Koninklijke Douwe Egberts B.V. v Cantarella Bros Pty Ltd

The Court will conduct the case management hearing on 20 April 2023 in person in Melbourne and by video-link to a court room the New South Wales District Registry. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 The respondent has applied for an order pursuant to s 48(1) of the Federal Court of Australia Act 1976 (Cth), and r 2.02 of the Federal Court Rules 2011 (Cth), that the venue of this proceeding be transferred from the Victorian District Registry to the New South Wales District Registry of the Court.

Background 2 The first applicant (KDE) is incorporated in the Netherlands and is the registered owner of a trade mark, being a three-dimensional shape mark which takes the form of a glass jar and lid. The second applicant is incorporated in Australia and is alleged to be the authorised user in Australia of the trade mark. The applicants claim that since at least 1960 they have advertised, promoted, offered for sale, and sold coffee products in a clear glass jar substantially in the form of the shape mark, including under the Moccona brand. 3 The respondent is incorporated in Australia and, amongst other things, markets and sells freeze-dried instant coffee under the Vittoria brand in glass jars. From around 31 August 2022, the respondent commenced selling a 400g size of its freeze-dried coffee in Coles supermarkets. The applicants claim that the use by the respondent of its glass jar is the use of a sign as a trade mark that is deceptively similar to KDE's trade mark. In addition, the applicants allege that the respondent has committed the tort of passing off and has engaged in conduct in trade or commerce that is misleading and deceptive and which amounts to making false representations in contravention of sections 18, 29, and 33 of the Australian Consumer Law. 4 The respondent has filed a cross-claim by which it seeks to have KDE's trade mark cancelled on the grounds that: (1) the mark did not distinguish the applicants' goods from those of other persons; (2) the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars; and (3) as at the priority date, KDE did not intend to use, authorise the use of, or assign the mark for use in relation to registered goods. The respondent further claims that the trade mark should be removed on the ground of non-use as a trade mark. By this, I understand the respondent to claim that the applicants' glass jar is a utilitarian shape which does not involve the use of a trade mark for reasons including that it is not inherently distinctive: see, Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd [1999] FCA 816; 91 FCR 167 at [47] (Lehane J). The same point is made by way of defence to the applicants' claim that the respondent is using its glass jar as a distinctive mark. Finally, the respondent claims that the applicants have made unjustified threats to it which have caused loss, and seeks injunctions and damages in relation to those threats. 5 The applicants commenced this proceeding in the Victorian District Registry of the Court on 3 February 2023. By their originating application, the applicants sought an order that the hearing of the proceeding be expedited. At the first case management hearing on 10 March 2023, I proposed that the proceeding be fixed for hearing on liability issues on 25 October 2023 on an estimate of five days. This proposal was made on the express assumption that five days was a proper estimate. I stated that if five days was not a proper estimate, then the proceeding would have to be fixed on a later date when more hearing time was available. I did not fix the proceeding for hearing for reasons including that the respondent had filed its application seeking an order that the proceeding be transferred to the New South Wales District Registry of the Court. Moreover, the estimated length of hearing was disputed by the respondent. Senior counsel for the respondent described the applicant's estimate as a bold estimate. The respondent also disputed that the proceeding could be ready for trial by October having regard to its need to prepare evidence to address the issues raised by the claim and its proposed cross-claim. I left the question of likely length of hearing on the basis that I would hear further submissions today based upon more reliable information. 6 At the hearing today, senior counsel for the respondent submitted that experience suggests that there is a material risk that the respondent would not be ready for a final hearing on liability issues by October, and that a hearing was unlikely to be completed within five days. Counsel submitted that the applicants' trade mark claim was legally and factually controversial and that the trial of the proceeding was likely to be a very significant undertaking. Counsel submitted that that a more realistic trial estimate was eight to ten days having regard to the issues raised, the novelty of some of the issues, and the need for oral submissions in opening and closing by reference to authority and the evidence. 7 Senior counsel for the applicants maintained that five days was a reasonable trial estimate. The applicants relied on examples of other trade mark proceedings that were heard in fewer than five days. For its part, the respondent relied on examples of what were said to be comparable cases where the hearing had taken much longer than five days. I did not find these comparisons helpful. Likely trial length is a question of judgment in each case involving the application of experience and intuition. It is not an exercise that normally involves comparative analysis.

The respondent's submissions 8 By way of overview, counsel for the respondent submitted that the evidence adduced on the application overwhelmingly established that the parties are most closely connected to New South Wales. Counsel submitted that given the difference in size between the applicants and the respondent, the pressures of a large and involved trial would fall more heavily on the respondent. That pressure would be amplified by a trial in Melbourne, as opposed to Sydney. In particular, the respondent relied on the following considerations - (1) the registered office and principal place of business of the second applicant is in North Sydney, and it is to be inferred that those in Australia instructing the solicitors for the applicants are located in Sydney; (2) the respondent is a successful family-owned Australian company with its registered office and principal place of business in Sydney, where 169 employees are located; (3) while the respondent has an office in Melbourne, this is a sales office with 18 employees and not the location of its corporate functions, which is in Sydney, where the respondent has a small senior management team consisting of five people and its in-house counsel; (4) while the applicants' particulars of the infringing conduct include an allegation that a representative of the applicants purchased Vittoria freeze dried coffee in 400g sizes at a Coles supermarket at the Southland shopping centre in Melbourne, the applicants' claim includes an allegation that the respondent launched its product nationally; (5) the solicitor for the respondent anticipates that there is a reasonable likelihood that one or more employees of the respondent, and most likely people in senior management roles, may be required to give evidence, and those persons are based in the respondent's Sydney office; (6) in the event that witnesses of the respondent were required to travel to Melbourne to give evidence at trial, this would cause disruption to the respondent's business having regard to allowances that would have to be made for air travel and accommodation in order to ensure the witnesses' availability when required; (7) the respondent's in-house counsel, its team of external solicitors, and its counsel, are all located in Sydney; (8) the partner of Herbert Smith Freehills in Sydney, together with a senior associate who have the carriage of this matter for the respondent, have a long-standing professional relationship with the respondent, having acted for it in a number of matters over the years; (9) by reason of the above considerations, any substantive or final hearing in Melbourne would result in significant increased costs to the respondent; (10) as to the applicants, the second applicant's management are located in Sydney, as evidenced by an affidavit of an employee of the second applicant, Ross Tillman, that was filed on behalf of the applicants in support of their application for expedition, and who gave his address as North Sydney; (11) senior counsel for the applicants has chambers in Sydney and is now based in Sydney; (12) the solicitors for the applicants have offices across Australia, including an office in Sydney; (13) the applicants are part of a large multinational group of companies known as the JDE Peet's group which in turn is part of a portfolio of brands of JAB Holding Company Sàrl which has annual profits across all its investments measured in billions of US dollars; (14) JDE Peet's NV is listed on the stock exchange at Amsterdam and its annual report for 2022 recorded adjusted EBIT for 2022 in the Asia Pacific region as €123 million; and (15) the applicants have sufficient resources to cover the costs of having their legal team travel to Sydney for hearings, and those costs may be recoverable should the applicants be successful.

The applicants' submissions 9 In response, counsel for the applicants submitted that the application to transfer the proceeding to the New South Wales District Registry was premature, and paid insufficient regard to the national character of the Court, and in particular the National Court Framework. Counsel referred to the capacity of the Court to make arrangements to facilitate case management, interlocutory hearings and, where appropriate, aspects of the final hearing to be conducted via electronic platforms which enable remote appearances or attendances. Counsel relied on the following considerations to resist the application to transfer the venue of the proceeding to the New South Wales District Registry - (1) the applicants' solicitor deposed that his firm receives instructions from a representative of KDE who is based in England, and others based in The Netherlands and in Australia; (2) according to its website and LinkedIn page, the respondent has at least 250 employees and has offices in all States of Australia, as well as New Zealand, Los Angeles, and New York; (3) the applicants' solicitor anticipates that at least two of their witnesses were located in Victoria, although noting that it was premature to say whether they would be required to give evidence at trial; (4) corporate records showed that companies within the corporate group of which the respondent is a member earned consolidated revenue of A$213 million and consolidated net profit before tax of $A13 million in the financial year ending 30 June 2022; (5) the respondent has been a party to several identified proceedings concerning the enforcement of intellectual property rights, from which it is to be inferred that the respondent is familiar with the process of legal proceedings and is accustomed to the business disruption associated with them, however I note that each of the five court proceedings that were referred to by the applicants' solicitor was filed in the New South Wales District Registry of this Court; (6) the partner and associate at Davies Collison Cave Legal, the solicitors acting for the applicants, are located in Melbourne; (7) senior and junior counsel for the applicants have permanent chambers in Melbourne, although noting that senior counsel for the applicants also has chambers in Sydney; (8) the respondent's solicitors, Herbert Smith Freehills, have an office in Melbourne; (9) the address for service listed on the Australian Register of Trade Marks for 86 of 88 of the respondent's currently registered marks is the office of Herbert Smith Freehills in Melbourne; and (10) any transfer of the proceeding to New South Wales and allocation to the docket of a different judge would likely lead to significant delay in circumstances where the applicant had sought an expedited hearing.

Consideration 10 Subject to the overarching purpose in s 37M of the Federal Court of Australia Act, the power conferred on the Court or a judge by s 48 of the Act to direct that a proceeding or part of a proceeding be conducted or continued at a place specified in the order is unfettered, and should be exercised flexibly having regard to the circumstances of the particular case. The place of residence of parties and of witnesses, expense to parties, the place where the cause of action arose, and the convenience of the Court itself are some of the factors that may be relevant in particular circumstances: National Mutual Holdings Pty Ltd v Sentry Corporation (1988) 19 FCR 155 (Sentry) at 162 (Bowen CJ, Woodward and Lockhart JJ); and see Plankton Australia Pty Limited v Rainstorm Dust Control Pty Limited [2017] FCA 1616 at [10] (Lee J) in relation to the relevance of s 37M. 11 The starting point in determining an application to change the venue of this proceeding is that it has been commenced in the Victorian District Registry. Although senior counsel for the respondent submitted that filing in Victoria was capricious, I do not accept that to be so. The question posed by the Full Court in Sentry at 162 was "Why should it be changed?". To justify a change the Court has to be satisfied that, after considering all relevant matters, there is sound reason to direct that the proceeding be conducted or continued elsewhere. In addressing this issue, ultimately, "the test is where can the case be conducted or continued most suitably bearing in mind the interests of all the parties, the ends of justice in the determination of the issues between them, and the most efficient administration of the Court": Sentry at 162. As French J said in Lamb v Hog's Breath Company Pty Ltd (No 1) [2007] FCA 49 at [7] - The question of the Registry from which the proceedings should be conducted does not raise matters of high principle. It is essentially a matter of case management and proper recognition of the legitimate interests of each of the parties reflected, in part, in the balance of convenience as between them and, of course, the convenience of the Court and any economies and efficiencies that may attach to one choice or another. 12 The location of the parties' legal practitioners was relied on by the respondent. In Baxendale's Vineyard Pty Ltd v The Geographical Indications Committee [2007] FCA 22; 156 FCR 444, Mansfield J had to consider what was an appropriate Registry, which was defined by O 53, r 1 of the Federal Court Rules 1979 (Cth) and which related to appeals under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). The former O 53, r 2(2) required that a notice of appeal be filed in an appropriate Registry: see now, r 33.12(3) of the Federal Court Rules 2011 (Cth). It is relevant to note that Mansfield J stated at [24] that the parties did not seek to rely on jurisprudence concerning the transfer of proceedings. Nonetheless, in the context of considering what was the appropriate registry for the hearing of an appeal from the Tribunal, his Honour stated that generally speaking little weight should be given to the location of the parties' counsel and solicitors. On the other hand, it has been held that an ongoing relationship with legal advisers may be a matter to be weighed in the balance, at least if there are details of the relationship: Australian Competition and Consumer Commission v Pauls Ltd [2002] FCA 71 at [13] (O'Loughlin J); BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd (No 6) [2002] FCA 807 at [25] (Mansfield J). However, in BWK Elders Mansfield J also stated that it is inappropriate that a party to litigation should, by reason of the selection of its solicitor, create a circumstance whereby the Court is called upon to determine that the proper place of a proceeding should be a place other than where the proceeding was commenced. 13 It has been emphasised in recent cases that the Court is a national court with resources and technology available to it to conduct proceedings in a flexible, efficient fashion. Documents are filed electronically. Technology permits the conduct of case management hearings and interlocutory hearings with counsel and solicitors appearing from different registries. There is no reason that case management and interlocutory hearings in this proceeding cannot be conducted with the use of audio-visual links when requested by one of the parties. In relation to trials, in a suitable case the evidence of a witness may be heard by audio-visual link rather than in-person. Whether that is appropriate will depend on the nature of the case, and the type of evidence involved. As a national court, judges of the Court routinely sit away from their home State, and the Court is able to sit and hear evidence in-person from any location in Australia. 14 With a national court comes a national profession. In this application, the location of the parties' legal practitioners is not a factor that points one way or the other. While it was open to the respondent to engage Melbourne-based solicitors and counsel, the respondent was perfectly entitled to retain solicitors and counsel of its choice with whom it has an existing relationship. There is nothing to suggest that counsel or solicitors for any of the parties in this proceeding do not practise nationally. The location of the parties' legal practitioners is therefore neutral to my consideration. 15 Much emphasis was placed by the respondent on the evidence of the location of the head offices of both the second applicant and the respondent in Sydney. Against that, just as the Court is a national court, it appears that the businesses in which the parties are engaged are national businesses involving the marketing and sale of coffee products across Australia. 16 I accept that this is a significant claim, and that the respondent's management will likely have to devote considerable time to the conduct of this proceeding. This is a business risk for the respondent. The consumption of management time will occur whether the venue of the proceeding is Sydney or Melbourne. We are well into the 21st century, and highly developed means of personal communication and remote working are available to all those working in commerce. The Court regularly livestreams its hearings upon request to interested persons. Without being critical, I consider that the claimed inconvenience to management of the respondent might be overstated. While one or more members of the respondent's management will likely attend a five, or alternatively an eight to ten day liability trial which, if in Melbourne, may involve travel and accommodation costs, this is not an extraordinary burden for what is a significant national business. 17 The places of the alleged infringements and the impugned conduct are neutral because I conclude that the applicant's claim embraces alleged infringing conduct across Australia, and the injunctive relief that it seeks would extend across Australia, as Coles is a national supermarket chain. Location is relevant to the causes of action alleged to the extent that the claims are to be characterised as national claims. 18 As to witnesses, the location of expert witnesses is a neutral consideration at this stage because no expert witnesses have been identified, and otherwise the location of experts would not usually be a consideration of great weight. In relation to the evidence of the applicants' solicitor that the applicants have two witnesses in Victoria who might be called, the solicitor did not indicate in his affidavit the identity of the witnesses, or whether they were lay or expert witnesses, or the nature of their evidence, or whether the applicants proposed to call any witnesses from New South Wales. In these circumstances, I place no weight on the prospect that the applicants might call two witnesses who are located in Victoria. 19 As to the respondent's lay witnesses, I accept that there is a likelihood that the respondent may wish to call lay evidence from one or more persons in managerial positions who are located in its Sydney office. It is too early to say what evidence might be adduced, and whether the evidence could be given by audio-visual link. The evidence-in-chief will likely be in affidavit form. Counsel for the applicants might prefer to cross-examine in-person. And depending on the nature of the issue, the Court may wish to hear the evidence in-person. The time involved will likely be limited to cross-examination and any re-examination. Once all the affidavit evidence is filed, it is open to the Court to consider whether some or all of the evidence in the proceeding should be heard in Sydney. 20 I return to the likely hearing date. It might be tempting for one party to think that it has a straight-forward case, but once the proceeding and then the trial commences the case becomes dynamic. It is evident from the pleadings, the submissions of the parties, and the little correspondence that I have seen, that this will be hard fought litigation. Having considered carefully the issues in the proceeding, as matters presently stand I have some doubt that the hearing could conclude within five days. I respect the views of both senior counsel in relation to trial length, and there remains disagreement. Senior counsel for the respondent impressed upon me possible complexities in this case. If the hearing cannot take place over a five day period in October 2023, then I would likely fix it for a longer period in March 2024 so that the case could be comfortably accommodated without potential disruption to this proceeding and to other commitments of the Court. 21 As to whether the parties could be ready for a hearing in October 2023, the position of the applicants at the first case management hearing was to submit to orders that they file their evidence-in-chief on liability issues by 21 April 2023. The applicants now seek a two week extension of that deadline. The applicants are to be commended for seeking this extension well before the time for compliance has arrived, but already the timetable has slipped. The position of the respondent remains that the case cannot reasonably be ready for hearing in October 2023, and has proposed a timetable for necessary interlocutory steps that illustrates the difficulties.

Analysis 22 I commence by saying that I am not persuaded by the submission of counsel for the applicants that the application to transfer the venue of the proceeding has been brought prematurely. On the contrary, in circumstances where the applicants sought expedition, it was appropriate for the respondent to file the transfer application shortly before the first case management hearing. Nor am I persuaded that it is too early to rule on the application and that any decision should be deferred. 23 As I have mentioned, while senior counsel for the respondent submitted that the applicants commenced this proceeding in the Victorian District Registry capriciously, I do not consider that the material would support any such conclusion. This proceeding has a true national flavour and has been regularly filed in the Victorian District Registry. As I have mentioned, the parties conduct their businesses nationally, and the subject-matter of the claims and cross claims in the proceeding are national in character. 24 The Court could accommodate an early trial in October, if that is feasible. However, as I have indicated, if there is any serious prospect that the hearing would take more than five days, and that it could take eight to ten days as senior counsel for the respondent has submitted, then I would likely fix the liability hearing for March 2024 so that it could be comfortably accommodated. In any event, whether it is realistic to think that the proceeding could be ready for a hearing in October is plainly contestable on the material before me, and this may well be a supervening consideration. 25 In circumstances where in my assessment there are no considerations that decisively favour Sydney over Melbourne as the venue, I am not persuaded that the overarching objective in s 37M of the Federal Court of Australia Act and the balance of convenience requires that the venue of the proceeding be transferred. As should be evident from what I have said, this conclusion does not preclude a later application on proper material that the Court should sit in Sydney to hear some or all of the evidence. 26 The respondent's interlocutory application to have the venue of the proceeding transferred will be dismissed. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan.

SCHEDULE OF PARTIES VID 61 of 2023 Cross-Respondents Second Cross-Respondent JACOBS DOUWE EGBERTS AU PTY LTD