Posts Tagged ‘infringement’

Carving up an uncertified halal butcher

Wednesday, June 18th, 2014

Perram J has awarded $10 nominal damages for trade mark infringement against each of Scadilone, White Heaven and Quality Kebabs, but $91,015 additional damages against Quality Kebabs.

The Halal Certification Authority does just that: it certifies that food has been prepared according to the relevant Islamic (halal) requirements. It has a registered trade mark for the use of which, like other such schemes, you pay appropriate licence fees and comply with the standards set.

TM 1005647

TM 1005647

Quality Kebabs makes and sells at wholesale meat products. It supplied some of its products to 2 kebab houses: Scadilone and White Heaven. The employee/sales rep. also provided them with certificates bearing HCA’s trade mark. Unfortunately, Quality Kebabs was not certified by HCA and it had not paid the licence fees.

HCA had sought compensatory damages based on its lost licence fees: about $5000 for a year’s licence from each of the kebab shops and roughly $60,000 from Quality Kebabs because its conduct occurred over parts of 2 different annual licensing periods. Accepting that a lost royalty or licence fee could be appropriate, Perram J refused this.

Damages under s 126(1) are compensatory. There was no likelihood that any of the infringers would have contemplated entering into a licence at those prices so there were no “lost” licence fees. The kebab houses did want assurance that the meat was halal, but that did not necessarily mean they wanted to promote their shops, as opposed to the meat, as halal certified. Perram J found that, if Quality Kebabs had known HCA’s trade mark was registered and licence fees were payable, it would not have used the trade mark. Instead, it would have copied someone else’s certificate. Therefore, there was no basis to infer that HCA had been deprived of its licence fee.

There was also no order for damages for reputational damages. The signs were displayed in only 2 shops for limited periods. There was no evidence that anyone had seen them or even whether or not the meat was in fact halal.

Perram J considered that the additional damages contemplated by s 126(2) were intended to have a deterrent effect.

Scadilone, White Heaven and their principals escaped liability for additional damages as they were innocent infringers. They had simply put up the certificates they were given and removed them, more or less promptly, when complaint had been made.

Quality Kebabs was a different case, however. Having reviewed the factors set out in s 126(2),[1] Perram J held this was an appropriate case for an award of additional damages:

…. If the damages were to be fixed at the level of the applicant’s wholesale licence fee this would strip Quality Kebabs of the benefit it has received of using the trade mark without having to pay for it but it would not, in my opinion, be a sufficient deterrent. It would mean that an infringer could acquire, in effect, a compulsory licence to use a trade mark subject only to paying for it. It would create a ‘use now’ and ‘pay later’ state of affairs. That situation would eliminate the capacity of the trade mark owner to control who used its trade mark.

To achieve the deterrent effect and having regard to the other factors, Perram J increased the damages by a factor of 50% over the applicable licence fees. Thus, about $60,000 for the licence fees that should have been paid for the two years in which the infringements occurred plus a further $30,000.[2]

There was no award for damages under the ACL. Although the conduct was plainly misleading, Perram J found there was no evidence that HCA’s reputation had suffered any damage.

Halal Certification Authority Pty Limited v Scadilone Pty Limited [2014] FCA 614

Lid dip: James McDougall


  1. S 126(2) is in similar, but not identical, terms to s 115(4) of the Copyright Act 1968.  ?
  2. … the applicant’s fee in those years was an annual one of $27,090 and $33,580 respectively. Although Quality Kebabs only used the trade mark for the 13 month period between August 2012 and September 2013 I do not think that these fees should be subject to a pro rata reduction. Had Quality Kebabs followed the correct path of obtaining the applicant’s permission it would have had to have paid both annual fees in full.  ?

Sanofi v Apotex – infringement

Thursday, December 12th, 2013

The previous post looked at the High Court’s ruling that Sanofi’s patent for a method of medical treatment was patentable subject matter as a manner of manufacture. This post looks at the infringement ruling.

You will recall that the patent for leflunomide itself has expired, but claim 1 of Sanofi’s relevant patent is for:

[a] method of preventing or treating a skin disorder, wherein the skin disorder is psoriasis, which comprises administering to a recipient an effective amount of [leflunomide].

Dermatologists do not prescribe leflunomide for the treatment of psoriasis, but rheumatologists do prescribe leflunomide for the treatment of rheumatoid arthritis (RA) and psoriatic arthritis (PsA). Apparently, almost every person who has PsA will have, or will also develop, psoriasis. When leflunomide is prescribed for the treatment of PsA, “it is usually expected to also prevent or treat the patient’s psoriasis, if that person has a concurrent case of psoriasis.”[1]

Apotex had received marketing approval from the TGA for the treatment of RA and PsA (but not psoriasis specifically). Its product information stated:

“INDICATIONS

Apo-Leflunomide is indicated for the treatment of:

. Active Rheumatoid Arthritis.

. Active Psoriatic Arthritis. Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease.”

The Federal Court – Jagot J at first instance and the Full Court had agreed with Sanofi that Apotex’ supply of leflunomide in these circumstances infringed s 117. While the reasoning was a bit different in each case, it essentially turned on 2 propositions:

First, s 117(2)(b): Apotex had reason to believe its leflunomide would be used to treat psoriasis because its administration to PsA sufferers would usually involve treatment of psoriasis too.

Secondly, s 117(2)(c): in any event, Apotex’ product information was an instruction to use leflunomide in the treatment of psoriasis when it was being prescribed to treat PsA.

Crennan and Kiefel JJ (with whom French CJ and Gaegeler J agreed) rejected both bases and held that Apotex did not infringe.

The patent gave Sanofi a very limited monopoly – use of leflunomide for a particular purpose. This appears to have led to an important point of policy at [302]:

…. It is difficult to understand how the supply of an unpatented product, the use of which by a supplier would not infringe a method patent, can give rise to indirect infringement of a method patent by a recipient of the unpatented product from the supplier. The difficulty reflects the prior art and Sanofi’s limited novelty in the hitherto unknown therapeutic use of the pharmaceutical substance, which is the claimed subject matter of the Patent.

Notwithstanding the interpretation of the product information reached by all four Federal Court judges below, there was no instruction or recommendation of the kind required by s 117(2)(c). Bearing in mind the regulatory regime imposed by the TGA at [303]:

…. In light of the provisions of the TGA, to which reference has been made, the expression “indication” in the product information document is an emphatic instruction to recipients of Apo?Leflunomide from Apotex to restrict use of the product to uses other than use in accordance with the patented method in claim 1. ….

It was simply an instruction to use leflunomide for the treatment of PsA or RA. Nor was s 117(2)(b) engaged. Rather than looking to the effect of the administration of Apotex’ leflunomide, it was necessary to look at the purpose it was being prescribed for: in the relevant cases, the treatment of PsA. At [304] therefore:

it was not shown, nor could it be inferred, that Apotex had reason to believe that the unpatented pharmaceutical substance, which it proposes to supply, would be used by recipients in accordance with the patented method, contrary to the indications in Apotex’s approved product information document.

This suggests that it will be very difficult to establish infringement of a claim to the use of a medicine for a patented purpose where the therapeutic compound itself is no longer patented and the the patented purpose is not one of the indications for which the supplier has obtained TGA approval. One might wonder about the situation where the supplier / respondent was aware of significant off-label use. In this case, however, the High Court seems to have characterised the infringing effect as purely incidental. That was no doubt supported by the different specialists who might prescribe leflunomide for the different purposes.

The High Court did not find it necessary to discuss the trial judge’s finding [2] that leflunomide was not a staple commercial product so that s 117(2)(b).

So, after all that, Apotex did not infringe the patent. We at least have a clear ruling (albeit obiter dicta in that special High Court way) about the patentability of methods of medical treatment so far as the courts (and the current High Court) are concerned. I wonder how much the pecuniary remedies for Apotex’ infringement of copyright in the product informtion is worth?

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50


  1. Crennan and Kiefel JJ at [182].  ?
  2. Sanofi v Apotex (No 2) at [270] – [273], on the footing that the relevant product for the purposes of s 117(2)(b) was the product as supplied by Apotex (and not leflunomide generally), which could be supplied and traded only for the 2 limited purposes indicated in the product information.  ?

The power of a registered trade mark

Monday, August 19th, 2013

If you have tried to buy, sell or rent property in Australia in the last 10 years (at the least!), like some nearly 7 million other Australians you have no doubt come across realestate.com.au, the web-portal run by REA Group. Real One also competes in that space.[1]

Bromberg J has held that Real One’s logos:

Real One 2nd logo

Real One 2nd logo

Real One 1st logo

Real One 1st logo

did not “pass off”[2] REA Group’s logos:

559.1

Nor did they infringe REA Group’s registered trade mark: [3]

TM No 1478263

TM No 1478263

However, the use of Real One’s URL in ads like this:

Real One Ad

Real One Ad

did infringe the registered trade mark! [4]

Bromberg J held that the uses both in the first line and the second line of the advertisment infringed. In contrast to his Honour’s rejection of the claim for misleading or deceptive conduct, Bromberg J explained at [241]:

In my view, the display of the term “realestate1.com.au” in the heading of a sponsored link would have been regarded by many consumers to be the trading and domain name of the business whose link it was. One of the central distinguishing features of REA’s realestate.com.au trade marks is the idea that the term “realestate.com.au” is both a brand name and a domain name at the same time. When Real Estate 1 used “realestate1.com.au” as a trading name, it took up that precise idea. In that context consumers are likely to pay substantive attention to “.com.au” because it serves the function of identifying the brand whose domain name is also being used as a brand. The whole of the domain name is likely to be read or at least scanned. In a circumstance such as that, there was in my view, a real danger of confusion on the part of a consumer familiar with REA’s realestate.com.au trade marks. That principally arises because in a scanning process of the kind which can occur on a search results page, the “1”, which is not very distinct in the context of a domain name in ordinary type face, is likely to be missed by some consumers.

First, his Honour distinguished Perram J’s proposition in the Solahart case that usually one can ignore the inclusion in a sign of elements like “www” and “.com.au” as merely “accoutrements” of the domain name system and so not matters that the public would pay attention to. Unlike the situation before Bromberg J, however, that observation was not made in a context where the .com.au element formed part of the registered trade mark.[5]

Second, I can certainly see that the bold “headline” (the first line) in Real One’s advertisment is plainly being used as a trade mark. But the use in the second line???

Yes, I know that cases have held that domain names / URLs are the Internet’s equivalent of a sign or billboard. That can certainly be true and, in the first line of the advertisement, the URL is plainly being used in that way, but surely with respect in the second line the URL is no more than an address.

Third, one might express some alarm that anyone can stop someone else using the term “real estate” (in connection with real estate services). There are, after all only 387 other registered trade marks in class 36 alone which include the words “real estate”. On the Internet, there is also at the least realestateview.com.au. Bromberg J’s first answer in [241] above is that it was not just the use of “real estate” that gave rise to liability: it was the use of that term and “.com.au” in combination and the comparative insignificance of the “1” in Real One’s URL.

Bromberg J did, however, recognise the problem and said at [247]:

As my conclusions demonstrate, registration of REA’s realestate.com.au marks has effectively given REA a monopoly over two highly descriptive terms when used in combination. Those terms are likely to be the most common terms on a search results page where a search has been conducted for a residential real estate portal. The protection conferred by REA’s trade marks over the use of “realestate” and “.com.au” in combination, provides REA with a monopoly over the term “realestate” in circumstances where its rivals seeking also to use “realestate” or a close variant thereof as a second-level domain, do not forego the advantages of using “.com.au” in their domain names. The natural advantage of a domain name which incorporates “realestate” to the commercial success of property portals will be apparent from observations I have already made. There is also a natural advantage in the use of the suffix “.com.au”. It is troubling that terms that are highly descriptive of a particular area of commerce and which provide significant commercial advantage should not be readily available for use by all who seek to participate in that commerce. However, in the absence of a successful challenge to the registration of REA’s realestate.com.au trade marks, whilst that may be troubling, REA is nevertheless entitled to the protection of the monopoly which has been conferred upon it.

The question has to be asked, however, on what basis could REA group’s logo be revoked or refused registration? Given the device elements (and the large number of other, competing devices), it would surely be held to be capable of distinguishing. The “good” old days (i.e., before the 1995 Act) were at least better in this respect: the Registrar could impose disclaimers to ensure these sorts of monopolies should not arise.

Two short points in conclusion:

His Honour did also find that Real One’s “real commercial” logo infringed REA group’s registration for its “real commercial” logo.

It would seem that Real One is still able to operate from its “.net.au” URL.

REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559


  1. Bromberg J found at [258] that the principal of Real One adopted the name to pressure REA group into buying him out at some point, but also went on reluctantly to find no accessorial liability (akin to authorising).  ?
  2. For simplicity, I will treat that term as covering the actions for misleading or deceptive conduct (now under s 18 of the ACL formerly known as s 52 of the Trade Practice Act 1974) which, of course, was really the focus of that part of the case.  ?
  3. The number doesn’t seem to be identified, but TM Nos 811931 and 1075935 are for the mark in black and white and TM No. 1478263 is for the colour version reproduced in his Honour’s reasons.  ?
  4. Also contrast this result with the Thredbo Resort’s failure to stop ThredboNet using Thredbo in domain names to market rental accommodation at Thredbo village: Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited [2013] FCA 563 – Thredbo Resort having only pending opposed applications.  ?
  5. Decision under the UDRP have reached similar positions.  ?

A designs case!

Monday, June 17th, 2013

Jacobson J has found that Bluescope’s “Smartascreen” metal fencing panel infringed Gram Engineering’s Registered Design No. AU 121344 for a fencing panel as an obvious imitation. Perhaps the most interesting finding, however, is why the Smartascreen was not a fraudulent imitation.

image002

vs

Smartascreen

Smartascreen

Gram’s design was registered in 1994, so this is an “old Act” case (invalidity here and infringement here). [1] At the time, it was the first fence panel to feature a symmetrical design: looking the same no matter which side of the fence it was viewed from and, as a result, it was a roaring success capturing some 40% of the market. One interesting aspect of the case is that Bluescope’s Smartascreen product was introduced in 2002. Although Gram Engineering knew about it from around its introduction, it did not commence infringement proceedings until 2011 – after the registered design had expired in 2010.

Bluescope’s attack on validity failed. [2] First, the prior art on which Bluescope relied were for roofing or siding panels, not fence panels, and so not relevant articles. Moreover, the prior art and the registered design had the same general “z-shape”, but were intended to be used horizontally (“weatherboarding) rather than vertically and none had the same combination of 6 panels with the same proportions and angles as the registered design. Hence, while some features may have been present in some of the prior art, none of the prior art included all the features and the registered design looked distinctively different.

Jacobson J then found that the Smartascreen was an obvious imitation: the dominant feature was the same sawtooth look with the (unique) 6 panel frame in the same proportions and with the same angle.

Fraudulent imitation

On this question, Jacobson J found that Bluescope:

  • knew that the design was registered;
  • knew that Gram had achieved runaway commercial success
  • was trying to design a “Gram lookalike”
  • had come up with a number of different symmetrical designs which were different to Gram’s design
  • and had adopted a standard panel size of 762mm (which matched Gram’s physical embodiement) instead of the more typical 820mm panel size.

In these circumstances and given his Honour’s finding of striking similarity, Gram Engineering argued it was inconceivable Bluescope had not copied Gram’s design and so a finding of fraudulent imitation should follow.

However, Jacobson J considered that fraudulent imitation required a finding that Bluescope’s design had been deliberately copied from the registered design. This may prove to be a considerable narrowing of the requirement in Polyaire that the accused product (at [17]) be based on or derived from the registered design or (at [19]) make use of the registered design.[3] It was, however, decisive. His Honour was not prepared to find that either of the key designers who came forward did deliberately copy. It was here that Gram Engineering’s delay in bringing proceedings came back to haunt it. As his Honour explained at [382]:

It is a conclusion which I have reached with some reservation because the striking similarities to which I referred above were not satisfactorily explained in Bluescope’s evidence. I have no doubt that the drawing of 17 November 2000 was designed to look something like the Gram product. It was, as Gram submitted, designed with an eye to the GramLine sheet. However, it is plain that Mr Field was involved in the process. This appears from the concluding remarks of his memo of 15 November 2000. Ultimately, it is his absence from the witness box which precludes me from reaching the view that the process of designing a Gram lookalike was one which entailed copying the Gram design.

The Mr Field in question was unable to give evidence at this stage in view of his advanced age (being retired) and illness.

If his Honour had been prepared otherwise to find fraudulent imitation, however, the fact that it had obtained advice that its product did not infringe the registered design would not have saved it.

Gram Engineering Pty Ltd v Bluescope Steel Ltd [2013] FCA 508


  1. The test for validity in Designs Act 1906 s 17(1) here and infringement, s 30, here.  ?
  2. An example of the prior art relied on:
    One of the prior art examples

    One of the prior art examples

     ?

  3. Indeed, at [35] the High Court said:

    “…. The kind of fraud that the Act seeks to remedy is closer in kind to, but is still not entirely analogous with, equitable fraud, which, for its establishment, does not require that an actual intention to cheat must always be proved; proof of misconception of the extent of a person’s obligation, to act or to refrain from acting in a particular way, may suffice”.  ?

Property in the proceeds of infringement

Thursday, February 7th, 2013

In a decision which no doubt has some further distance to run, Newey J (sitting in the Chancery Division of the High Court in England) has ruled that the owner of copyright does not have a proprietary interest in the proceeds (read profits) made by an infringer of the copyright.

Harris et al. are alleged to be the person (or persons) behind the Newzbin file sharing sites which, amongst other things, have been found to infringe the movie studios’ copyrights in a range of films (here and here, where Arnold J ordered the ISPs to block access).

In December last year, the Newzbin sites appear to have closed down, claiming they had run out of money.

Having obtained freezing orders (formerly called Mareva injunctions) against the assets of the defendants (such as the house in which Mr Harris lives and the Maclaren car he parks in its driveway), the movie studios sought “proprietary injunctions” over the assets as well. This seems to involve a court determination that the assets in question were the property of the movie studios rather than the defendants. For example, Newey J explained the difference between the (already in place) freezing order and the injunctions now sought by reference to Millett LJ’s description:

“The courts have always recognised a clear distinction between the ordinary Mareva jurisdiction and proprietary claims. The ordinary Mareva injunction restricts a defendant from dealing with his own assets. An injunction of the present kind, at least in part, restrains the defendants from dealing with assets to which the plaintiff asserts title. It is not designed merely to preserve the defendant’s assets so as to be available to meet a judgment; it is designed to protect the plaintiff from having its property expended for the defendant’s purposes”.

The movie studios based their argument on observations in the Spycatcher cases that Peter Wright may have held the rights in Spycatcher on constructive trust for the Crown in view of his breaches of duties of confidence and fidelity.

Newey J seems to have rejected this claim partly on the basis that there were cases binding on him (albeit apparently disapproved by the Privy Council) ruling that there was no such proprietary interest and partly on the basis that s 18 of the Copyright Act 1956 had expressly deemed the copyright owner to be the owner of infringing copies and provided remedies in conversion and detention. That remedy, however, had been repealed by the Copyright Design and Patents Act 1988 as unjust and unfair.

There are some interesting issues for Australians.

First, the conversion/detention remedy on the basis of deemed ownership has not been repealed (but is now discretionary) – see s 116 (but the Full Court may not be too keen on the remedy – see [94] of French and Kiefel JJ (as their Honours then were).

Secondly, in Lenah Game Meats, Gummow and Hayne JJ did say at [102]:

A cinematograph film may have been made, as in Lincoln Hunt, in circumstances involving the invasion of the legal or equitable rights of the plaintiff or a breach of the obligations of the maker to the plaintiff. It may then be inequitable and against good conscience for the maker to assert ownership of the copyright against the plaintiff and to broadcast the film. The maker may be regarded as a constructive trustee of an item of personal (albeit intangible) property, namely the copyright conferred by s 98 of the Copyright Act[96]. In such circumstances, the plaintiff may obtain a declaration as to the subsistence of the trust and a mandatory order requiring an assignment by the defendant of the legal (ie statutory) title to the intellectual property rights in question[97]. Section 196(3) of the Copyright Act provides that an assignment of copyright does not have effect unless it is in writing signed by or on behalf of the assignor.

Gaudron and Callinan JJ also agreed.

Newey J considered, however, that:

i) The point under consideration (viz. whether copyright in a film made unlawfully was subject to a trust) was rather different to that with which I am concerned (viz. whether a copyright owner has a proprietary claim to the fruits of infringement); and

ii) The Australian approach to constructive trusts is by no means the same as that in this jurisdiction. In particular, as the Full Court of the Federal Court of Australia noted in Grimaldi v Chameleon Mining NL (No. 2) [2012] FCAFC 6 (in paragraph 574)

His Lordship’s second point may be thought to be a second factor why an Australian court might take a different approach to his Lordship’s conclusion.

As to the first point, one might well think, if such a constructive trust arose, that the trustee would have to account for the fruits of the use of the trust property and possibly even handover such fruits as were still in his possession.

Finally, the Privy Council’s rejection of the authority binding on Newey J (and the determination of the movie studios) may well indicate that Newey J’s decision is just the first step in the war.

Twentieth Century Fox Film Corporation v Harris [2013] EWHC 159

Lid dip: Fiona Phillips

Apotex v Sanofi

Thursday, July 19th, 2012

The Full Court (Keane CJ, Bennett and Yates JJ) has unanimously dismissed Apotex’ appeal from Jagot J findings that it had infringed Sanofi-Aventis’ patents and copyright. Bennett and Yates JJ delivered a joint opinion, Keane CJ his Honour’s own reasoned opinion.

Patent

Sanofi’s patent had just one claim:

A method of preventing or treating a skin disorder, wherein the skin disorder is psoriasis, which comprises administering to a recipient an effective amount of pharmaceutical composition containing as an active ingredient a compound of formula I or II … [i.e., leflunomide]

Manner of manufacture

Keane CJ recorded at [25] that Apotex did not press orally its argument that methods of medical treatment are not patentable in Australia. Both judgments, however, explicitly refused to re-open the question following Rescare and Bristol-Myers Squibb in light of long standing practice and Parliament’s lmitation of the exclusion from patentability in s 18(2) to humans and the biological processes for their generation.

Keane CJ, Bennett and Yates JJ would also have granted leave to Apotex to argue on appeal that “methods of medical treatment for a “second or later medical use” not limited by the purpose of the treatment are not patentable inventions.”

Whatever the merits of that ground “(a matter on which we express no view)”, however, Bennett and Yates JJ considered at [195] it could not succeed in this case as there was no disclosure on the face of the specification to found the Microcell argument as interpreted in Bristol-Myers Squibb. Keane CJ at [27] considered the ground as argued failed because, properly construed, the claim did not extend to any use of leflunomide that inevitably had some incidental beneficial effect on psoriasis.

Infringement

The Court unanimously rejected Sanofi’s argument that the claim covered any administration of leflunomide which happened to (or also to) result in the treatment of psoriasis. In this context, their Honours were concerned about giving Sanofi a “monopoly” wider than its disclosure or the consideration for the grant of the patent.

This didn’t help Apotex, however.

First, Apotex’ product was approved for, and its product literature stated it was indicated for the treatment of active rheumatoid arthritis and active psoriatic arthritis. The product literature also stated “Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease.”

Use of leflunomide to treat rheumatoid arthritis itself would not infringe. However, those treating psoriatic arthritis knew that the patient would also have psoriasis or, if not treated, would develop psoriasis. Thus, the Full Court agreed with Jagot J that the plain meaning to those skilled in the art of the statement “Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease” was an instruction to use Apo-Leflunomide for the treatment of psoriasis in conjunction with the treatment or prevention of psoiratic arthritis.

Secondly, use for the purpose of treating, or preventing, psoriasis in conjunction with psoriatic arthritis would be an infringing use. Their Honours were not overwhelmed by the supposed terrors of determining the purpose for which leflunomide was prescribed, bearing in mind that it was a prescription drug. Bennett and Yates JJ saw this at [126] is simply a question of characterising the impugned conduct. Keane CJ questioned at [38] to [40] whether the proposition from Merrell Dow that infringement did not depend on the infringer’s state of mind was in fact “absolute” and noted that, in circumstances where a prescription only drug was being prescribed by medical practitioners, the purpose of administration should be reasonably ascertainable.

Accordingly, Apotex infringed on the basis of (at least) s 117(2)(c).

Copyright

May be the subject of a later post.

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (No 2) [2012] FCAFC 102

Trade marks and survey evidence in Australia

Friday, October 28th, 2011

Adidas is suing Pacific Brands, alleging that the latter’s use of 3 stripes on footwear infringes Adidas’ registered trade marks for the “3 Stripes” (the judgment doesn’t identify which trade marks or the Pacific Brands’ product(s) in question).

Adidas gave notice under CM-13 (this is .doc download link, but the terms of the practice note are also set out in the judgment) that it intended to conduct a consumer survey.

It would appear that what Adidas proposed to ask survey respondents was:
After setting out the proposed form and methodology of survey and control to be used the Notice set out the proposed survey questions as follows:
(a) Who do you think makes this shoe?
(b) Why do you say that?
(c) When did you last buy a pair of sports shoes?

Pacific Brands sought an order preventing the survey being undertaken or used. Pacific Brands argued that the survey was a waste of time and money because:

  1. it had conceded Adidas had a reputation in the 3 stripes trade mark in Australia; and
  2. whether or not the use of the stripes on Pacific Brands’ footwear was use as a trade mark or, if it was, was deceptively similar to Adidas’ trade marks,
were purely questions of law for the judge alone.
Robertson J refused to block the survey for those reasons at this early stage. His Honour considered that Gummow J’s observations in Interlego did not support Pacific Brands’ argument.
In support of this proposition, the respondent referred to Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 387-389. I do not so read the passages in the judgment of Gummow J, with whom Black CJ and Lockhart J agreed. It is correct to say that deceptive similarity is a question for the tribunal of fact and is not a matter for any witness to decide but, as the passage cited by Gummow J from Lord Diplock’s judgment in General Electric Co (USA) v General Electric Co Ltd [1972] 1 WLR 729 at 738 makes plain, to say that a question is for the tribunal of fact or to describe it as a “jury question” does not mean that evidence going to that question is impermissible.
It might also be said that s 80 of the Evidence Act creates a problem for it too. See Cadbury Scwheppes v Darrell Lea at [49] – [57].
Adidas is not out of the woods yet. It would appear that Pacific Brands have identified defects in the proposed survey itself. Robertson J indicated what Pacific Brands should have done is identify those defects as part of the CM-13 process.
What the defects may be is not identified (and his Honour was not necessarily agreeing that they were defects). At least questions (a) and (b) set out above seem to be the sort of questions which courts have typically found acceptable, at least since the Jif Lemon case, as they do not involve the survey respondent engaging in undue speculation. I guess we shall have to wait and see if anything further emerges.
Adidas AG v Pacific Brands Footwear Pty Ltd [2011] FCA 1205
x

Scope of disclosure in an innovation patent

Monday, July 4th, 2011

Patentology has a nice summary of the innovation patentee’s successful appeal in Seafood Innovations Pty Ltd v Richard Bass Pty Ltd [2011] FCAFC 83.

One point: it seems like the disclosure in the body of the specification supporting the broadest claim was at a level of generality similar to that upheld by the High Court in the first round of Lockwood. Wonder how that will hold up for future application under the (proposed) Raising the Bar legislation?

Secondly, the (now) infringer’s best line of defence (apart from invalidity) seems to have turned on trying to argue (now unsuccessfully) that incorporating additional integers in the accused gutting machine to those specified in the claim. Bennett J gave it short shrift.

A lamp lens too far

Wednesday, May 18th, 2011

The fifth decision under the “new” Designs Act 2004 illustrates the operation of that old principle: in a crowded field, small differences may be enough to confer validity, but equally small differences in the accused products will be sufficient to avoid liability.
You will recall that LED Technologies successfully sued Elecspess (and others) for infringing LED’s registered designs for a dual lens lamp, ARD 302359, and a triple lens lamp, 302360 (links to those decisions via here). Well, LED fell out with its Chinese manufacturer, Valens, and found itself a new supplier. Valens, however, didn’t take things lying down and started supplying another of LED’s competitors, Baxter.
As in the earlier case, Baxter challenged the validity of the earlier design; this time arguing that the Statement of Newness and Distinctiveness was unclear and also relying on some different prior art.
The first objection failed.  The perspective view for the two-lens design looks like this:

 

ARD 302359

The Statement of Newness etc. etc. read:

Separate clip in lenses. Base to take a variety of 2, 3 or 4 combination of lenses for stop, tail, indicator, reverse LED lenses, no visible screws.

At [85], Finkelstein J accepted that the Statement of Newness etc. etc. could have been “better expressed”, but it sufficiently clear and succinct:
…. In my view the statement indicates clearly to the relevantly informed addressee (and probably to anyone familiar with the English language) that the base could be manufactured to take a number of lenses. Reference to “separate clip in lenses”, when read with the phrase “no visible screws”, indicates that the lenses clips in and are not held in place by screws. There is nothing relevantly uncertain contained in the statement. 

There were important visual differences between LED’s designs and the closest prior art. For example, at [104]:
the base of the Rubbolite lamps appeared to provide individual frames for each lens, which is not a feature of the registered designs. … the corners of the Rubbolite lens appeared sharper or squarer than the registered designs but said the difference was minor. … there was a noticeable ledge or lip around the lens (which he referred to as the “lens housing”) which was not shown on the registered designs. The ledge or lip around the lens on the Rubbolite lamps tapered inwards which made it substantially different in appearance when looked at from the side. 

Hence, the registered designs were valid.
Unfortunately (for LED), before Valens started supplying Baxter, it had made some changes to the product. As a result, the products supplied to Baxter were not substantially similar in overall impression to the registered designs. Finkelstein J accepted [105] that there were similarities between the products imported by Baxter and the registered design.  Many of them, however, “were common in the prior art”. Moreover:
[106] There are, to my mind, several important features that lead me to the conclusion that the Baxters lamps are not substantially similar in overall impression to the registered designs. The key features are the prominent cut out pattern on the underside of the designs, which is to be contrasted with the flat closed backs of the Baxters lamps, and the square lenses of the designs having a wide landing between them while the Baxters lights have no landing. Of less significance are the long sides of the frames of the registered designs which have raised edges resulting in a counter-sunk appearance, which is not present on the Baxters lamps. As well, the short sides of the frames of the registered designs are raised at their outer portions and dip down in the central portion, which is not a feature of Baxters’ design. 

[107] Moreover, in my view, it is these features that distinguish the registered designs from the prior art such as to admit of the conclusion that the registered designs are new and distinctive. 

Inducing breach of contract

An interesting twist to this case, was that LED also tried to “get” Baxter for inducing the (ex-) Chinese supplier, Valens, to breach its contract with LED.

Essentially, LED argued it had agreed with Valens that Valens would not supply anyone else in Australia or New Zealand with products made using the moulds for the products supplied to LED. The evidence on this point was less than ideal, with the judge being rather critical of the witnesses. There was also a dispute between LED and Valens over who owned what. Ultimately, his Honour accepted that there was a deal that LED would be supplied exclusively for Australia and New Zealand so the supply of products to Baxter was in breach of the agreement. However, Baxter itself did not procure the breach: Baxter did not know Valens was re-using the moulds: to the contrary, it was paying Valens for new moulds.

It is rather hard to reconcile the story in Elecspess on how the designs came into existence and came to be manufactured with the evidence in this case. Of course, as the parties in the two cases are different, each must be decided on its own evidence. I guess, in terms of ownership of the registered designs, there is commonality in that LED’s principal, Mr Ottobre, was the author of the original conception. Matters get rather murky after that.  At [30], LED apparently started selling the lamps made by Valens in “early 2004”, but the priority date of the designs is 22 June 2004.

LED Technologies Pty Ltd v Roadvision Pty Ltd [2011] FCA 146

DGTEK v Digiteck II

Monday, February 21st, 2011

For DGTEK v Digiteck I, see here.

Non-use

Lander J considered that the goods covered by Hills’ registration should be limited as a result of non-use for the statutory period of 3 continuous years under s 92.

One interesting point on this part of the case is that Bitek had sought removal of all goods in its original application for removal. It accepted that evidence filed by Hills showed use in relation to some goods. Hills argued therefore the non-use application must fail since the application was directed to all goods.

Lander J rejected that argument:

[279] Because Bitek was seeking to remove “all of the goods” for non-use, Hills submitted that it was required to rebut the allegation of non-use of all of those goods. Hills argued that the evidence demonstrated use of the DGTEC trade mark in respect of several products including televisions, DVD players, CD players, decoders and cameras. On this basis, it argued that the application should be dismissed.
[280] In the alternative, Hills argued that Bitek could not alter its position or limit its application as an application for removal under s 92(2) is required to be in an approved form: reg 9.1 of the Regulations. The only application for removal in approved form is the initial application in which Bitek seeks to remove “all of the goods” in respect of which the trade mark is registered.
[281] Hills also said that Bitek should not be allowed to limit its application because to do so would lead to a denial of procedural fairness. …

Following a review of the cases, Lander J rejected these arguments:

[295] Hills’ argument that if the Court considered Bitek’s argument that the class of goods should be narrowed would result in a denial of procedural fairness should be rejected. Bitek’s concession means that it cannot have the relief it sought in the application but in seeking to argue that it is entitled to have the restricted relief it is thereby narrowing the scope of the inquiry. In those circumstances it could not be a denial of procedural fairness to allow the matter to proceed by reference to a narrower class of goods.

[296] I also reject Hills’ submission that the application must fail because there is evidence of use of some of its goods. I accept Bitek’s argument that the Court may exercise its discretion under s 101(2) to narrow the scope of the registration where the applicant establishes that a ground exists in relation to only some of the goods to which the application relates.

The power to excise some, but not all goods, was consistent with the policy of Part 9: to ensure that Register (and freedom to trade) was not cluttered with unused marks: [304] and consistent with the terms of s 101(2).

Lander J then refused to exercise a discretion against non-removal, apparently on the basis that any reputation that had been generated in respect of the goods on which there had been use did not spill over on to the goods for which there had not been use:

Bitek submitted that s 101(3) does not save Hills’ registration because there is no evidence of use of similar or closely related goods. The only evidence of use relates to a limited group of products which Bitek mainly excluded from its application for removal.

[316] In my opinion, Hills’ argument should be rejected. The fact that it has used its mark in respect of goods which are similar to those goods marketed by Bitek is not in my opinion to the point.

[317] The circumstance which is addressed in s 101(4) is whether Hills has used the mark in respect of similar goods to those to which the application relates. In Hills’ case it has not used the goods except in relation to set-top boxes, remote controls, digital video recorders with hard drive, televisions, CD and MP3 players, DVD players, micro sound systems, iPod docking speakers and web-based cameras. I do not think there is any evidence to suggest any use of any similar goods to those proved used by Hills which ought to be retained in the statement of goods.

Perhaps rather surprisingly given the finding of non-use in respect of some products, Lander J considered Hills’ specification of goods should be amended to read:

Digital and electronic products including set top boxes, remote controls, digital video recorders with hard drive, televisions, CD and MP3 players, DVD players, micro sound systems, iPod docking speakers and web-based cameras. (my emphasis)

Infringement

Lander J accepted he was bound be the decision in Gallo that removal of a mark for non-use operated only from the date of removal of the mark from the Register.

Bitech admitted it had used DIGITECH since 2003 in respect ofantennas, cables (including speaker, coaxial, data and security), plasma TV brackets, leads, AV switch selectors, connectors, wall plates of various types, splitters, TV mounting hardware, video senders, video intercoms, industry tools, remote controls, multi-switches, set-top boxes, cable ties and cable clips.

Ultimately, his Honour found that Bitek infringed by reason of its use on set-top boxes and remote controls, but not the other products.

Consistently with his Honour’s earlier findings, DIGITECH was of course deceptively similar to DGTECH. Apart from set-top boxes and remote controls, the goods for which Bitek had used its trade mark were either covered by its own (now) registration (s 122(1)(fa)) – and all use had been after the application date – or were not shown to be within the scope of Hills’ registration or goods of the same description. S 120(3) also could not be invoked as Hills’ trade mark was not well-known.

Hills Industries Limited v Bitek Pty Ltd [2011] FCA 94