Jemella Australia Pty Ltd v Bouobeid

EX TEMPORE REASONS FOR JUDGMENT 1 This is an application in which the applicant seeks final relief against the first respondent in terms of a permanent injunction restraining the respondent from importing, promoting, distributing, advertising, offering for sale, displaying or otherwise using counterfeit hairstyling products bearing the mark "GHD Hair Styling Iron," "GHD Styler," or "GHD" or any other mark which would infringe trade mark number 951664 being a mark bearing the letters GHD registered for the class of articles the subject of these proceedings. Apart from that order, the applicant seeks delivery up of infringing articles, damages or, alternatively, an account of profits and other related relief. 2 The applicant also seeks interlocutory orders which are the subject of the application this morning. The application has not been served upon the first respondent and, by definition, the applicant is ex parte in terms of the injunction. The applicant seeks an order directed to the Chief Executive Officer of the Australian Customs Service for the purposes of s 137(5) of the Trade Marks Act 1995 (Cth). That section provides that: If after 20 working days from the date on which the action was brought, there is not in force at any time an order of the court directed to the Customs CEO preventing the goods from being released, the Customs CEO must release the goods to their designated owner. 3 The proceeding in question was commenced on 24 November 2009 in respect of 10 hairstyling devices which are the subject of a Notice of Seizure to Objector under the Trade Marks Act dated 19 October 2009 which was served upon or issued to the applicant on 23 October 2009. An immediate question arises in relation to the steps taken consequent upon that notice. The immediately material matter is that the Trade Marks Act provides that the applicant may bring an action for infringement of a notified trade mark in respect of the goods the subject of the notice and give notice to the CEO of that action in writing within a period of 10 working days from 23 October 2009, or, if the Chief Executive Officer extends the period under s 137(1) of the Trade Marks Act, within the extended period. 4 The period of 10 working days from 23 October 2009 expired on 9 November 2009 and on that day the applicant sought an extension of the period. An extension was granted on Monday, 9 November 2009, at 1.36 pm by the Australian Customs Service by email extending the time to 23 November 2009. By operation of s 136 of the Trade Marks Act, the Customs CEO must release the seized goods to their "designated owner" (in this case, the first respondent for the purposes of Part 13 of the Trade Marks Act) if within the action period (being the period expiring on 23 November 2009) the applicant has not brought an action for infringement of the notified trade mark in respect of the goods, and given notice to the Customs CEO in writing of that action. 5 Section 137(1) of the Act provides that: An objector may bring an action for infringement of a notified trade mark in respect of seized goods and give notice of it to the Customs CEO: (a) - within the period (notified period) of 10 working days; or (b) - if the Customs CEO, being satisfied that in the circumstances of the case it is fair and reasonable to do so, has extended the notified period for a number of working days not exceeding 10; - within that period as so extended by the Customs CEO. 6 The question that arises is whether an order ought to be made under s 137(5) directing the Customs CEO not to release the goods to the designated owner. 7 Section 137(5) is in these terms: If, after 20 working days from the day on which the action was brought, there is not in force at any time an order of the court directed at the Customs CEO preventing the goods from being released, the Customs CEO must release the goods to their designated owner. 8 The application made today is made on the 20th working day from the date of commencement of the proceeding. 9 It is clear that the proceeding was not commenced within the extension period and, by definition, notice was not given to the Customs Service of the proceeding within the extension period. A question arises as to whether an order ought to be made under s 137(5) in circumstances where there has been a failure to commence the proceeding within the extension period and give notice of it within the extension period. As I mentioned, s 136 creates a statutory direction to the CEO to release the goods if the proceeding is not commenced and notice given within the period. 10 Section 136 is headed "Release of Goods to Owner - No Action for Infringement and s 137 is headed "Action for Infringement of Trade Mark". Some discussion has arisen in earlier authorities, including Jemella v Mackinnon & Another 77 IPR 243, in which Logan J had to consider whether non-compliance with these provisions as to commencement and notification within the extension period, might have the effect of depriving the applicant of its standing to maintain infringement proceedings. I am satisfied that ss 136 and 137, taken together, do not deprive the applicant of its standing to maintain proceedings for infringement of the trade mark. Section 137 is not a primary empowering provision conferring rights of action in the applicant. It is permissive in the context in which it appears. Those rights are conferred by s 20 and the provisions of Part 12 of the Trade Marks Act. Section 137 recognises that a trade mark owner may elect to bring proceedings and ss 136 and 137 address what is to occur in the circumstances of those sections in respect of seized goods if the relevant steps are not taken. However, the provisions should be read subject to an order that might be made under s 137(5) to, in effect, preserve the status quo in circumstances where the Court is satisfied that there is a prima facie case of infringement. Nevertheless, a question arises as to whether it is appropriate to make an order directed to the Customs CEO preventing the goods from being released, in all the circumstances, in the exercise of discretion, when s 136 imposes a statutory obligation upon the Customs CEO to release the goods in the circumstances there identified and s 137 imposes time constraints. That directs attention to the merits. 11 In this case, I am satisfied having regard to the affidavit of Ms Kelly Gardner and the matters deposed to by Mr Grigson, that a prima facie case or serious question to be tried is made out on the substantive question for the purposes of Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 (particularly at [65] to [72]). Having regard to that matter, I am satisfied that an injunction order ought to be made directed to the first respondent. The affidavit of Ms Gardner also deposes to a conversation she had with the first respondent in which the first respondent confirmed his address for receipt of particular material and said that he had signed and would return straightaway a form effecting a forfeiture of the particular articles. That did not occur. 12 The conversation suggests plainly an inference that the respondent accepts that the goods are counterfeit goods. The notice in question is a Notice of Consent to Forfeit Goods under Part 13 the Trade Marks Act. Being satisfied of those matters and particularly having regard to the paragraphs of Ms Gardner's affidavit, namely, paragraphs 30 to 33, taken in conjunction with paragraph 3, I am satisfied that although only two of the articles are the subject of the counterfeit analysis by her, an inference arises that if two of the articles, depicted in the material, are established as counterfeit articles, then the remaining eight articles making up the bundle of 10 articles the subject of the notice, would also be likely to be counterfeit articles. 13 Being satisfied of those matters, it is appropriate to make an order restraining the first respondent in terms of the proposed interlocutory injunction. Since the articles are demonstrated on the material, at least at the standard of a serious question to be tried or prima facie case, to be counterfeit articles, it seems to me that the status quo ought to be preserved by making an order directed to the Customs CEO not to release the counterfeit articles into the hands of the designated owner. I am satisfied that in light of the serious question to be tried, an order ought to be made under s 137(5), both having regard to its intersection with s 136(1) and its context within Part 13 more generally and the circumstances to be determined in the proceedings. 14 However, a serious question of construction will also arise to be determined at trial. Accordingly, it seems to me that it is appropriate to make the interlocutory order contemplated by paragraph 2 of the claim for interlocutory orders. The interlocutory orders provide for liberty to apply three days notice. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood 18 December 2009.