the Dandenong Store’)
and the “G-Star” branded jeans
he purchased at the Dandenong Store (‘Dandenong Store Jeans’);
- (c) Affidavit
of Jonathan Ariel Feder affirmed on 25 November 2013 (‘ the first Feder
Affidavit’) which details the seizure
of a package containing 18 pairs of
“G-Star” branded jeans by the Australian Customs and Border
Protection Service (‘Customs’)
imported by the Respondent
(‘the Imported Products’) and correspondence with the
Respondent;
- (d) Affidavit
of Abhimanyu Arunachalam affirmed on 25 November 2013 (‘the Arunachalam
Affidavit’) which details Mr Arunachalam’s
visit to the
Respondent’s retail store, Remmy Cardin Hip Hop Master, in Footscray
Victoria and the branded clothing that was
on display for sale at this retail
store; and
- (e) Affidavit
of Piet Poelmann sworn on 28 November 2013 (‘the Poelmann
Affidavit’) which details how the Imported Products
and Dandenong Store
Jeans were identified as counterfeit and the damage suffered by the Applicants
as a result of the Respondent’s
conduct;
- (f) Affidavit
of Jonathan Ariel Feder affirmed on 2 December 2013 (‘the second Feder
Affidavit’) which details documents
produced under subpoena by Customs and
the Court documents and Orders made against the Respondent from a previous
proceeding issued
in the Federal Court of Australia by New Era Cap Company
Inc.
Default judgment
- Rule
13.03B(2) of the Federal Circuit Court Rules 2001 (Cth) (‘the
Rules’) provides that:-
- “(2)
If a respondent is in default, the Court may:
- (a) order
that a step in the proceeding be taken within the time limited in the order;
or
- (b) if the
claim against the respondent is for a debt or liquidated damages—grant
leave to the applicant to enter judgment
against the respondent
for:
- (i) the
debt or liquidated damages; and
- (ii) if
appropriate—costs; or
- (c) if the
proceeding was commenced by an application supported by a statement of claim or
the Court has ordered that the proceeding
continue on pleadings—give
judgment against the respondent for the relief that:
- (i) the
applicant appears entitled to on the statement of claim; and
- (ii) the
Court is satisfied it has power to grant; or
- (d) give
judgment or make any other order against the respondent; or
- (e) make an
order mentioned in paragraph (b), (c) or (d) to take effect if the respondent
does not take a step ordered by the Court
in the proceeding in the time limited
in the order.”
- Rule
13.03A(2) of the Rules defines when a respondent is in default, including the
following types of default which are relevant in
the present
case:-
- “(2)
For rule 13.03B, a respondent is in default if the
respondent:
- (a) has not
satisfied the applicant’s claim; and
- (b) fails
to:
- (i) give an
address for service before the time for the respondent to give an address has
expired; or
- (ii) file a
response before the time for the respondent to file a response has expired;
or
- (iii)
comply with an order of the Court in the proceeding; or
- (iv) file
and serve a document required under these Rules; or
- (v) produce
a document as required by Part 14; or
- (vi) do any
act required to be done by these Rules; or
- (vii)
defend the proceeding with due
diligence.”
- The
Respondent is clearly in default. It has not:-
- (a) filed an
address for service;
- (b) filed a
defence or a genuine steps statement;
- (c) done the
acts required by the Rules; or
- (d) defended
the proceeding with due diligence, or at all.
- Given
the documents filed on 13 August 2013, together with the default of the
Respondent, r.13.03B(2)(c)(i) of the Rules applies.
The Court does not require
proof by way of evidence of the Applicants’ claim. Rather, it needs to be
satisfied that on the
face of the Statement of Claim there is a claim for the
relief sought, and that the Court has the necessary
jurisdiction.[3]
- I
am satisfied on the face of the Statement of Claim that there is a valid claim
for the relief sought. That is supported by the various
affidavits relied upon
by the Applicants in support of their application for default judgment (as set
out in paragraph 6 of these
Reasons). Whilst strictly speaking, the proofs
needed to support the factual assertions made in the Statement of Claim filed 13
August
2013 are not necessary, I find they exist in admissible form in the
affidavits relied upon by the Applicants. The Applicants have
made out their
case. I am satisfied also that this Court has the necessary jurisdiction to make
the declarations sought by the Applicants
and order the injunctions, delivery up
and damages orders as also sought by the Applicants. The Applicants seek relief
for the Respondent’s
trade mark and copyright infringement, false
representations in trade and commerce and for the conduct of passing off.
Jurisdiction
- The
Court has jurisdiction with respect to Australian Consumer Law claims under
Schedule 2 of the Competition and Consumer Act 2010 (Cth) (‘the
Competition and Consumer
Act’)[4] and may grant
injunctions as deemed appropriate.[5]
- The
Court has jurisdiction to hear and determine civil copyright matters under the
Copyright Act 1968 (Cth) (‘the Copyright Act’), as amended by
the Copyright Amendment (Parallel Importation) Act 2003
(Cth). Relevantly, the Court can deal with matters arising under Part V of
the Copyright Act.[6]
- The
Court also has jurisdiction under the Trade Marks Act 1995 (Cth)
(‘the Trade Marks Act’) in relation to infringement
actions.[7]
- The
Court’s power to grant declaratory relief is discretionary. It is
appropriate on the facts of this case to grant declaratory
relief in the terms
as sought by the Applicants which is set out in Annexure A of the
Applicants’ Outline of Submissions for
Default Judgment filed 20 December
2013.
- The
Applicants also seek injunctive relief restraining the Respondent from further
breaches of the same type. I adopt the reasoning
of Murphy J in Facton Ltd v
Erdogan (No.1) [2012] FCA 924 at [15] which is equally apposite to
the facts in this case:-
- “...
The power of the Court to grant such relief is controlled by the concluding
words of s 80(1) of the Competition and Consumer Act 2010 (Cth), to do so
“in such terms as the Court determines to be appropriate”. I have
granted injunctive relief in the terms
in which it was sought by the applicants.
In my view the injunctions sought clearly set out the conduct that the
respondent is bound
to refrain from, and there is a clear and sufficient nexus
between the injunctions and the matter before the Court. In summary they
operate
to restrain the respondent from again importing, manufacturing, advertising,
marketing, distributing, offering for sale and
selling Counterfeit G-Star
Products, or assisting, causing, procuring or inducing any person to do any act
which would be an infringement
of that restraint. They operate to restrain the
respondent from representing that Counterfeit G-Star Products are genuine G-Star
Products, or that they emanate from the same trade source, or are made by the
applicants or any of them.”
The relevant facts
- The
Second Applicant (‘G-Star Raw’) designs, manufactures, distributes
and sells G-Star products (as defined in paragraph
4 of the Statement of Claim
filed 13 August 2013) throughout the world. The First Applicant
(‘Facton’) licenses the use of the G-Star Trade Marks (as
defined in paragraph 6 of the Statement of Claim filed 13 August 2013) to G-Star
Raw
for use on the G-Star products on an exclusive basis and the Third Applicant
(‘G-Star Australia’) is the exclusive wholesaler
and distributor of
the G-Star products in Australia.
- G-Star
Raw and its predecessors in business have advertised and promoted the
“G-Star” brand and the G-Star products since
1989. G-Star Raw owns
and operates the G-Star Website.
- G-Star
Raw sells the G-Star products through “G-Star” branded stores and
independent retailers in 70 countries. G-Star
Australia sells the G-Star
products to:-
- (a) its
franchisee who owns and operates 22 concept/flagship G-Star stores throughout
Australia; and
- (b) over 40
independent retailers throughout Australia which include Myer and David
Jones.
- G-Star
Australia also owns and operates G-Star Outlet Stores in Australia.
- G-Star
Australia advertises and promotes the “G-Star” brand in Australia in
a number of ways including:-
- (a) through
“Look Books” which it provides to wholesale customers and operators
of concept stores;
- (b) billboards;
- (c) signage on
public transport including dedicated “G-Star” branded trams and
buses;
- (d) in-store
advertisements; and
- (e) editorials
and advertisements placed in various magazines including Men's Fitness, FHM, GQ,
Rolling Stone, Acclaim and Frankie.
- Further
advertising is conducted through social media including Facebook, Twitter and
YouTube. G-Star Raw has spent a substantial
amount of money advertising and
promoting the “G-Star” brand in Australia.
- As
deposed by Mr Poelmann in his Affidavit sworn on 28 November 2013, G-Star
Australia is able to charge the prices that it does for
the G-Star products for
the following
reasons:-[8]
- (a) the
materials used to manufacture the G-Star products are of a high quality as is
the standard of workmanship used to manufacture
these products; and
- (b) G-Star Raw
employs a large number of designers who are involved in creating and designing
innovative clothing and accessories
as part of the G-Star range. The G-Star
products and the “G-Star” brand have become popular as consumers
purchase the
G-Star products for their innovative designs and
exclusivity.
- This
evidence establishes, as submitted by the Applicants, that the G-Star products,
the G-Star Trade Mark, the Copyright Works and
the “G-Star” brand
per se have a substantial reputation amongst actual and potential
customers of “G-Star” branded products in
Australia.
Damages
- The
Applicants seek damages for trade mark and copyright claims in respect of lost
sales, loss of reputation and additional damage
pursuant to s.115(4) of the
Copyright Act. Section 115 of the Copyright Act relevantly
provides:-
- “Actions
for infringement
- (1) Subject
to this Act, the owner
of a copyright
may bring an action
for an infringement of the copyright.
- (2) Subject
to this Act, the relief that a court may grant in an action
for an infringement of copyright
includes an injunction (subject
to such terms, if any, as the court thinks fit)
and either damages or an account of profits.
- ...
- (4) Where,
in an action
under this section:
- (a) an
infringement of copyright
is established; and
- (b) the
court is satisfied that it is proper to do so, having regard to:
- (i) the
flagrancy of the infringement; and
- (ia) the
need to deter similar infringements of copyright;
and
- (ib) the
conduct of the defendant after the act constituting the infringement or, if
relevant, after the defendant was informed that
the defendant had allegedly
infringed the plaintiff's copyright;
and
- (ii)
whether the infringement involved the conversion of a work
or other subject-matter from hardcopy or analog form into a digital
or other
electronic machine-readable form; and
- (iii) any
benefit shown to have accrued to the defendant by reason of the infringement;
and
- (iv) all
other relevant matters;
- the court
may, in assessing damages for the infringement, award such additional damages as
it considers appropriate in the circumstances.”
- The
Applicants acknowledge that in receiving damages pursuant to the Copyright Act
they are not entitled to also receive damages for breaches of the Trade Marks
Act, the Australian Consumer Law claim and the Respondent’s conduct which
constitutes the tort of passing off. That is, the Court
will not allow the
Applicants to ‘double dip’ in circumstances where damages are
received for copyright infringement.
- As
s.115(2) of the Copyright Act does not allow the Applicants to obtain both
damages and an account of profits, the Applicants have elected to seek an award
of damages,
rather than an account of
profits.[9]
Assessment of compensatory damages – lost sales profits
- The
purpose of an award of damages is to compensate the Applicants for the loss
which they have suffered “as a result of the
Respondent's
breach,”[10] including by
compensating the Applicants for the depreciation to the value of the copyright
as a chose in action arising from the
introduction of “G-Star”
branded goods into the
marketplace.[11]
- In
particular, it is well established that a plaintiff in an intellectual property
infringement case may prove an entitlement to compensatory
damages on the basis
that it lost the sales made by the defendant which would otherwise have been
made by the plaintiff.[12]
- The
Applicants must prove their loss on the balance of probabilities and with as
much precision as the subject matter reasonably
permits.[13] lf a Court finds that
damage has occurred it must do its best to quantify the loss, even if some
degree of speculation and guesswork
is
involved.[14]
- In
the absence in these proceedings of any evidence by the Respondent demonstrating
the total gross sales of the counterfeit products
(or any evidence at all), the
Applicants cannot adduce precise evidence of what has been lost.
Otherwise:-
- (a) the
Imported Products were seized by Customs and therefore no damage was suffered by
the Applicants as these products were not
released into the marketplace;
and
- (b) the
Applicants can only show evidence of the sale of one pair of
“G-Star” branded jeans from the Dandenong Store.
- However,
the Applicants submit that given that a counterfeit “G-Star” product
was purchased from the Dandenong Store in
November 2013, the Respondent must
have had and must have sold counterfeit “G-Star” products on other
occasions. Thus,
there would be more than one infringing garment sold.
- The
Applicants, in seeking compensation for lost sales, accept that the Court may
only award a nominal amount in damages as there
is little evidence of lost
sales. The profit the Applicants would have received on the sale of one pair of
genuine G-Star jeans is
approximately $57. Given the failure of the Respondent
to participate in these proceedings, the Court can only engage in some degree
of
speculation as to the exact amount suffered by the Applicants in lost sales. The
selling of counterfeit G-Star products gives
rise to some measure of loss,
though that is unable to be precisely quantified by the Court. The Respondent
however should not benefit
from its lack of co-operation and lack of
participating in these proceedings. In all the circumstances, I am prepared to
award the
Applicants $500 under this heading.
Assessment of compensatory damages – loss of reputation
- The
Applicants also seek general damages on the basis that, as a result of
counterfeit “G-Star” branded goods being made
available in the
marketplace by the Respondent, there was damage to the reputation and goodwill
generated by the Applicants in the
G-Star Trade Marks, the Copyright Works, the
G-Star brand per se and the Applicants’ “exclusivity”
in the marketplace. This is a serious matter.
- The
Applicants rely on the authority of Kenny J in Review Australia Pty Ltd v New
Cover Group Pty Ltd & Ors [2008] FCA 1589; (2008) 79 IPR 236 at [54] –
[62] and Jessup J in Review Australia Pty Ltd v Innovative Lifestyle
Investments Pty Ltd [2008] FCA 74. In each of those decisions, the Court made
an award of damages on the basis that the infringement of a registered design
resulted
in a diminution in the value of the design as a chose in action because
the infringement resulted in some diminution in the commercial
value of the
design in respect of its future use. Furthermore, the Court found the infringing
conduct was likely to have had some
adverse effect on reputation and exclusivity
of design.
- The
singularity, distinctiveness, quality and commercial value of the
Applicants’ reputation are claimed in the Statement of
Claim filed 13
August 2013 and supporting affidavits relied upon. The Applicants have
established substantial, exclusive and valuable
reputation in Australia in
relation to their trade mark brands and goods.
- It
is not easy to identify the value of the loss of reputation by the Applicants in
monetary terms but the Court is required to do
so. “It is a matter of
judgment as to the loss of value in a party’s
reputation.”[15]
- According
to the evidence as contained in the Affidavit of Mr Poelmann, the activities of
the Respondent in selling counterfeit G-Star
products at the prices which it
sells these products for, causes significant damage to the Applicants’
business and their reputation
for the following
reasons:-[16]
- (a) G-Star
Australia loses sales of the G-Star Products as consumers refuse to pay the
higher prices for the G-Star Products when
similar looking counterfeit G-Star
products are available in the market place at cheaper prices;
- (b) G-Star
Australia loses customers as they no longer purchase the G-Star Products as they
are no longer considered “exclusive”
as cheaper copy products are
available in the market place; and
- (c) G-Star
Australia's retail customers no longer wish to purchase the G-Star Products as
counterfeit G-Star products are being sold
at retail stores within close
proximity to their stores and at cheaper prices.
- Mr
Poelmann further deposes that the activities of the Respondent in selling
counterfeit G-Star products is damaging to the Applicants
and the
“G-Star” brand per se
as:-[17]
- (a) the
Applicants only sell “G-Star” branded garments to select stores and
boutiques within Australia and New Zealand
and they control the way in which the
G-Star Products are displayed in-store. The Applicants cannot exert this control
on the Respondent
or unauthorised sellers and this damages the
“G-Star” brand as the G-Star Products are not displayed and sold in
the
strict way that the Applicants require;
- (b) when the
Copyright Works are copied by another trader who targets their business at a
similar market to the Applicants, the claim
of exclusivity in the G-Star Trade
Marks and the Copyright Works is lost;
- (c) the
Respondent sold the Dandenong Store Jeans at very low prices compared to genuine
G-Star goods; and
- (d) the
presence of counterfeit “G-Star” branded goods in the marketplace
has significantly diminished the reputation
of the Copyright Works. This in turn
has diminished the exclusivity of the G-Star Products in the marketplace and has
tarnished the
“G-Star” brand.
- Finally,
Mr Poelmann deposed that by simply affixing the G-Star Trade Marks and the
Copyright Works to products entirely unconnected
to the Applicants, distributors
of these counterfeit goods are able to charge a premium on what they could
otherwise charge for such
garments, and in that way, they are getting a
“free ride” on the basis of the long and substantial investment by
the
Applicants in promoting their goods sold by reference to the G-Star Trade
Marks, the Copyright Works and the “G-Star”
brand.[18]
- As
for compensation for damage to reputation, the Applicants submit that an award
of $15,000 is justified. I consider it proper to
make an award, in the sum
sought, accepting there would have been some damage to the Applicants’
reputation.
Assessment of additional damages
- The
Applicants seek an award of additional damages under s.115(4) of the Copyright
Act in the sum of $50,000 for the following reasons, as submitted by
them:-
(a) the Respondent’s infringement was flagrant. Flagrancy entails a
calculated disregard for the plaintiff's rights, a cynical
pursuit of
benefit,[19] conduct that is
deliberate, deceitful and/or
serious[20] or the infliction of
loss difficult to compensate and assess in the normal
course.[21] The counterfeit G-Star
products imported and sold by the Respondent featured exact reproductions of the
Copyright Work. Furthermore,
the Respondent was put on notice of the
Applicants’ copyright rights by reason of a letter of demand sent on 17
August 2012
and it still continued to sell counterfeit G-Star stock in complete
disregard of the Applicants’ copyright rights;
(b) there needs to be a general deterrent to prevent similar infringements of
copyright, a deterrent that is known and understood
in the marketplace. The
documents produced by Customs under subpoena reveal that the Respondent was well
aware of the law of trade
marks and despite this awareness it continued to
import clothing products which infringed the trade marks of well-known brands.
The
documents also show that the Respondent imported large commercial quantities
of goods. Furthermore, the Respondent was a Respondent
in a Federal Court
proceeding in which allegations of trade mark infringement were proved against
it and injunctive orders were made
against the Respondent. Despite these Orders,
the documents produced by Customs show that the Respondent continued to import
clothing
products which infringed the trade marks of the Applicant in that case,
New Era, as well as a number of well-known brands. There
is also a general need
to deter other traders from engaging in similar infringements;
(c) despite being put on notice of the Applicants’ intellectual property
rights by letter dated 17 August 2012, the Respondent
continued to sell
“G-Star” branded clothing via its Dandenong Store with a trap
purchase being made in November 2013.
In Review Australia Pty Ltd v
Innovative Lifestyle Investments Pty Ltd [2008] FCA 74 Jessup J awarded
additional damages in a design infringement case where the Respondent continued
to sell the infringing product after
being put on notice of the Applicant's
design rights and his Honour noted at [55] that “The continued making of
sales, even
on this fairly modest scale, is not the conduct of traders which,
having been specifically informed of the Applicant's registered
design, were
conscientious to observe their legal obligations”. Similarly, Justice
Gordon in Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd [2009]
FCA 633 awarded additional damages in a copyright infringement case on a
similar basis;
(d) Kenny J in Review Australia Pty Ltd v New Cover Group Pty Ltd & Ors
[2008] FCA 1589; (2008) 79 IPR 236 at [54] to [62] took the approach that in the absence of
any evidence from the respondents as to the commercial benefit obtained in
selling
the infringing garments, the Court could infer that they made profits
from the infringement. In the present case, the evidence is
that the Respondent
sold at least one “G-Star” branded item of clothing therefore a
benefit has been shown to accrue
to the Respondent as a result of its infringing
conduct; and
(e) Kenny J in Review Australia Pty Ltd v New Cover Group Pty Ltd & Ors
[2008] FCA 1589; (2008) 79 IPR 236 also awarded additional damages against a respondent on
the basis that there were deficiencies in the respondent’s discovery,
response to notice to produce, and evidence of New Cover Group Pty Ltd/ Maco
Collection Pty Ltd which indicated that there was a
very strong possibility that
the extent of the infringement had been underestimated. Her Honour made an award
of additional damages
of $50,000. In this case, the Respondent has taken no
active role in the proceeding. The Applicants also note that the importation
documents for the Imported Products do not disclose the brands of the items
imported.[22] Therefore, the
Applicants submit that it is likely that the Respondent brought in other
importations of “G-Star” branded
product which went undetected by
Customs as the importation documents would not have disclosed that the goods
were “G-Star”
branded.
- The
damages contemplated in s.115(4) of the Copyright Act are of a punitive kind.
Financial gain is unnecessary. Section 115(4) of the Copyright Act may be
engaged where the owner is entitled only to nominal damages under
s.115(2).[23] It is appropriate here
that additional damages be awarded to “mark the Court’s recognition
of the opprobrium attached
to the defendants
conduct.”[24] Taking into
account all of the circumstances of this case and accepting the engagement of
the factors listed above, as submitted
by the Applicants, I consider it proper
to make an appropriate award of additional damages of $25,000.
- There
will be an order for costs in the amount claimed which is a reasonable sum with
reference to this Court’s costs schedule
as set out in the Rules.
I certify that the preceding forty-four (44) paragraphs are a
true copy of the reasons for judgment of Judge
Hartnett
Associate:
Date: 4 April
2014
[1] Affidavit of Ben Regnard
affirmed on 14 October 2013
[2]
Affidavit of Renee Louise Backman affirmed on 17 December
2013
[3] Arthur v Vaupotic
Investments Pty Ltd [2005] FCA 433 at [3] per Heerey J; Australian
Competition and Consumer Commission (ACCC) v Albert [2005] FCA 1311 at [6]
and [7] per Jacobson J; Facton
Ltd and Ors v Dash Industries Pty Ltd and Anor [2010] FMCA 709; Facton
Ltd v Erdogan (No 1) [2012] FCA
924
[4] Competition and Consumer
Act 2010 (Cth), s.138A,
Sch.2
[5] Competition and
Consumer Act 2010 (Cth),
s.80
[6] Copyright Act 1968
(Cth), s.131D
[7] Trade
Marks Act 1995 (Cth),
ss.120,191A
[8] Affidavit of Piet
Poelmann sworn 28 November 2013 at paragraph 29
[9] Applicants’ Outline of
Submissions filed 20 December 2013 at paragraph
48
[10] Aristocrat
Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (in liq)
[2007] FCAFC 40; (2007) 157 FCR 564 per Black·CJ and Jacobson J at [25]; Interfirm
Comparison (Aust) Pty Ltd v Law Society of New South Wales (1975) 6 ALR 445
at [446], per Bowen CJ; Bailey v Namol Pty Ltd [1994] FCA 1401; (1994) 53 FCR 102 at
[111], per Burchett, Gummow and O'Loughlin
JJ
[11] See Sutherland
Publishing Co Ltd v Caxton Publishing Co Ltd [1936] Ch 323; 336 per Lord
Wright MR where his Lordship stated the distinction between conversion damages
and general damages
[12]
Aristocrat [2007] FCAFC 40; (2007) 157 FCR 564 at [37]; Sony Computer Entertainment
Aust Pty Ltd v Stirling [2001] FCA 1852 per Emmett J at
[8]
[13] Placer (Granny Smith)
Pty Ltd v Theiss Contractors Pty Ltd (2003) 196 ALR 257 at 266 [37], per
Hayne J, with whom Gleeson CJ, McHugh and Kirby JJ agreed; Commonwealth v
Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 at [80], [83]-[84], per Mason CJ
and Dawson J; at [138], per Toohey J; at [153], per Gaudron J; at [161], per
McHugh J
[14] Aristocrat
[2007] FCAFC 40; (2007) 157 FCR 564 per Black CJ and Jacobson J at [35]; Enzed Holdings
Ltd v Wynthea Pty Ltd [1984] FCA 373; (1984) 57 ALR 167 at [183], per Sheppard, Morling
& Wilcox JJ
[15] Facton
Ltd v Rifai Fashions Pty Ltd [2012] FCAFC 9 at [29], per Lander and Gordon
JJ
[16] Affidavit of Piet
Poelmann sworn 28 November 2013 at paragraphs 30(b) to
(e)
[17] Applicants’
Outline of Submissions for Default Judgment filed 20 December
2013
[18]Affidavit of Piet
Poelmann sworn 28 November 2013 at paragraph
30(f)
[19] Prior v Lansdowne
Press Pty Ltd [1977] VicRp 6; [1977] VR
65
[20] Microsoft Corporation
& Anor v Atifo Pty Ltd & Ors (1997) 38 IPR at [648]; Microsoft
Corporation & Ors v Goodview Electronics Pty Ltd & Ors (2000) 49 IPR
578 at [60]; Eagle Rock Entertainment Ltd v Caisley [2005] FCA 1238 at
[31], per Tamberlin J
[21]
Williams v Settle [1960] 2 ALL ER 806; Nichols Advanced Vehicle
Systems Inc & Ors v Rees & Ors [1979] RPC 127; Lady Anne Tennant
v Associated Newspapers Group Ltd [1979] FSR 298; Wellington Newspapers
Ltd v Dealers Guide Ltd [1984] 2 NZLR 66; International Credit Control
Ltd v Axelsen [1974] 1 NZLR 695 at
705
[22] see Annexure JAF-13 to
the Affidavit of Jonathan Ariel Feder affirmed 2 December
2013
[23] Aristocrat
Technologies Australia Pty Ltd v OAP Services (Kempsey) Pty Ltd [2007] FCAFC 40; (2007) 157
FCR 564
[24] Facton Ltd v
Rifai Fashions Pty Ltd [2012] FCAFC 9 per Lander and Gordon JJ at [36]
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