Chanel Limited v Donoghue

REASONS FOR JUDGMENT 1 The applicant, Chanel Limited ("Chanel"), is the owner of the following Australian Registered Trade Marks: 1. Australian Registered Trade Mark No. 281276 for the word CHANEL in class 16; 2. Australian Registered Trade Mark No. 525736 for the word CHANEL in class 9; 3. Australian Registered Trade Mark No. 525737 for in class 9; 4. Australian Registered Trade Mark No. 852545 for the word CHANEL in classes 9, 21 and 28; 5. Australian Registered Trade Mark No. 852546 for: in classes 9, 21 and 28; and 6. Australian Registered Trade Mark No. 1011606 for: in classes 3, 9 and 14 ("the Chanel Trade Marks"). 2 On 12 September 2008, Chanel filed an application and statement of claim in the Federal Court identifying the Chanel Trade Marks and alleging that each of the marks was registered, subsisting and of full force and effect. The statement of claim went on to allege that the respondent, Mr Donoghue, without the licence or authority of Chanel had: imported, advertised, offered for sale, distributed, supplied and / or sold goods bearing one or more of the Chanel Trade Marks or one or more trade marks which are substantially identical with or deceptively similar to one or more of the Chanel Trade Marks. 3 The claim went on to identify the allegedly infringing goods as: a variety of eyewear, including but not limited to sunglasses, bearing one or more of the Chanel Trade Marks or one or more trade marks which are substantially identical with or deceptively similar to one or more of the Chanel Trade Marks, which products were not made by or under the licence or authority of [Chanel]. 4 On or about 4 August 2008, the Australian Customs Service ("Customs") seized 92 pairs of sunglasses all bearing one or more of the Chanel Trade Marks. The consignment of goods was addressed to the respondent at 87 Little Oxford Street, Collingwood, Victoria ("the respondent's alleged address"). The respondent was, therefore, identified by Customs as the designated owner of the goods within the meaning of the Trade Marks Act 1995 (Cth) ("the Act"): see ss 133A and 134(b). 5 On 3 October 2008, in this Court, Chanel applied for and was granted two orders: First, an order to amend the name of the respondent and, secondly, an order that the Chief Executive Officer (the "CEO") of Customs be restrained until the trial of this proceeding, or further order, from releasing any of the goods, the subject of a Notice of a Seizure to Objector dated 4 August 2008 ("the Notice of Seizure"). At the same time, the respondent was directed to file and serve a defence to the proceeding by 4:00pm on 17 October 2008. 6 On 10 October 2008, the respondent was provided with a copy of the Orders made on 3 October together with a copy of the amended application and amended statement of claim. The amendments were limited to amending the name of the respondent. On 24 October 2008, the respondent was personally served with a further sealed copy of the 3 October 2008 orders, the notice of motion seeking judgment on default and the affidavit in support of that motion. 7 As is apparent, the respondent has not filed an appearance and no defence has been filed in accordance with the Orders made on 3 October 2008. 8 Unsurprisingly, Chanel now seeks judgment on default pursuant to O 35A rr 2(2) and 3(2) of the Federal Court Rules 1979 (Cth). So far as is relevant, those rules provide that: 2(2) For this Order, a respondent is in default if the respondent has not satisfied the applicant's claim and: (a) the time for the respondent to enter an appearance has expired and the respondent has failed to enter an appearance; or (b) the time for the respondent to file a defence has expired and the respondent has failed to file a defence; or (c) the respondent fails to attend a directions hearing; or (d) the respondent fails to comply with an order of the Court in the proceeding; or … 3(2) If a respondent is in default, the Court may: … (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 specified 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. Subrule 5 goes on to provide that: (5) The Court may make an order of the kind mentioned in subrule (1), (2) or (4), or any other order, or may give such directions, and specify such consequences for non‑compliance with the order, as the Court thinks just. 9 The requirement in O 35A r 3(2) that the applicant appear to be entitled to the relief on the statement of claim does not require proof by way of evidence of the applicant's claim. It requires an assessment of the claims pleaded in the statement of claim to ascertain whether there is a cognisable claim for relief (i.e. a claim is stated and the Court has jurisdiction to grant the relief sought): see e.g. Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433; Chanel Limited v Kim [2008] FCA 477 and Nokia Corporation v Yu (No 2) [2008] FCA 1088 at [8]. 10 Notwithstanding that O 35A r 3(2) does not require the applicant to file and serve proof by way of evidence in order for judgment on default to be granted, I should note that in this case it is apparent, both on the face of the amended statement of claim and from the affidavit material filed and served on the respondent, that there is evidence which would justify and warrant the default judgment now sought. 11 First, certificates of trade mark in relation to the Chanel Trade Marks were produced. 12 Secondly, an affidavit has been filed by the applicant, sworn by Kenneth James Taylor, who carries on business as a Trade Mark investigation service agent. Mr Taylor deposes to the investigation and reporting services he carries out on behalf of Chanel in relation to counterfeit products. Mr Taylor has a dual role; he has been retained by Chanel to investigate and, where appropriate, in conjunction with Chanel's solicitors, take action to prevent misuse of Chanel's intellectual property in Australia. Significantly, Mr Taylor's affidavit identifies the products that were seized and the subject of the Notice of Seizure as 92 pairs of sunglasses each bearing one or more of the Chanel Trade Marks. 13 That brings me to the application of O 35A. The respondent has not filed a notice of appearance or any defence. Moreover, he did not and has not appeared at the directions hearings and has failed to comply with the orders made on 3 October 2008. Accordingly, the respondent is in default for the purposes of O 35A r 2(2). 14 As I have indicated, although it is unnecessary to provide evidentiary proof for the purposes of O 35A, evidence was proffered in this case to the effect that: (1) the applicant is the owner of the Chanel Trade Marks; (2) the respondent sought to import into Australia the products I have identified, bearing one or more of the Chanel Trade Marks or marks which are substantially identical with or similar to one or more of Chanel Trade Marks; and (3) those Chanel Trade Marks were not applied to those goods with the licence or the authority of the applicant. In the circumstances, I consider that the allegations in the statement of claim are made out and moreover, it is appropriate for there to be relief of the kind, although not completely of the kind, sought in the application. 15 Although I will grant Chanel the substantive relief it seeks in its Notice of Motion dated 23 October 2008, I will not grant it the relief sought in paragraphs 4 and 5 of the draft orders attached to the motion. In those paragraphs the applicant sought orders for delivery up, on oath, to the applicant or its duly authorised agent for destruction of any remaining infringing goods and materials in the possession of the respondent. In the circumstances of this case, and given the history of the matter, it is inappropriate for such orders to be made. Where the respondent has not participated in the proceedings and none of the existence, location or nature of any other infringing materials has been specified or verified, an order for delivery up is likely to be futile and only lead to unnecessary additional expense on the part of not only the applicant but also the Court in the event any attempt at enforcement is made. 16 In the circumstances, therefore, I will grant a declaration that by his importation into Australia of 92 pairs of sunglasses each bearing one or more of the following Australian registered Trade Marks without licence or authority of the applicant, the respondent has infringed the Chanel Trade Marks and each of them as follows: 1. Australian Registered Trade Mark No. 281276 for CHANEL in class 16; 2. Australian Registered Trade Mark No. 525736 for CHANEL in class 9; 3. Australian Registered Trade Mark No. 525737 for: in class 9; 4. Australian Registered Trade Mark No. 852545 for CHANEL in classes 9, 21 and 28; 5. Australian Registered Trade Mark No. 852546 for: in classes 9, 21 and 28; and 6. Australian Registered Trade Mark No. 1011606 for: in classes 3, 9 and 14, (together referred to as the "Chanel Trade Marks") without the licence or authority of the Applicant, the Respondent has infringed the Chanel Trade Marks and each of them. 17 Having granted that declaration, the orders will be that: 1. The Respondent be permanently restrained, whether by himself his employees or agents or otherwise howsoever, from infringing any of the Chanel Trade Marks and in particular from using the Chanel Trade Marks or any of them or any name, word, mark, sign or device which is substantially identical with or deceptively similar to any one or more of the Chanel Trade Marks in the course of trade on or in relation to: (a) any of the goods in respect of which the Chanel Trade Marks are registered ("the Chanel registered goods"); (b) goods of the same description as any of the Chanel registered goods; (c) services that are closely related to any of the Chanel registered goods not manufactured or provided by or under the licence or authority of the Applicant or otherwise procuring or inducing any other person to do any of the acts specified in this order. 2. The goods seized by the Australian Customs Service ("Customs") pursuant to a Notice of Objection lodged by the Applicant under s 132 of the Trade Marks Act 1995 (Cth), and which are the subject of and referred to in the Notice of Seizure to Objector dated 4 August 2008 and bearing the Customs reference number 2008/024047 sent to the Applicant's agent by a delegate of the Chief Executive Officer of Customs in which the Respondent is identified as the designated owner of such seized goods, be forfeited to the Commonwealth and disposed of as the Chief Executive Officer of Customs directs. 3. The Respondent pay the Applicant's costs of the proceeding. 4. The proceeding be discontinued subject to the Applicant having liberty to apply to reinstate the proceeding limited to the question of quantum. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.