Build-A-Bear Workshop Inc v The Bear Kid's Workshop Pty Ltd

REASONS FOR JUDGMENT 1 I have before me an application by the respondents for an order under s 48 of the Federal Court of Australia Act 1976 (Cth) and O 10 r 1 (2)(f) of the Federal Court Rules that the proceedings be transferred to the Western Australian District Registry of the Federal Court. The application is opposed. 2 The proceedings involve claims by the applicant under the Trade Marks Act 1995 (Cth), the Designs Act 1906 (Cth), the Copyright Act 1968 (Cth) and the Trade Practices Act 1974 (Cth). There are also allegations of passing-off. 3 The subject matter of the dispute can be taken from the application: …the supply of children's plush toys and, in particular, toy teddy bears under or by reference to: (a) the name "The Bear Kid's Workshop"; or (b) any name substantially identical with or deceptively similar to the words "Build-A-Bear Workshop"; or (c) any trade mark, corporate name, business name or domain name including the words in paragraphs a) or b) above or threatening to do the same. 4 The applicant is a corporation organised and existing under the laws of the State of Delaware in the United States of America. The applicant was formed in April 2000 by a merger of two businesses. The business of the applicant's predecessors began in early 1997 in St Louis, Missouri. Since then, the applicant and its predecessors have produced and sold a range of stuffed and plush toy animals, in particular teddy bears, and garments and accessories for those toy animals. It is fair to say that the business of the applicant is the operation through retail stores, each of which adopts a distinctive "get up" or "trade dress" in respect of shop front, store design and product design. There is a website for the applicant's business. 5 As yet, the applicant has not commenced business in Australia. However, it claims a reputation in Australia. Also, it apparently intends to commence business here, either on its own account or through franchisees. Evidence of these intentions was given in a confidential exhibit in respect of which I made an order under s 50 of the Federal Court of Australia Act 1976 (Cth). It would not, I think, be disclosing matters the subject of confidence to say that the likelihood is that, at least initially, any development of business in this country by the applicant is more likely to take place first on the east coast of Australia rather than in Perth. 6 The respondent has opened a shop in a shopping centre in Cannington, Western Australia. It is said that this shop, its get up and product contents infringe the rights of the applicant under the statutes and the general law principles to which I have referred. 7 The applicant sought by another notice of motion to obtain an order of the Court for it, through its representatives, to enter the shop in question and take photographs and films for the purposes of evidence. This motion was resolved by agreement. However, it does indicate that the question of the overall get-up of the shop as well as the products will be of relevance in the proceedings. 8 The respondents are a company and two individuals. The two individuals are husband and wife who are the principals of the first respondent. They live in Western Australia. They have Western Australian legal representatives. The shop is in Perth. The acts of infringement of statute or common law have taken place in Perth. 9 The parties have led evidence before me as to the likely witnesses and reputation evidence. I think it is perhaps too early to be certain as to what will occur in this matter by way of the presentation of evidence. However, it does appear plain that the look and get-up of the shop will be relevant. It may be that the reputation evidence will have a dimension beyond that of Western Australia or Perth. However the position in Perth will be relevant. There is some evidence that the respondents intend to open shops in Adelaide, Melbourne, Sydney and Brisbane. The timing of the opening of those shops, however, is unknown. 10 The alleged wrongs appear to have a clear nexus with Western Australia. 11 The applicant does not as yet carry on business in this country. It frankly identified why it wishes to run this case in Sydney. It has retained the services of the solicitors on the record, who have their professional practice in Sydney. In particular, the applicant wishes to avail itself of the services of Mr Williams in whom the applicant, it would appear, reposes trust and confidence as an expert practitioner in this field. The evidence is that Mr Williams has developed a relationship both with the American patent attorneys of the applicant and with the applicant itself, in which those parties repose in him their trust and confidence. 12 The principles by reference to which I should decide the question were set forth by the Full Court in National Mutual Holdings Pty Ltd v Sentry Corporation (1988) 19 FCR 155, especially at 161-62. 13 It was submitted by the respondents that the applicant had commenced the proceedings in New South Wales "capriciously". Weinberg J in Green v Atlantic International Entertainment Australia Pty Ltd [1998] FCA 1278 referred to the dictionary definition of "capriciously" as "by play of wit or fancy, humorous, fantastic, guided by whim rather than judgment, arbitrary". I do not think that the commencement of these proceedings in New South Wales can be so described, either in ordinary English or by the application of legal principle. If I may, without embarrassing Mr Williams, say that he is a practitioner of skill and experience in this area of the law and the confidence reposed in him by the American patent attorneys and by the applicant is understandable. It seems to me that in litigation involving foreign nationals, corporate or otherwise, it is not an unimportant consideration in the interests of the administration of justice that such confidence should exist. Also, it is not fanciful to expect that there will be evidence from experts who are not residents of Western Australia and there may be, by the time of trial, other cities in which the problem has arisen. These matters also point to the bona fides of the choice of Sydney. 14 However, notwithstanding the view that I hold that the choice was a bona fide one, I think in the circumstances of the present dispute being referable to a shop in Perth, the preponderance of convenience is to have the matter conducted in Perth, at least in the light of present circumstances. I think that the most convenient place to deal with the evidence and preparation is at the site of the alleged infringement, involving, as it does, perception and reputation. Whilst the desire to retain Mr Williams is an understandable one, if the matter were to be transferred to the Western Australian District Registry, that would not of itself cause Mr Williams to have to return his instructions. There seems to me to be no reason why Mr Williams could not, from Sydney, supervise, to the extent his client thought appropriate, the litigation being carried on in Perth. It could be that this adds an extra layer of costs to the litigation. Quite how much additional cost is a matter of conjecture at this stage. However, if the matter were to proceed in Sydney there would be added an extra layer of cost to the conduct of the proceedings, for the respondents. It would be quite understandable that the respondents would seek to retain not only New South Wales solicitors and counsel but also, at least, solicitors from Western Australia. 15 It may well be that in the future shops are opened by either or both the applicant and the respondents in other cities in this country. It may be that in the future it becomes apparent from the nature and identity of the witnesses that Perth is not the appropriate place to conduct the hearing. In these circumstances, should they arise, there would be nothing preventing the applicant from seeking to have the matter moved for hearing to another place in Australia. The parties should bear that in mind in how they conduct the preparation for the hearing. 16 On balance, in the light of the matters referred to by the Full Court in National Mutual v Sentry Corporation, supra at 161-2, I think the ends of justice at present will be best facilitated by the transfer of the proceedings to the Western Australian District Registry. 17 Given my views that the choice of New South Wales was not capricious, and with some reasonable foundation, I think that the costs of all parties of the notice of motion for transfer should be costs in the cause. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.