Hugo Boss AG v Hardge

REASONS FOR JUDGMENT NESKOVCIN J

1. The applicant claims that the respondent has engaged in trade mark infringement, misleading and deceptive conduct and the tort of passing off. It seeks default judgment against the respondent pursuant to r 5.23(2) of the Federal Court Rules 2011 (Cth).
2. The applicant is the registered owner of the trade marks listed in Schedule 1 of the orders, which relevantly include the names and trade marks "Hugo Boss" and "Boss" (Hugo Boss Trade Marks). The applicant claims that the respondent is the owner of business names and a domain name, and is seeking to register trade marks, that include the names "TBOSS" and "Tennis Boss Sportswear".
3. The proceeding was commenced by originating application filed on 7 May 2024 and a supporting statement of claim. The applicant claims that the respondent has infringed the Hugo Boss Trade Marks and contravened s 120 of the Trade Marks Act 1995 (Cth) and ss 18, 29(g) and (h) of the Australian Consumer Law (ACL), Schedule 2 of the Competition and Consumer Act 2010 (Cth), and that he has also engaged in the tort of passing off. The applicant seeks injunctions to restrain the respondent from infringing the Hugo Boss Trade Marks and other relief, including damages or an account of profits and delivery up of goods and advertising materials that bear the respondent's infringing marks.
4. The applicant filed an interlocutory application dated 26 September 2024 seeking default judgment and relied upon:
5. an affidavit dated 23 August 2024 of Miroslav Rukavina, a process server, regarding service of the originating application by leaving it at the respondent's residential address;
6. an affidavit dated 26 August 2024 of Nicholas Mason, a solicitor at Corrs Chambers Westgarth, who act for the applicant, outlining the steps taken to serve the originating application on the respondent in accordance with orders for substituted service made on 13 August 2024;
7. an affidavit dated 12 September 2024 of Mr Stephen Stern, a partner at Corrs Chambers Westgarth, which outlines the steps taken after service of the originating application, the correspondence sent to the respondent, the lack of response from the respondent and subsequent changes to the respondent's webpage and social media pages;
8. a further affidavit of Mr Stern dated 26 September 2024 in support of the application for default judgment (further Stern affidavit);
9. an outline of submissions dated 30 September 2024 and supplementary submissions dated 16 October 2024;
10. a further affidavit of Mr Mason dated 1 October 2024 confirming service on the respondent of the application for default judgment and supporting materials.
11. For the following reasons, I have determined that the applicant is entitled to the relief claimed and there should be orders substantially in the form sought in the applicant's proposed minute of orders provided on 15 October 2024.

background

1. The following factual claims are made in the statement of claim.
2. The applicant and other entities in its corporate group have carried on the business of marketing and selling luxury goods by reference to the names and trade marks "Boss" and "Hugo Boss" since the 1950s, and in Australia since at least 1984. The Hugo Boss Trade Marks are used on a range of products, including but not limited to clothing, footwear and headgear. In addition, the applicant has for many years sponsored prominent and widely publicised sporting events. According to the further Stern affidavit, the applicant has sponsored international tennis events including the 44th edition of the Stuttgart Open, which was known as the "Boss Open", and it has also sponsored the tennis player Matteo Berrettini.
3. The respondent is the owner of the business names "TBOSS" and "Tennis Boss Sportwear", the registrant of the domain name "TBOSS.com.au" (the TBOSS Website) and the operator of a Facebook page which uses the name "TBOSS Sportswear". The respondent has also applied for registration of the trade marks "TBOSS" and the "TBOSS" device.
4. Without authorisation and through the TBOSS Website, from a date unknown to the applicant, the respondent has advertised, offered for sale, imported or caused to be imported, supplied and/or sold goods bearing one or more of the Hugo Boss Trade Marks or one or more trade marks which are substantially identical with or deceptively similar to one or more Hugo Boss Trade Marks. The infringing conduct relates primarily to the use of the "TBOSS" word and device marks on the TBOSS Website, as well as offers for sale of a range of clothing and headgear items bearing the "TBOSS" word and "TBOSS" device.

procedural history

1. On 19 December 2023, the applicant's solicitors sent a letter of demand to the respondent raising the applicant's concerns in relation to the respondent's conduct and notifying the respondent that, unless he ceased the infringing conduct, the applicant would commence a proceeding in this Court seeking injunctions and other relief. The letter of demand was sent to an address listed on the 'Contact Us' page on the TBOSS Website (the address).
2. The respondent did not respond to the letter of demand and, on 21 January 2024, the applicant's solicitors sent an email attaching the letter of demand to an email address listed on the TBOSS Website (the email address). The email also stated that the solicitors expected that the applicant would commence a proceeding in this Court unless a satisfactory response was provided.
3. On 23 January 2024, the respondent sent an email, from the email address, to the applicant's solicitors stating that he had left for the United States on 17 December 2023 and had not received the letter of demand, noting that he resided at the address. The respondent stated that he would be returning to Australia in the next few weeks and a scheduled appointment should take place at that time. This was the only correspondence received from the respondent.
4. The applicant commenced this proceeding by originating application filed on 7 May 2024 and a supporting statement of claim. Attempts to serve the originating documents on the respondent on three separate occasions were unsuccessful.
5. On 7 August 2024, the applicant filed an interlocutory application seeking orders for substituted service under r 10.24 of the Rules.
6. On 13 August 2024, I made orders dispensing with the requirement for the applicant to personally serve the originating documents on the respondent. Pursuant to r 10.24 of the Rules, I made orders that service of documents filed in the proceeding be effected by delivering a copy of the documents to the address, sending a copy to the email address and sending a text message to the mobile telephone number listed on the TBoss Website. Such documents were taken to have been served 14 days after the applicant completed the steps required by the orders.
7. On 18 September 2024, I made orders in relation to the filing of the applicant's interlocutory application for default judgment, including orders that the application and any affidavits and submissions in support be served in accordance with the orders for substituted service made on 13 August 2024.
8. The affidavits filed on behalf of the applicant in support of the application for default judgment confirmed that the originating application, interlocutory application and supporting materials were served in accordance with the orders for substituted service. Further, while the respondent has not replied to the applicant's correspondence, other than to send the email referred to in paragraph 12 above, the TBoss Website now resolves to a blank webpage and the respondent's Facebook page resolves to a webpage that states that the Facebook page is unavailable.

relevant legislation and authorities

1. Rules 5.22 and 5.23(2) of the Rules relevantly provide as follows: 5.22 When a party is in default A party is in default if the party fails to: (a) do an act required to be done, or to do an act in the time required, by these Rules; or (b) comply with an order of the Court; or (c) attend a hearing in the proceeding; or (d) prosecute or defend the proceeding with due diligence. 5.23 Orders on default … (2) If a respondent is in default, an applicant may apply to the Court for: (a) an order that a step in the proceeding be taken within a specified time; or (b) if the claim against the respondent is for a debt or liquidated damages - an order giving judgment against the respondent for: (i) the debt or liquidated damages; and (ii) if appropriate, interest and costs in a sum fixed by the Court or to be taxed; or (c) if the proceeding was started by an originating application supported by a statement of claim or an alternative accompanying document referred to in rule 8.05, or if the Court has ordered that the proceeding continue on pleadings - an order giving judgment against the respondent for the relief claimed in the statement of claim or alternative accompanying document to which the Court is satisfied that the applicant is entitled; or (d) an order giving judgment against the respondent for damages to be assessed, or any other order; or (e) an order mentioned 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 specified in the order.
2. Under r 30.21(1)(b)(i) of the Rules, where a respondent is absent on the date fixed for hearing, the Court may order that the hearing proceed in the absence of the respondent.
3. The principles applicable to the discretion to enter a default judgment are well established and may be summarised as follows:
4. the power to give default judgment against a party under r 5.23(2) remains discretionary, and caution must be exercised when an applicant seeks orders against a defaulting respondent: Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 at [20] (Flick J); Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606 at [13] (Yates J);
5. the discretionary power to enter a default judgment is enlivened when an applicant applies to the Court for such an order and where a respondent is in default: Speedo at [22] (Flick J);
6. for the purpose of r 5.23(2)(c), the Court needs to be "satisfied" on the face of the statement of claim that the applicant is entitled to the "relief" claimed and that the Court has jurisdiction to grant that relief. The facts as alleged in the statement of claim are deemed to have been admitted by the respondent: Speedo at [23] (Flick J) and the cases cited there;
7. in addition to the facts alleged in the statement of claim, the Court may permit recourse to further limited evidence but may not admit evidence that would alter the case as pleaded: Speedo at [26] (Flick J);
8. to be satisfied that an applicant is "entitled to" the relief claimed, the Court must be satisfied that "each element of the relevant civil wrong involved is properly and discretely pleaded in the statement of claim": Speedo at [24] (Flick J), referring to Macquarie Bank v Seagle (2005) 146 FCR 400; [2005] FCA 1239 at [24] (Conti J) and Macquarie Bank Ltd v Seagle [2008] FCA 1417 at [20] (Jagot J)

consideration

1. Pursuant to the orders for substituted service made on 13 August 2024, the originating application was taken to have been served on the respondent on 31 August 2024. The respondent has not filed an appearance and did not appear at the hearing for default judgment.
2. I am satisfied that the respondent is in default and that service of the originating application on the respondent was effected by the required method and in sufficient time. I also note that the applicant's affidavits confirm that the interlocutory application was served in accordance with the orders for substituted service and was taken to have been served on the respondent on 14 October 2024. I was satisfied that the hearing should proceed in the respondent's absence.
3. The facts as alleged in the statement of claim are deemed to have been admitted by the respondent. That being the case, what must be determined regarding each of the contraventions alleged is whether, on the face of the statement of claim, the applicant has demonstrated an entitlement to the relief claimed.

Trade Marks Act

1. The applicant contends that the respondent has infringed trade marks of which it is a registered owner and contravened s 120 of the Trade Marks Act.
2. Section 120 of the Trade Marks Act provides (omitting the notes): 120 When is a registered trade mark infringed? (1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered. … (2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to: (a) goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or (b) services that are closely related to registered goods; or (c) services of the same description as that of services (registered services) in respect of which the trade mark is registered; or (d) goods that are closely related to registered services. However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion. … (3) A person infringes a registered trade mark if: (a) the trade mark is well known in Australia; and (b) the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to: (i) goods (unrelated goods) that are not of the same description as that of the goods in respect of which the trade mark is registered (registered goods) or are not closely related to services in respect of which the trade mark is registered (registered services); or (ii) services (unrelated services) that are not of the same description as that of the registered services or are not closely related to registered goods; and (c) because the trade mark is well known, the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the registered owner of the trade mark; and (d) for that reason, the interests of the registered owner are likely to be adversely affected. …. (4) In deciding, for the purposes of paragraph (3)(a), whether a trade mark is well known in Australia, one must take account of the extent to which the trade mark is known within the relevant sector of the public, whether as a result of the promotion of the trade mark or for any other reason.
3. The High Court recently outlined the principles in relation to trade mark infringement under s 120(1) in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 277 CLR 186; [2023] HCA 8 (Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ). There are two separate elements to establish infringement. First, that the person has used as a trade mark a sign in relation to goods and services and, second, that the trade mark is "substantially identical" with or "deceptively similar" to a trade mark registered in relation to those goods or services: Self Care at [22].
4. The statement of claim establishes the existence of registered trade marks, being the Hugo Boss Trade Marks, and the infringement of the Hugo Boss Trade Marks. The respondent has made use of the "TBOSS" word and device marks on the TBOSS Website and items of clothing bearing the TBOSS word and device marks that were advertised for sale on the TBOSS Website (Infringing Products). The "TBOSS" word and device marks are "substantially identical with, or deceptively similar to" the registered Hugo Boss Trade Marks in relation to goods in respect of which the Hugo Boss Trade Marks are registered.

Misleading and Deceptive Conduct

1. The applicant claims that the respondent has, since 2022, carried on trade or commerce in Australia under and by reference to business names, a website and social media pages each of which uses a name that incorporates the names "TBOSS" or "Tennis Boss" in relation to the advertising, promotion, marketing, offering for sale and sale of clothing and headgear.
2. Section 18 of the ACL provides: 18 Misleading or deceptive conduct (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
3. In Self Care at [80] and [81], the High Court stated that determining whether a person has contravened s 18 of the ACL involves four steps:
4. First, identifying with precision the "conduct" said to contravene the provision.
5. Second, considering whether the identified conduct was conduct "in trade or commerce".
6. Third, considering what meaning that conduct conveyed to its intended audience.
7. Fourth, determining whether the conduct in light of that meaning meets the statutory description of "misleading or deceptive or ... likely to mislead or deceive", that is, whether it has the tendency to lead into error.
8. I am satisfied the respondent's conduct in carrying on business by reference to, and advertising for sale and selling clothing and headgear bearing, the names "TBOSS" or "Tennis Boss" that are deceptively similar to the Hugo Boss Trade Marks has the tendency to lead members of the public to the erroneous beliefs pleaded in the statement of claim that the respondent's products are manufactured by or under the authority of, or are connected in the course of trade or commerce with the applicant, and are the applicant's products, or have the approval of the applicant. Further, that the conduct is in trade or commerce and is likely to mislead or deceive. The applicant has therefore established a prima facie case that the respondent's conduct contravenes s 18 of the ACL.

Representation in relation to sponsorship or affiliation

1. The applicant also claims that the respondent has represented, continues to represent or threatens to represent that the Infringing Products were manufactured under or with the sponsorship and/or approval of the applicant, and that the respondent himself has the sponsorship and/or approval of an affiliation with the applicant. The applicant claims that the conduct of the respondent contravenes s 29(g) and (h) of the ACL.
2. Sections 29(g) and (h) of the ACL provide: 29 False or misleading representations about goods or services (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: … (g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or (h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
3. The prohibitions under ss 18 and 29 are similar. While s 18 is concerned with "conduct", and s 29 is concerned with "representations", there is no meaningful difference between the expressions "misleading or deceptive" in s 18 and "false or misleading" in s 29: Australian Competition and Consumer Commission v Employsure Pty Ltd (2021) 392 ALR 205; [2021] FCAFC 142 at [87]-[88] (Rares, Murphy and Abrahan JJ). Section 29's purpose has been described as supporting s 18 "by enumerating specific types of conduct which, if engaged in trade or commerce in connection with the promotion or supply of goods or services, will give rise to a breach of the Act": Employsure at [87], citing R Miller, Miller's Australian Competition and Consumer Law Annotated (43rd ed, 2021), [ACL 29.20] p 1510. However, unlike s18, there is no express reference to "likely to mislead" in s 29, and therefore in order to succeed under s 29 the applicant must establish to the requisite standard that the respondent made representations that were actually false or misleading: Employsure at [89], citing Australian Competition and Consumer Commission v Google LLC (No 2) [2021] FCA 367 at [110] and [120] (Thawley J).
4. I am satisfied the respondent's admitted conduct of representing to consumers that the Infringing Products were manufactured under or with the sponsorship and/or approval of the applicant was a false or misleading representation. I am further satisfied that the respondent's admitted conduct of representing to consumers that he personally had sponsorship, approval or affiliation with the applicant was a false or misleading representation. The applicant has therefore established a prima facie case that the respondent's conduct contravenes s 29(g) and (h) of the ACL.

Passing Off

1. The applicant claims that by using the "TBOSS" word and device mark, and advertising for sale and selling clothing and headgear items bearing the "TBOSS" word and device mark, the respondent has engaged in the tort of passing off.
2. The elements for the tort of passing off are well established. As stated in State Street Global Advisors Trust Co v Maurice Blackburn Pty Ltd (No 2) (2021) 164 IPR 420 at [748] (Beach J), the tort of passing off involves three core concepts: (a) first, the existence of a reputation, at the time of the respondent's impugned conduct, in the mind of the relevant purchasing class for the applicant's goods or services; (b) second, a misrepresentation by the respondent, whether intentional or inadvertent, that its goods or services are those of the applicant; and (c) third, that the applicant has suffered or is likely to suffer damage.
3. The applicant claims that by reason of the way in which it has conducted its business and advertised and sold luxury products using the Hugo Boss Trade Marks, it has established a favourable reputation in Australia. Furthermore, the respondent has by his conduct made a representation, whether deliberate or not, that the Infringing Products are those of the applicant. The applicant further claims it has suffered and is likely to suffer damage.
4. I am satisfied that each of the elements of the tort of passing off set out in the statement of claim are established. The allegations of fact in the statement of claim relevant to the tort of passing off are taken to have been admitted by the respondent.

RELIEF

1. In respect of the trade mark infringement and the respondent's misleading or deceptive conduct, the applicant seeks injunctions in broad form pursuant to s 126(1)(a) of the Trade Marks Act and s 232 of the ACL. Injunctive relief similar to that which the applicant seeks in this case has been made in intellectual property cases similar to the present: see for example Speedo and Vitaco Health IP Pty Ltd v AFI Cosmetic Pty Ltd (No 3) [2024] FCA 598; Christian v Societe Des Produits Nestle Sa [2015] FCAFC 153; (2015) 115 IPR 421 at [131], [164] - [167] (Bennett, Katzmann and Davies JJ).
2. In addition, the applicant seeks an order cancelling the business names registered by the respondent, which the Court has power to make under s 51(1) of the Business Names Registration Act 2011 (Cth).
3. Further, the applicant seeks an injunction requiring the respondent to deliver up to the applicant all goods and advertising materials bearing any names or marks that are similar to the Hugo Boss Trade Marks, including the infringing TBOSS marks. The Court has power under s 22 of the Federal Court of Australia Act 1976 (Cth) to grant such relief: Microsoft Corporation v Short [2011] FCA 247 at [11] (Stone J).
4. Finally, the applicant also seeks an order for damages or an account of profits, at the applicant's option, under s 126(1)(b) of the Trade Marks Act.
5. Section 126(1)(b) of the Trade Marks Act provides: 126 What relief can be obtained from court (1) The relief that a court may grant in an action for an infringement of a registered trade mark includes: … (b) at the option of the plaintiff but subject to section 127, damages or an account of profits
6. The applicant submits that the election between damages and account of profits should be made at the conclusion of the damages enquiry, consistently with the principles discussed in Dr Martens Australia Pty Ltd v Bata Shoe Co of Australia Pty Ltd (1997) 75 FCR 230; [1997] FCA 505 (Goldberg J). I am satisfied the applicant is entitled to an order for damages or an account of profits, at the applicant's election after an enquiry has been conducted, pursuant to s 126(1)(b) of the Trade Marks Act.

Conclusion

1. I am satisfied that the applicant has established an entitlement to the relief claimed in relation to the contraventions alleged in the statement of claim, for the foregoing reasons. The applicant may apply for further orders in relation to any inquiry by the Court regarding an assessment of damages or account of profit. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Neskovcin.