Derrimut Health & Fitness Pty Ltd v Revival 24:7 Gym Pty Ltd

Introduction 1 The first applicant (Derrimut) operates gyms across Victoria and South Australia at which it provides fitness products and services. Derrimut relevantly holds a copyright license of five particular photographs which it publishes to promote its business. It also licences a trade mark from the second applicant (UPS), a supplier of fitness supplements, to promote and sell UPS' products. 2 The applicants initiated this proceeding against the respondent (Revival) on 8 November 2019 in relation to Revival's allegedly unauthorised use of these photographs and trade mark. Pending the trial of these claims, the applicants sought the following interlocutory relief: (a) a mandatory injunction requiring Revival to remove the photographs from its website; and (b) an injunction prohibiting Revival from using any materials, photographs, designs, trademarks, logos or copyright which are owned by the applicants. 3 The applicant's interlocutory application was heard on 22 November 2019. Revival has not filed any material in the proceeding and did not appear at the hearing. 4 At the end of the hearing, I delivered ex tempore reasons granting the interlocutory relief sought by the applicants. A revised version of those reasons is set out below.

Background 5 Derrimut owns 13 gyms across Victoria and South Australia and operates businesses trading as "Derrimut 24:7 Gym", "Protein 24:7" and "Derrimut Café". Derrimut alleges it has a well-established and reputable brand, with substantial goodwill within the market of fitness products and services. 6 As part of its ongoing marketing, Derrimut has published five photographs of its facilities (photographs), which are set out above these reasons for judgment in the annexure to my orders. The authors of the photographs were Trent Lockwood and Mark John. These authors have assigned in writing the ownership of the copyright in the photographs to Derrimut. 7 Each of the photographs may be described in turn as follows: (1) the first photograph (at page "ii" above) was uploaded to Derrimut's Facebook page on 22 December 2018 and depicts the cycling room at Derrimut's gym at Gepps Cross, a suburb of Adelaide (Gepps Cross Gym); (2) the second photograph (at page "iii" above) was uploaded to Derrimut's Facebook page on 24 December 2018 and depicts the gym machines at the Gepps Cross Gym; (3) the third photograph (at page "iv" above) was uploaded to Derrimut's Facebook page on 30 April 2019 and depicts the opening day of the Gepps Cross Gym and two staff members of Derrimut; (4) the fourth photograph (at page "v" above) was uploaded to The Advertiser during about July 2019 and depicts Derrimut's retail store, which stocks goods supplied by UPS to Derrimut; and (5) the fifth photograph (at page "vi" above) was uploaded to Derrimut's Facebook page on 23 July 2019 and depicts branded weights of Derrimut at Derrimut's gym in Angle Vale, a suburb of Adelaide. 8 UPS is the owner of the business trading as "UPS", an acronym for "Ultimate Performance Supplements". It conducts that business as a supplier of various fitness supplements. UPS alleges it is a well-established and reputable brand, with substantial goodwill within the fitness supplement market. 9 UPS is the owner of registered trade mark number 1298338 (trade mark). The trade mark is as follows: 10 UPS has licensed Derrimut to use and reproduce the trade mark. Part of the trade mark ostensibly appears in the fourth photograph in which Derrimut owns copyright (set out at page "v" above) at three top of the refrigerators depicted in that image. 11 According to the affidavit evidence filed by the applicants in early November, Revival was shortly to commence business as a gym and fitness supplements supplier. Revival's marketing material revealed that its gym in Bendigo was to open in November 2019. 12 From a date unknown, Revival has published the photographs (including the depiction of UPS' trade mark) on its website (https://www.revival247.com.au/) as part of its marketing and promotional activities. Derrimut has not authorised Revival to publish or use the photographs. UPS has not authorised Revival to use the trade mark. 13 On 23 October 2019, a letter dated 18 October 2019 from the applicants' solicitors was served on a director of Revival. By that letter, the applicants' demanded that Revival remove all of the photographs from its website. 14 On 15 November 2019, the same director of Revival stated in an email to the applicants' solicitors that the photographs would be removed sometime during the following week. However, as at the date of the hearing of the applicants' interlocutory application, 22 November 2019, Revival had not complied with the applicants' demand for removal of the photographs.

Relevant principles 15 The power to make the injunctions sought by the applicants is found in, as applicable, s 23 of the Federal Court of Australia Act 1976 (Cth), s 115(2) of the Copyright Act 1968 (Cth) (Copyright Act), s 126(1) of the Trade Marks Act 1995 (Cth) (Trade Marks Act) and s 80(2) of the Competition and Consumer Act 2010 (Cth) (Competition and Consumer Act). 16 Derrimut must establish that there is a serious question to be tried and that the balance of convenience favours the granting of the injunctions: Australian Broadcasting Corporation v O'Neill [2006] HCA 46; 227 CLR 57 at [19] per Gleeson CJ and Crennan J and [65]-[72] per Gummow and Hayne JJ. 17 As indicated, the applicants seek a mandatory injunction as well as a prohibitory injunction. The principles relevant to the granting of interlocutory injunctions generally, and mandatory interlocutory injunction specifically, were summarised as follows by Edelman J in Ocean Dynamics Charter Pty Ltd v Hamilton Island Enterprises Limited [2015] FCA 460: 26 The principles concerning interlocutory injunctions were not in dispute. They were clearly set out by the Full Federal Court in Samsung Electronics Co Limited v Apple Inc [2011] FCAFC 156; (2011) 217 FCR 238. Where an interlocutory injunction is sought in respect of private rights, it is necessary to identify the legal or equitable rights which are to be determined at the trial and in respect of which the final relief is sought (Samsung, 256 [52]). There are two questions: (1) has the applicant established 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 the applicant will be held entitled to relief); and (2) does the balance of convenience and justice favour the grant of an injunction or the refusal of that relief? 27 The balance of convenience includes a consideration of whether the refusal of the injunction would have the effect that the applicant will suffer irreparable injury for which damages will not be adequate compensation (Samsung, 259-260 [61] - [63]). 28 The two questions are not independent (Samsung, 261 [67]). The more that the balance of convenience supports a respondent, and the more serious the consequences for a respondent, the stronger will be the prima facie case that the applicant may need to establish to support an interlocutory injunction. Conversely, in a case like this where the balance of convenience strongly favours the applicant, then the strength of the prima facie case required to support the interlocutory injunction diminishes. 29 Although the court will often examine the strength of a case for an interlocutory injunction, the court will not normally "undertake a preliminary trial" and will rarely attempt to resolve disputes of fact: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, 622 (Kitto, Taylor, Menzies, and Owen JJ) quoting Linfield Linen Pty Ltd v Nejain (1951) 51 SR (NSW) 280, 281 (Roper CJ in Eq). And the extent to which the court will consider the merits of disputes as to legal issues will depend on the circumstances of the case. There is no inflexible rule (Samsung, 260 [64]). 30 There has been conflict in the authorities about whether these principles should apply equally to mandatory interlocutory injunctions. As I explained in JTA Le Roux Pty Ltd v Lawson (No 2) [2013] WASC 373 [15] - [23], I consider that the same principles should apply. 31 There are a number of authorities which suggest that different tests could apply depending on whether the interlocutory injunction is mandatory or prohibitory: Australian Airlines Commission v Commonwealth (1986) 17 FCR 445, 451 - 452; Midland Milk Pty Ltd v Victorian Dairy Industry Authority (1987) 82 ALR 279, 291; Active Leisure (Sports) Pty Ltd v Sportsman's Australia Ltd [1991] 1 Qd R 301, 304; 314 - 315; Storm Financial Ltd v Commonwealth Bank of Australia [2008] FCA 1991 [5]; Ryan v Electricity Networks Corporation [2009] FCA 734; (2009) 185 IR 201, 203 [7]; BGC Construction Pty Ltd v Minister for Works [2009] WASC 398 [19]; Parmalat Australia Pty Ltd v VIP Plastic Packaging Pty Ltd [2013] FCA 119; (2013) 210 FCR 1, 11 [17]. 32. These authorities generally followed comments of Gibbs CJ sitting at first instance in the High Court of Australia in The State of Queensland v Australian Telecommunications Commission (1985) 59 ALR 243, 245. The Chief Justice quoted from Halsbury's Laws of England and from Megarry J and said that a mandatory interlocutory injunction will not normally be granted; the court should have a "high degree of assurance" that following a final contested hearing the result would be no different to the result if the injunction were issued. It might be doubted whether Gibbs CJ intended that these remarks be taken as a general rule. In any event, the remarks were, however, qualified by his Honour's observations (which do not appear to have been intended to be exhaustive) of various circumstances in which a mandatory interlocutory injunction might be granted. 33 The better approach is, as Kiefel J has explained, that the classification of an injunction as 'mandatory' should not automatically attract a requirement that the Court should have further confidence in the correctness of the order: Racecourse Totalizators Pty Ltd v Totalisator Administration Board of Queensland (1995) 58 FCR 119, 123. The focus should be on the effect of the proposed order. A prohibitory injunction is capable, in some cases, of having a more serious effect on the parties than a mandatory one. There can also be a fine line between an order which requires something to be done and an order which prohibits something from being done; sometimes the former can be re-characterised as the latter. Merely characterising an interlocutory order as "mandatory" should not invite a different approach. 34 Nevertheless, there will often be characteristics of a mandatory interlocutory injunction that weigh against making such an order. One of those characteristics is the potential for mandatory orders to interfere with a person's liberty to a greater degree than a prohibitory order. Another is where an interlocutory mandatory injunction will have the effect that a defendant who has raised a triable issue will be deprived, by a mandatory order, of a full hearing of the issue if the effect of that mandatory order is final determination of the proceedings …

Prima facie case 18 I am satisfied for the following reasons that the applicants have established a prima facie case against Revival.

Copyright infringement 19 Derrimut's ownership of copyright in the photographs entitles it to prevent others from using those images: Commonwealth v John Fairfax & Sons Ltd [1980] HCA 44; 147 CLR 39 at 58 per Mason J. 20 In this case, the photographs: (a) are "artistic works" for the purposes of s 10 of the Copyright Act; (b) were published to the public in Australia by Derrimut or The Advertiser for the purposes of s 29(1)(a) of the Copyright Act; and (c) are subject to copyright pursuant to s 32(2)(a) of the Copyright Act. 21 Pursuant to s 31(1)(b) of the Copyright Act, and the assignments from the authors of the photographs described above, Derrimut has the exclusive right to: (a) reproduce the photographs in a material form; (b) publish the photographs; and (c) communicate the photographs to the public. 22 Revival: (a) is not the owner of the copyright in the photographs; (b) has not obtained the right to use that copyright; and (c) published the photographs in Australia. 23 I am accordingly satisfied that Derrimut has established a prima facie case that Revival has infringed and continues to infringe Derrimut's copyright in the photographs for the purposes of s 36 of the Copyright Act.

Trade mark infringement 24 Where there is an infringement of a trade mark registered under the Trade Marks Act, the Court will interfere by injunction because where it is the only effective remedy for the protection of this form of property: see generally Attorney General (NSW) v Brewery Employees' Union of New South Wales [1908] HCA 94; 6 CLR 469 at 582 per Isaacs J. 25 The trade mark was registered in the name of UPS on 18 December 2009. Pursuant to that registration, UPS has the exclusive rights to use (and authorise others to use) the trade mark: s 20(1) of the Trade Marks Act. 26 Revival has used the trade mark by publishing the photographs on its website. However, Revival is not an "authorised user" of the trade mark (s 8(1) of the Trade Marks Act) as UPS has not authorised Revival to use the trade mark in any manner. 27 Pursuant to ss 10 and 120(1) of the Trade Marks Act, the publication of the photographs by Revival constitutes the use of a sign that is likely to deceive or confuse consumers having regard to the goods in respect of which the trade mark is registered. 28 On this basis, I am accordingly satisfied that Derrimut has established a prima facie case that Revival has infringed the registered trade mark for the purposes of s 120(1) of the Trade Marks Act.

Misleading or deceptive conduct 29 In order to establish that the applicants have a prima facie case under s 18 of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act, there needs to be a finding of a "real, and not remote" chance that a member of the public would be led into error: Luxottica Retail Australia Pty Ltd v Specsavers Pty Ltd [2010] FCA 1344; 89 IPR 316 at [36] per Katzmann J. 30 Revival has published the photographs in trade or commerce. As such, in circumstances where Revival's website exhibits images of: (a) Derrimut's retail store; (b) UPS supplements (which have not been supplied by UPS to Revival); (c) the opening of the Gepps Cross Gym (in the context of conveying the opening of Revival's gym); and (d) Derrimut's gym machines and exercise rooms, I am satisfied that Derrimut has established a prima facie case that Revival's use or publication of the photographs is reasonably likely to mislead or deceive consumers looking to obtain gym services and goods into errors or misconceptions as to the nature, quality and extent of the services and goods offered by Revival. 31 On this basis, I am accordingly satisfied that Derrimut has established a prima facie case that Revival has engaged in conduct which is likely to mislead or deceive in contravention of s 18 of the ACL.

Passing Off 32 For similar reasons, I am satisfied that Derrimut has established a prima facie case that Revival's publication and use of the photographs is likely to mislead and deceive persons who are familiar with Derrimut into believing: (a) that there is a connection between Derrimut and Revival in relation to the goods and services provided by Derrimut; and/or (b) that Derrimut has consented to such publication and use of the photographs and gained commercial advantage from the provision of that consent. 33 I am likewise satisfied that Derrimut has established a prima facie case that Revival's use of UPS' trade mark is likely to mislead and deceive consumers into believing: (a) that there is a connection between UPS and Revival in relation to the trade mark and UPS' associated goods; and/or (b) that UPS has consented to such use of the trade mark in the fourth photograph and gained commercial advantage from the provision of that consent. 34 I am moreover satisfied that Revival's publication of the photographs is and/or will be detrimental to the reputation or goodwill of the applicants' respective businesses. 35 On this basis, I am accordingly satisfied that Derrimut has established a prima facie case of a breach of the tort of passing off by Revival.

Balance of convenience 36 As explained, the applicants demanded that Revival remove the photographs from its website by way of letter dated 18 October 2019 and served on a director of Revival on 23 October 2019. On 15 November 2019, that director of Revival said that the photographs would be removed sometime during the following week. However, as at the date of the hearing of the application, 22 November 2019, Revival had failed to comply with the applicants' demand. 37 Revival's use of the photographs on its website has not (as yet) caused Derrimut quantifiable damage. This, however, does not prevent the granting of an injunction: Beswicke v Alner [1926] VLR 72 at 75 per Cussen J, cited in Penfold Wines Pty Ltd v Elliott [1946] HCA 46; 74 CLR 204 at 213 per Latham CJ and Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd [2007] VSCA 311; 20 VR 311 at [92]-[95] per Dodds-Streeton JA, with Ashley JA and Cavanough AJA agreeing. 38 I am satisfied in the present case that there is a prima facie reason for believing that without an injunction Revival will continue the impugned conduct and thereby continue to infringe Derrimut's copyright and UPS' trade mark. 39 I am satisfied that the balance of convenience favours the granting of the injunctive relief sought by the applicants as there appears to be little inconvenience or cost to Revival in removing the photographs from its website and refraining from using the photographs pending the final determination of the proceeding. 40 I am also satisfied that this is a case in which it is appropriate to grant the mandatory interlocutory injunction sought by the applicants as any detriment to Revival (should the Court subsequently hold that the injunction was unwarranted) can readily be cured by restoring the photographs to Revival's website. Moreover, as the applicants have proffered the usual undertaking as to damages, in these circumstances the applicants will be liable to compensate Revival for any loss and damage suffered as a consequence of the grant of the injunctions.

Conclusion 41 For the reasons expressed above, I will grant the injunctive relief sought by the applicants and reserve the costs of the application. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Anderson J.