Budget Eyewear Australia Pty Ltd v Specsavers Pty Ltd

REASONS FOR JUDGMENT 1 The applicant (Budget Eyewear) owns and operates the chain of Budget Eyewear optical retail stores in Australia. The respondent (Specsavers) operates the chain of Specsavers optical retail stores in Australia. Budget Eyewear and Specsavers are competitors engaged in the business of selling optical frames and lenses. Budget Eyewear operates approximately 85 stores across all Australian States and Territories excluding the Northern Territory. It has an additional 12 stores that operate under a franchise business model. Luxottica Retail Australia Pty Limited is the company that owns and operates OPSM Stores in Australia. Both Budget Eyewear and Luxottica Retail Australia Pty Ltd are ultimately owned by Luxottica S.P.A. Specsavers has 219 stores throughout Australia, of which 208 operate on a franchise model. 2 Budget Eyewear alleges that Specsavers has infringed its copyright in each of four works in which it claims copyright, and seeks interlocutory relief for infringement of that copyright. Those works are two versions of a print advertisement, a radio script and a set of terms and conditions under which the offer in the advertisements were made (together, the Works). 3 The parties agree that the principles to be applied in this application for an interlocutory injunction were set out in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57. The first question is whether Budget Eyewear has made out a prima facie case in the sense that if the evidence remains as it is, there is a probability that at the trial of the action, it will be entitled to relief. It is sufficient if Budget Eyewear shows a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending trial. If Budget Eyewear's entitlement to final relief is uncertain, the Court should consider what is best calculated to achieve justice between the parties in the circumstances of the case, bearing in mind the consequences of the granting or withholding of interlocutory relief. The requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory orders sought (O'Neill per Gummow and Hayne JJ at [71]). 4 Specsavers does not deny that it copied the text of Budget Eyewear's campaign for its own advertisement. In making that admission it accepts that it copied the idea of the campaign. The copying did not extend to exact word reproduction. The advertisements of Specsavers and of Budget Eyewear as annexed to the Application are Annexures A and B respectively to these reasons. The radio script is as follows: 1. Break SFX: Music from previous Ad kicks in after the first sentence. FVO: If your Specsavers glasses break - and we're not saying they will - simply bring them into Budget Eyewear. We'll replace them with a pair from our own range - free of charge - until May 16. No kidding. Budget Eyewear. See it like it is. Legals: Terms and conditions apply. See budgeteyewear.com.au for your nearest participating store. 5 The set of terms and conditions is as follows: Terms and Conditions 1. Prescription glasses or sunglasses purchased at a Specsavers retail outlet in Australia that are found to be faulty will be replaced with a pair of glasses or sunglasses from the Budget Eyewear range up to the value of the Specsavers pair. 2. Replacement pair will include equivalent lens type (i.e. single vision, bi-focal, multi-focal) and will be made to the same prescription as the Specsavers pair. 3. Replacement is subject to the surrender of the Specsavers pair and proof of Specsavers purchase (i.e. must have a Specsavers receipt). 4. Offer cannot be exchanged for cash. 5. Participating stores only, offer is not available in the following Budget Eyewear stores: Ballina, Beenleigh, Browns Plains, Caloundra, Camberwell, Capalaba, Cleveland, Lismore, Margate, Morayfield and Sydney City. 6. Offer expires 16/05/2010. 6 Budget Eyewear contends that each constitutes an original work in which copyright subsists. It points in particular to the following phrases: (a) "If your Specsavers glasses break - and we're not saying they will - simply bring them into Budget Eyewear. We'll replace them with pair from our own range - free of charge"; (b) "We're not saying they will, but if your Specsavers glasses break, we'll replace them for free"; and (c) "If your glasses aren't all they're cracked up to be, don't worry, we'll come to the rescue. For the next two weeks… you can take any Specsavers glasses to your nearest participating Budget Eyewear store and we'll replace them with a pair from our range - free of charge". 7 The Specsavers print advertisement contained the following phrases, which are underlined here to show the identity of certain words and phrases: (a) "If your OPSM glasses happen to break, and we're not saying they're going to, we'll exchange them with a pair from Specsavers with a 2 year guarantee, for free"; and (b) "If your prescription glasses aren't what you hoped for, don't stress - we're here to help. From Thursday 13th May to Thursday 27th May, take any broken OPSM glasses to your nearest Specsavers store and we'll give you a pair from our range - for free". 8 There has, of course, been a substitution of "OPSM" for "Specsavers". The changes made to Budget Eyewear's terms and conditions are as follows: 1. Prescription glasses or(excludes sunglasses) purchased at an Specsavers OPSM retail outlet in Australia that are found to be faulty broken will be replaced with a pair of prescription glasses or sunglasses from the Budget Eyewear Specsavers range with frames of your choiceup to the value of the Specsavers pair a maximum price of $399,. 2. Replacement pair will include equivalent lens type (i.e. single vision, bi-focal, multi-focal) and coatings will be made to the same prescription as the Specsavers OPSM pair. 3. Replacement is subject to the surrender of the Specsavers OPSM pair and proof of Specsavers OPSM purchase (i.e. must have an Specsavers OPSM receipt). 4. Offer cannot be exchanged for cash. 5. Participating stores only, offer is not available in the following Budget Eyewear stores: Ballina, Beenleigh, Browns Plains, Caloundra, Camberwell, Capalaba, Cleveland, Lismore, Margate, Morayfield and Sydney City. 6. Offer expires ends 1627/05/2010. 9 Budget Eyewear contends that these substitutions represent minor departures from the precise words used in the Works which are insufficient to avoid a finding of copyright infringement, particularly in the present case where it is clear and it is accepted that the text of Budget Eyewear's advertisements has been used as the source of the Specsavers print advertisement. Budget Eyewear submits that, at the least, Specsavers has taken a substantial part of each of the Works. 10 Budget Eyewear launched its advertising campaign on 1 May 2010. The advertisements stated that the offer was open till 16 May 2010. On 7 May Specsavers directed its advertising agency to utilise Budget Eyewear's campaign. On 13 May Specsavers placed its advertisements which stated that its offer was open from 13 May to 27 May 2010. Budget Eyewear immediately commenced proceedings on 14 May 2010. 11 Specsavers raises a number of matters in opposing the grant of interlocutory relief: