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In two ex parte applications, Greenwood J granted interlocutory injunctions restraining Customs from releasing imported goods which allegedly infringe a trade mark.

The interesting point is that the proceedings for infringement were not brought within the “action period” specified in by s 137 of the Trade Marks Act. Greenwood J reasoned:

Section 136 is headed “Release of Goods to Owner – No Action for Infringement and s 137 is headed “Action for Infringement of Trade Mark”. Some discussion has arisen in earlier authorities, including Jemella v Mackinnon & Another [2008] FCA 1022; 77 IPR 243, in which Logan J had to consider whether non-compliance with these provisions as to commencement and notification within the extension period, might have the effect of depriving the applicant of its standing to maintain infringement proceedings. I am satisfied that ss 136 and 137, taken together, do not deprive the applicant of its standing to maintain proceedings for infringement of the trade mark. Section 137 is not a primary empowering provision conferring rights of action in the applicant. It is permissive in the context in which it appears. Those rights are conferred by s 20 and the provisions of Part 12 of the Trade Marks Act. Section 137 recognises that a trade mark owner may elect to bring proceedings and ss 136 and 137 address what is to occur in the circumstances of those sections in respect of seized goods if the relevant steps are not taken. However, the provisions should be read subject to an order that might be made under s 137(5) to, in effect, preserve the status quo in circumstances where the Court is satisfied that there is a prima facie case of infringement. Nevertheless, a question arises as to whether it is appropriate to make an order directed to the Customs CEO preventing the goods from being released, in all the circumstances, in the exercise of discretion, when s 136 imposes a statutory obligation upon the Customs CEO to release the goods in the circumstances there identified and s 137 imposes time constraints. That directs attention to the merits.

That is, the foundation of the right to be protected by the interlocutory injunction was the right to sue for infringement of the registered trade mark – a right conferred by ss 20 and 120; s 137 merely facilitated that primary right.

Jemella Australia Pty Ltd v Bouobeid [2009] FCA 1567

Jemella Australia Pty Ltd v Daizli [2009] FCA 1566

In the Daizli action there is a further complication that the respondents seem to be out of the jurisdiction for some time. His Honour also refers to products being offered for sale on eBay. But, other than those products being alleged to be infringing, I’m not sure what particular significance that has.

Lindgren J has ordered that the owners of the WILD TURKEY trade mark (which those of you who drink bourbon may be familiar with) provide security for costs before they can pursue their Federal Court application to have WILD GEESE removed from the Register of Trade Marks.

Lindgren J accepted that the owners, members of the international Pernod Ricard or Davide Campari groups, would have sufficient funds to satisfy an order of costs if they were unsuccessful. However, the purpose of s 56 of the Federal Court of Australia Act was to ensure that there was a fund available within Australia to satisfy the costs order.

His Honour accepted that there were procedures available to enforce money judgments against the owners in their home base(s) eg New York, but those procedures placed an additional burden on a party seeking satisfaction of a costs order over and above the difficulties a party litigating against an Australian based entity would incur.

Lindgren J then rejected the owners’ argument that their registered trade marks in Australia were sufficiently liquid assets within the jurisdiction. They were indeed assets, but they were not “sufficiently liquid”.

44 With respect, the applicants’ submissions fail to grapple with the critical question whether the bare trade marks would be readily convertible into cash by sale to satisfy an adverse order for costs.

45 The evidence to which the applicants refer is not evidence of a sale of the trade marks as items of property distinct from a sale of the underlying business.

46 Considerable difficulty might be experienced in realising the trade marks if Lodestar ever had to take that course. The underlying business would remain that of Rare Breed. A prospective buyer of the trade marks would know that Rare Breed would remain a competitor in the Australian market, albeit under a mark or name dissimilar to the trade marks.

47 Moreover, the only prospective buyers would be sizeable corporations that were in the same line of business in Australia or wished to embark upon such a line of business in Australia. If they already traded under a trade mark or business name, they might not be prepared to abandon it in order to buy and use Rare Breed’s trade marks. Would they be interested to acquire those trade marks in addition?

48 It may be that a receiver would eventually be able to sell the trade marks but the course of doing so would or might well be fraught with considerable difficulty and delay.

Similarly, his Honour rejected the Australian distribution rights for Wild Turkey.

Austin, Nichols & Co Inc v Lodestar Anstalt [2009] FCA 1228

Lid dip POF

The Full Federal Court (Finn, Sundberg and Edmonds JJ) has clarified how FCR O62 r 36A operates in IP infringement cases.

FCR O62 r36A provides that the costs of a successful applicant which obtains an order for damages less than $100,000 will be reduced by one third, unless the Court otherwise orders.

Nokia had sued Liu for trade mark infringement arising from a customs seizure. The proceedings settled by consent, with injunctions and delivery up. Nokia pursued damages, but obtained only nominal damages as it was unable to obtain discovery of importation in significant quantities. The trial judge refused to allow Nokia any costs of the damages inquiry.

The Full Federal Court has allowed an appeal, awarding Nokia its (taxed) costs up to the consent judgment and completion of discovery about damages; thereafter costs were at the reduced rate.

The Full Court considered that costs of the trial up to and including the consent orders should be at the usual taxed rate, without the 1/3 reduction because it was common in IP cases for trials to be split – a trial on liability and (if successful) an injunction and a subsequent trial about damages (or an account) and  applicants were required to particularise only a single instance of infringement. The Full Court considered the remedy of injunction “indispensable”. It was also appropriate for the proceedings to be brought in one of the “prescribed courts”, customarily the Federal Court and it was not apparent that it would have been sensible for the matter to be referred down to the Federal Magistrates Court (unlike in copyright proceedings where the Federal Magistrates Court has direct jurisdiction).

Nokia was also entitled to costs of the damages inquiry at least until completion of discovery as it was legitimate and, until it had discovery, it could not have known of the futility. Once discovery was completed, it knew the risks it was running and, given the amount recovered, it was inappropriate to exercise the discretion not to limit the costs of that part of the proceeding by 1/3.

Nokia Corporation v Liu [2009] FCAFC 138

This week’s Victorian Reports publish a 2007 decision in which the Court of Appeal (Dodds-Streeton JA, Ashley and Cavanough JJA agreeing) exhaustively reviewed the relatively limited circumstances in which equitable damages will be awarded in place of an injunction.

Now, the Court of Appeal was dealing with a question of trespass to land but, having regard to the House of Lords’ remarks in Fisher v Brooker, may be worth bearing in mind in intellectual property cases as, generally, an IP owner seeks an injunction when their rights are being infringed.

[135] …. [The relevant authorities] uniformly uphold the established view that an injunction is the prima facie remedy for trespass and that the alternative remedy of damages will be ordered exceptionally, as indicated by the working rule in Shelfer or by such other relevant considerations as may apply in a particular case. The authorities do not dictate or authorise the balancing of potential detriment to the parties on the basis of equivalent entitlement, or indicate that trespass may be negatived by undertakings to minimise its potential effect on future use. The tests embodied in the working rule of Shelfer are cumulative, and assume a significant inequality of entitlement between the parties (as the injury to the plaintiff from the trespass must ordinarily be small and the harm occasioned by an injunction to the defendant must be so disproportionate as to constitute oppression). Oppression in that context imports consideration of, inter alia, specific detriment, including disproportionate harm to the defendant relative to injury to the plaintiff, the deliberate or unintended quality of the trespass and all other relevant circumstances.

[136] The authorities’ consistent recognition that damages in this context may properly be assessed by reference to the advantage or gain to the defendant where the injury to the plaintiff is small facilitates an award of damages where that is otherwise appropriate, but does not disturb the traditional primacy of injunctive relief. (my emphasis)

Her Honour had earlier quoted the good working rule in Shelfer which (in part) was:

In my opinion, it may be stated as a good working rule that —

(1) If the injury to the plaintiff’s legal rights is small,

(2) And is one which is capable of being estimated in money,

(3) And is one which can be adequately compensated by a small money payment,

(4) And the case is one in which it would be oppressive to the defendant to grant an injunction:

then damages in substitution for an injunction may be given.

Doods-Streeton JA did immediately point out how limited this all was:

[46] While the factors potentially relevant to the exercise of the discretion cannot be exhaustively stated, Shelfer, in my opinion, correctly accorded primary importance to identifying a small injury to the plaintiff, and disproportionate hardship constituting oppression, to the defendant.

[47] In determining whether a substitution of damages for in specie relief is just, the interests of the parties are not of broadly equivalent weight. It will not suffice that the hardship entailed to the defendant by an injunction marginally outweighs the relief that the plaintiff will obtain thereby. Rather, the courts have typically required a significantly disproportionate damage to the defendant, reflected in the criterion of oppression in the Shelfer working rule.

This might be another area where US law is different, following eBay v MercExchange.

Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd [2007] VSCA 311

The (Cth) Attorney-General has announced (pdf) that the Federal Magistrates Court will be merged into the Family Law and Federal Courts.

So far as IP generally goes, according to the media release:

The Federal Court will be the single court dealing with all general federal law matters:

The restructured Federal Court will have two tiers;

Appeals and other complex work will generally be heard in the first tier, with shorter, less complex matters redirected to the second tier;

Existing judges of the Federal Court will operate in the first tier;

Federal Magistrates will operate in the second tier;

Upper and lower level Fair Work Divisions, which will hear matters under the Government’s new workplace relations system, will be maintained and provide a one stop shop for employers and employees;

Federal Magistrates appointed to the Federal Court will have expertise in general federal law matters and will continue to be named ‘magistrates’.

Apparently, it is envisaged that the new arrangements will save the Government $7.8million over 4 years. Some of that will be reinvested to improve individuals’ access to the courts.

Access the Report on Future Governance of Federal Family Courts in Australia Report – November 2008 underlying the announcement here (pdf). Consultation paper on the Report here (pdf). Links to the submissions etc. here.

Arnott’s complained (e.g. here and here) that Krispy Kreme’s new dooughnut, the Dough Vo, infringed its trade mark for the Iced Vo Vo. 

You probably had those marshmallow and jam concoctions inflicted on you as a kid. But the trade mark, No 864, which is just for VO VO has been registered since 1906 for biscuits.

Krispy Kreme was reported in the press as saying it wasn’t going to back down – on legal advice, no less -

Arnott’s gave the Australian arm of the doughnut chain until 5pm (AEST) on Friday (April 24) to stop using the name and to undertake not to use similar names in the future.

However, Krispy Kreme Australia CEO John McGuigan said after taking legal advice, the company had decided to continue selling the Iced Dough-Vo.

Next thing we know, however, the headlines read “Dough-Vo bows to Vo-Vo” and “Krispy Kreme backs down on Vo-Vo boo-boo“.

One interesting question for trade mark students: to what extent can you look at what the Dough-Vo looks like when considering the trade mark infringement question? In this case, you probably get rather more latitude because the infringement would arise under s 120(2).

Another thing to worry about. How often do you see (or write in your letters):

we have taken legal advice and our advice is that it is not the case (that trademark was breached)

Has Mr Krispy Kreme just waived privilege in his legal advice?  Have a look e.g. at Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237 esp. at [4], [10] and [32].

Lid dip: James McDougall for word of Krispy Kreme’s retreat.

Well, strictly speaking, the 2nd Circuit in the USA has held that Google’s sale of keywords may be use in commerce.

Rescuecom had sued Google for trademark infringement by selling advertisements (sponsored links) triggered by Rescuecom’s trademark. The District Court had dismissed the claim on the grounds that Google’s conduct was not use in commerce. So now it goes back to the District Court.

Of course, Google’s conduct, if were done in Australia or transacted with a business located in Australia, would be in trade or commerce for the purposes of the Trade Practices Act. In context, however, the nearest analogue under our law is whether or not the conduct might be “use as a trade mark” (in the sense of using the sign in the course of trade) for the purposes of s 120 of the Trade Marks Act.

Professor Goldman considers the ramifications under US law (and the distinguishing of WhenU) here.

The USTR has released a 6 page (pdf) outline of issues being dealt with under the proposed ACTA.

Link via Intellectual Property Watch.

The IP Dragon has links to a 48 page document with rather more information.

More tea leaf sifting here.

Apparently, one of the G20’s solutions to “the GFC”.

IP Watch; IPKat and Duncan Bucknell.

The G20’s website here and, possibly more directly, the communique may turn up at the London Summit 2009 (the site is not responding at the moment). Maybe Connex is running it?

If you are trying to work out who is hosting a website and where it is being hosted, you might be interested in this discussion of the Netcraft toolbar.

Note:

1. this is only for those using Firefox or Internet Explorer.
2. Use at your own risk!