F45 Training Pty Ltd v Body Fit Training Company Pty Ltd

Supreme Court of NSW|2020-12-02|Before: Nicholas J

Introduction

The plaintiff, F45 Training Pty Ltd (F45), commenced these proceedings on 7 September 2020. F45 franchises fitness studios throughout Australia. The first defendant, Body Fit Training Company Pty Ltd (BFT), also franchises fitness studios throughout Australia in competition with F45. The second and third defendants, Mr Cameron Falloon and Mr Richard Burnet (together the Directors), are directors of BFT.
In general terms, F45 alleges that BFT, in marketing and operating its fitness studios and fitness challenges at those studios, has engaged in misleading and deceptive conduct, passing off and infringement of a registered trademark. It alleges that the Directors were involved in those infringements of its rights. The defendants have filed a cross-claim seeking removal of the registered trademark.
By prayers 6, 7 and 8 of a notice of motion dated 2 October 2020, BFT and the Directors have applied for an order under s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) (the State Act) or s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (the Commonwealth Act) that these proceedings be transferred to the New South Wales Registry of the Federal Court of Australia. The application is opposed by F45.
F45 is the patentee of two Australian innovation patents, each of which is for "remote configuration and operation of fitness studios" (together the Patents). In general terms, the inventions claimed in the Patents relate to computer implemented systems and methods for remotely operating and configuring fitness studios. Both BFT and F45 rely on computer systems and methods to operate and run all of their fitness studios. The headquarters of BFT are in Melbourne. F45's headquarters are in Sydney.

Section 5

Section 5(1) of each of the State Act and the Commonwealth Act relevantly provides that, where a proceeding is pending in the Supreme Court and it appears to the Supreme Court that it is more appropriate that the relevant proceedings be determined by the Federal Court, the Supreme Court shall transfer the relevant proceeding to the Federal Court. In considering the question of transfer, the Court must have regard to:

whether the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the Supreme Court and capable of being instituted in the Federal Court;
the extent to which the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the Supreme Court; and
the interests of justice, It is common ground that these proceedings were capable of being instituted in this Court and that the matters for determination in the proceedings are within the jurisdiction of this Court. The only question is whether, having regard to the interests of justice, it is more appropriate that these proceedings be determined by the Federal Court.

In determining where the interests of justice lie, the Court is required to consider and identify the "natural forum" in which it might be expected that the dispute should be resolved. In determining that question, it is necessary to analyse objective factors to facilitate identification of the "natural forum", and the concomitant forensic and judicial advantages and disadvantages for the parties. In the present context, it is not necessary that the Supreme Court be a clearly inappropriate forum. Rather, it is both necessary and sufficient that, in the interests of justice, the Federal Court is more appropriate. If the Federal Court is more appropriate than this Court, however so slightly, the transfer to the Federal Court is mandatory. That is to say, this Court does not retain a residual discretion to refuse to transfer the proceedings if the Federal Court is, having regard to the interests of justice, more appropriate than this Court. [1]
When determining the more appropriate Court or "natural forum", the particular facts of each case must be considered. Some of the factors that are relevant are that:

justice can be done in one forum at substantially less inconvenience or expense, such as the availability of witnesses, than in the other forum;
the action has the most real and substantial connection with one forum, such as the relevant transactions took place and the parties carry on business in that forum; and
one forum can provide more effectively for the complete resolution of all matters in issue between the parties. [2]

In determining the interests of justice, the interests of all parties must be considered and the interest of the plaintiff, in selecting a particular forum, is not to be preferred over the interests of the defendant in having the proceedings determined in a different forum. [3]

The More Appropriate Forum

BFT asserts that it is inimical to the interests of justice, and the desirability of disputes being disposed of cheaply, quickly and efficiently, that the issues in the Federal Court Proceedings and in these proceedings be agitated and adjudicated in different Courts. BFT contends that several of the factual allegations in these proceedings are similar to, or arise out of the same factual matrix as, matters in issue in the Federal Court Proceedings. Specifically, F45 has raised in the Federal Court Proceedings, and adduced evidence as to, the landscape of the fitness industry in Australia and the fact that F45's training model and technology have become distinctive of F45 and have contributed to the growth and success of the F45 franchise model. BFT asserts that the extent to which F45's fitness studios, technology and training model is distinctive of F45, or otherwise forms part of the common general knowledge of persons working in the fitness industry in Australia as at the priority date of the Patents, is a live issue in both the Federal Court Proceedings and in these proceedings. Therefore, BFT contends, there is significant overlap between the issues in these proceedings and the issues in the Federal Court Proceedings.
The fact that there may be facts relevant to these proceedings that are also relevant to the Federal Court Proceedings is quite irrelevant to the exercise of the power conferred by s 5 of the State Act or the Commonwealth Act. It would, of course, be a totally different matter if there were a prospect that these proceedings could be heard concurrently with the Federal Court Proceedings. However, these proceedings could not be made ready for trial by 14 December 2020 and it has not been suggested that these proceedings could be heard concurrently with the Federal Court Proceedings.
Specifically, BFT has not suggested that it proposes to apply to the Federal Court to vacate the fixture for the hearing of the Federal Court Proceedings even if these proceedings were transferred to the Federal Court. Accordingly, these proceedings would continue independently of the Federal Court Proceedings in the Federal Court. Whether or not they would be allocated to the docket of Nicholas J is a matter for speculation.
While the Federal Court Proceeding are well advanced and fixed for hearing, these proceedings are in their infancy. The pleadings have not yet closed and, indeed, there are presently pleading disputes between F45 and the defendants in these proceedings. It is therefore likely that there will be further interlocutory disputes in these proceedings. However, there is no reason why those interlocutory disputes would be better or more easily or more efficiently resolved in the Federal Court than in this Court.
BFT asserts that the same or similar evidence is likely to be adduced in both the Federal Court Proceedings and in these proceedings and expects that it is likely to call the same witnesses, who reside in Victoria, Queensland, Tasmania and New South Wales, in both the Federal Court Proceedings and in these proceedings. However, it has not been suggested that if these proceedings are transferred, they would be transferred to any registry of the Federal Court other than the New South Wales registry. This Court has all of the procedures necessary for receiving evidence from witnesses who reside throughout Australia. There has been no suggestion that the Federal Court is armed with processes and procedures that would be more effective than those available in this Court.
BFT relies on the fact that these proceedings may give rise to disputes concerning trademarks and misleading and deceptive conduct, which arise under federal legislation. Further, these proceedings arise out of actions and conduct that occurred throughout Australia and not solely in New South Wales. However, there is no relevant limit on the power of this Court to deal with conduct and actions that may have occurred outside New South Wales.
BFT also asserts that the Federal Court is "an appropriate forum" in so far as it is "an experienced intellectual property court" with a specialist intellectual property list and a specific intellectual property practice note designed to put in place measures so as to provide an efficient and speedy trial. BFT also says that it is comparatively rare for trademark proceedings to be brought in a Supreme Court rather than in the Federal Court. It points out that the cross-claim seeks removal of a trademark and that appeals from the Registrar of Trademarks in relation to the registration of trademarks lie only to the Federal Court. [4] In addition, any appeal from a decision of this Court in these proceedings in relation to a question of infringement of a trademark would lie to the Full Court of the Federal Court. [5]
That is all very well. However, rightly or wrongly, the Commonwealth Parliament has conferred on the Supreme Courts of the States and Territories jurisdiction to deal with intellectual property matters. There may well be policy reasons why jurisdiction in intellectual property matters should have been limited to a single specialist court. However, the Commonwealth Parliament rejected that policy when it created the Federal Court of Australia in 1976. It may well be that there are judges of the Federal Court who, both before appointment and after appointment, have had greater experience in relation to intellectual property matters and questions than some judges of this Court. However, it has not been suggested that there are not judges of this Court who are perfectly capable of hearing and resolving the issues likely to be raised in these proceedings. There must be something more than merely the greater experience of Federal Court judges to give rise to the conclusion that the interests of justice dictate that the Federal Court is more appropriate than this Court for the determination of these proceedings.
No particular rationale was advanced on behalf of F45 for commencement of these proceedings in this Court rather than in the Federal Court, in circumstances where F45 chose the Federal Court for the Federal Court Proceedings. While one might have assumed that, in those circumstances, these proceedings would have been commenced in the Federal Court, for whatever reason they were not. I am not persuaded that the interests of justice dictate that it is more appropriate that these proceedings be determined by the Federal Court than by this Court.

Conclusion

It follows that that prayers 6, 7 and 8 of the notice of motion should be refused. There being no further relief still being sought in the notice of motion, the notice of motion should be otherwise dismissed. BFT should pay F45's costs in relation to prayers 6, 7 and 8 of the notice of motion.

Endnotes

See Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440 at [69]-[70].
See Access Australia Group Pty Ltd v Topper Hydraulic Platforms Pty Ltd [2019] WASC 265 at [26].
See BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 at [14] and [77].
See ss 55 and 56 of the Trade Marks Act 1995 (Cth).
See s 195(1) of the Trade Marks Act 1995 (Cth). DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 December 2020

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