Karlsson v Griffith University [2019] NSWSC 1335 | Case summary

Supreme Court of NSW|2019-10-01|Before: Adamson J

Solicitors: Bartley Cohen Litigation Lawyers (Defendant) File Number(s): 2019/229499

Introduction

On 24 July 2019 Annika Karlsson (the plaintiff) filed a document which purported to be a statement of claim against Griffith University (the defendant). The statement of claim was not in proper form. On 31 July 2019 the plaintiff filed a further document entitled "Amended Statement of Claim". By notice of motion filed on 28 August 2019 the defendant sought an order pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 14.28 that the whole of the amended statement of claim be struck out; an order that the defendant be excused from filing a defence under UCPR, r 14.3 until further order of the Court; orders relating to service on the plaintiff; and an order for costs.
Mr Hollo, who appeared on behalf of the defendant, submitted that the amended statement of claim was embarrassing within the meaning of UCPR, r 14.28(1)(b) in that the defendant could not reasonably apprehend the case it had to meet. Further, the pleading disclosed no reasonable cause of action and ought therefore be struck out pursuant to UCPR, r 14.28(1)(a).

The background to the dispute

In order to deal with the defendant's application, it is necessary to provide some background to the dispute between the parties.
At some time prior to 10 May 2013, the defendant adopted a slogan or brand "Know more. Do more". On 10 May 2013 the defendant filed an application to have "Know more. Do more" registered as a trade mark. The defendant's trade mark (1556369) was registered on 4 February 2015. By reason of the date of filing, the relevant priority date was 10 May 2013.
On 3 August 2014 the plaintiff, too, applied for registration of a trade mark which also contained the words "Know more. Do more". The plaintiff wished to use the words "Know more. Do more" in the form in which they appeared in the trade mark in her business of providing immigration and educational services for migrants. To that end she instructed solicitors, Baxter IP Trade Mark Attorneys, to write to the defendant. By letter dated 7 August 2018 the plaintiff's solicitors wrote to the defendant and advised them of the plaintiff's plans. They asked the defendant to sign a letter of consent and threatened that, if the defendant did not do so, they would file a non-use application under s 93 of the Trade Marks Act 1995 (Cth). The plaintiff's solicitors said in the letter that although both proposed trade marks were in class 41, which includes educational services, there would be neither conflict nor confusion between them by reason of the different context in which the trade marks appeared.
On 9 August 2018, in response to the plaintiff's solicitors' request, the defendant issued a letter of consent which allowed the plaintiff's trade mark application to proceed to registration. The defendant also lodged a cancellation of an existing in-force trade mark to deregister its own trade mark (1556369) because it was not using it as it had rebranded and no longer used those words in that form. However, the defendant noted that the trade mark "Know more. Do more" would still be present on its historical records and would appear on internet searches which picked up past references to it.
As a consequence of the letter of consent, the defendant's trade mark was cancelled on 14 August 2018. This led to acceptance of the plaintiff's trade mark application on 16 August 2018. There were subsequent entries on the trade mark register. On 20 August 2018 the cancellation of the defendant's IP right occurred since it was no longer the registered holder of the trade mark. This cancellation was apparently published on 30 August 2018, as also appears from the register. The plaintiff's trade mark was registered on 31 October 2018.
On 25 April 2019 the plaintiff wrote to the defendant and claimed that it was still using its trade mark and that it amounted to an infringement of the plaintiff's trade mark. The plaintiff claimed damages for infringement of $500,000. This amount was subsequently increased to the figure of $2 million which appears in the amended statement of claim.
The defendant and the plaintiff engaged in correspondence which led to the defendant responding in a detailed letter dated 13 May 2019 setting out the history of the matter which I have recounted in the narrative set out above. Ultimately, on 24 July 2019, as I have referred to above, a form of statement of claim was filed which was shortly thereafter followed by a document entitled "Amended Statement of Claim".
Mr Hollo, who appears on behalf of the defendant, has analysed the amended statement of claim and pointed out its deficiencies both in form and substance.
In order to address the substantial matters it is necessary to refer to the Trade Marks Act since it forms the basis the defendant's submission that the pleading does not disclose a reasonable cause of action. Section 20 of the Trade Marks Act provides that if a trade mark is registered, the registered owner has exclusive rights to use the trade mark and to authorise other persons to use the trade mark. Under s 20(2) the registered owner of a trade mark also has the right to obtain relief under the Act if the trade mark has been infringed. The rights are taken to have accrued to the registered owner as from the date of registration of the trade mark. The nature of the registered trade mark is provided for in s 21 which provides that a registered trade mark is personal property. Section 23 of the Act provides for limitations on rights if similar trade marks are registered by different persons as follows: "23 Limitation on rights if similar trade marks etc. registered by different persons If trade marks that are substantially identical or deceptively similar have been registered by more than one person (whether in respect of the same or different goods or services), the registered owner of any one of those trade marks does not have the right to prevent the registered owner of any other of those trade marks from using that trade mark except to the extent that the first‑mentioned owner is authorised to do so under the registration of his or her trade mark. Note: For deceptively similar see section 10."
Section 120 provides that 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.
Of present relevance, s 122 provides in part: "122 When is a trade mark not infringed? (1) In spite of section 120, a person does not infringe a registered trade mark when: . . . (e) the person exercises a right to use a trade mark given to the person under this Act . . ."
This provision supports the defendant's submission that it cannot be held to have infringed a trade mark at a time when it was the registered trade mark holder and, accordingly, was entitled to use it as provided for under s 20. For this reason, Mr Hollo submitted that not only has the amended statement of claim a tendency to cause embarrassment in the pleadings by reason of its form, but it also discloses no reasonable cause of action since at least it seeks to claim as against the defendant, who was for the relevant period the registered trade mark owner, damages for infringement, that being, on the defendant's contention, a legal impossibility.
Mr Hollo also relied on M Davison, I Horak, Shanahan's Australian Law of Trade Marks and Passing Off (6th ed, 2016, Lawbook Co.) and referred in particular to the passage at page 698 in which the authors say: "It is clear enough that a person using his or her own registered trade mark in relation to goods or services covered by the registration does not infringe a trade mark owned by someone else, this being a right conferred by s 20. On expungement of the registration, there will be no liability for past [use] of the expunged trade mark because expungement is not retrospective. … but an action for infringement would lie thereafter at the suit of the remaining registered owner."

Consideration

It is apparent from the amended statement of claim that its form is so embarrassing that the defendant should not be required to plead to it. I am also satisfied, in light of the narrative of largely uncontroverted objective facts and the undisputed law, that the amended statement of claim discloses no reasonable cause of action. Indeed it may be that the plaintiff has no reasonable cause of action against the defendant at all. However, that is not a matter which I can determine today having regard to the power under which the orders are sought. I note that the defendant does not in this application seek summary dismissal of the claim itself, but rather that the pleading be struck out pursuant to UCPR, r 14.28.
What Mr Hollo proposes in draft short minutes of order which I will mark MFI 2 is a regime whereby the current pleading is struck out and that the defendant is excused from filing a defence, but that the plaintiff be obliged to serve a proposed further claim on the defendant with a view to the defendant indicating whether it consents or objects to the plaintiff's proposed further claim. The purpose of these draft orders is to place the onus on the plaintiff to establish to the Court that any further pleading is in proper form and appropriately made before it may be filed.
In all the circumstances I am satisfied that the protocol proposed in the proposed short minutes of order is appropriate. I note that the plaintiff has indicated that she has already consulted several lawyers. It is open to infer that she has not necessarily taken the advice of those lawyers, although this is an area which is pre-eminently one which requires legal expertise. I note that the plaintiff also seeks orders for service and the orders which I make on that topic will be made by consent.
The other matter which must be addressed is that Mr Hollo has proposed in MFI 2 that leave be refused to the extent to which the proposed further claim makes any claim that the defendant by its use of the "Know more. Do more" trade mark in the period 10 May 2013 to 20 August 2018 infringed the plaintiff's trade mark under the Trade Marks Act.
The legal analysis which I have undertaken and set out above results in the conclusion, on the basis of objective and apparently incontrovertible evidence and by reason of the provisions of the Trade Marks Act referred to above, that the defendant, as the registered trade mark holder, was entitled to use the trade mark in the period between 10 May 2013 (being the priority date) and 20 August 2018 (being the date on which its trade mark was cancelled). However, given the protocol in the short minutes of order it would not appear to me to be appropriate that I make the order in the terms sought by Mr Hollo since that will be a matter for the Court hearing any application by the plaintiff for leave to file the proposed further claim to determine. I appreciate that the defendant has sought draft order (4) in the hope that it will have a prophylactic effect. I hope that my reasons are sufficient to serve that purpose.

Costs

The defendant has also sought its costs of the notice of motion and an order pursuant to UCPR, r 42.7(2) that they be payable forthwith. Mr Hollo submitted that this order is appropriate since the notice of motion is in effect a discrete matter which had to be brought by the defendant because of the plaintiff's unreasonable conduct. Mr Hollo referred to the plaintiff's conduct in not only filing a pleading which was bad in form, but also in filing a pleading which discloses no reasonable cause of action known to the law.
In the circumstances I am persuaded that it is appropriate to make such an order in the present case by reason of the submissions made by Mr Hollo to which the plaintiff had no substantive response. For these reasons I make the orders set out below.

Orders

I make the following orders: 1. Pursuant to UCPR, r 14.28, the whole of the amended statement of claim filed on 31 July 2019 be struck out. 2. The defendant is excused from filing a defence under UCPR, r 14.3 until further order of the Court or otherwise until the time provided in (5)(b) below. 3. The plaintiff to serve on the defendant a proposed further amended statement of claim (Proposed Further Claim) by 22 October 2019. 4. The defendant is to provide to the plaintiff its response to the Proposed Further Claim, by indicating whether it consents or objects to the plaintiff filing the Proposed Further Claim, by 5 November 2019. 5. In the event that the defendant consents to the filing of the Proposed Further Claim: 1. the plaintiff has leave to file and serve the Proposed Further Claim by 12 November 2019; 2. the defendant is to file and serve its defence to the Proposed Further Claim by 10 December 2019; 3. the matter be listed before the Registrar for further directions on 12 December 2019. 1. In the event that the defendant does not consent to the filing of the Proposed Further Claim: 1. the plaintiff is to file and serve any notice of motion and supporting affidavit seeking leave to file the Proposed Further Claim by 19 November 2019; 2. the defendant is to file and serve any affidavit in response by 3 December 2019; 3. the plaintiff's notice of motion be set down for hearing on 10 December 2019. 1. By consent, service on the plaintiff may be effected by: 1. posting a copy of any document to the plaintiff's address at 1010, 75 Shortland Esplanade, Newcastle, NSW 2300; or 2. sending a copy of any document by email to the plaintiff's email address at thana.ak@gmx.com. 1. Order the plaintiff to pay the defendant's costs of, and incidental to, the defendant's notice of motion dated 28 August 2019 on the ordinary basis, to be assessed or agreed, and to be payable forthwith thereafter under UCPR, r 42.7(2). 2. Liberty to apply on 3 days' notice.

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: 02 October 2019

Karlsson v Griffith University

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