the parties' respective positions
39 By its motion, notice of which was amended on 19 August 2003, Nokia sought summary judgment in the following terms:
(a) a permanent injunction restraining the Respondent whether by himself, his employees or agents or otherwise howsoever from infringing any of the [Nokia trade marks] and in particular from using the Nokia trade marks or any of them or any name, word, mark, sign or device which is substantially identical or deceptively similar thereto in the course of trade on or in relation to:
· any of the goods in respect of which the Nokia Trade Marks are respectively registered ("registered goods");
· goods of the same description as registered goods; or
· services that are closely related to registered goods,
not manufactured or provided by or under the authority of the Applicant or otherwise procuring or inducing any other person to do any of the acts specified in this paragraph (a);
(b) a mandatory injunction requiring the Respondent to perform the Deed of Undertaking signed by him …;
(c) a declaration that the use by the Respondent whether by himself, his employees or agents or otherwise howsoever of any of the Nokia Trade Marks or any name, word, mark, sign or device which is substantially identical or deceptively similar thereto in the course of trade on or in relation to:
· any of the registered goods;
· goods of the same description as registered goods; or
· services that are closely related to registered goods,
not manufactured or provided by or under the authority of the Applicant constitutes an infringement of the Nokia trade marks;
(d) delivery up on oath to the Applicant or its duly authorised agents for destruction under supervision of all goods in the possession, power, custody or control of the Respondent, his employees or agents or otherwise, to which any of the Nokia Trade Marks or any name, word, mark, sign or device which is substantially identical or deceptively similar thereto which has been applied without the licence or authority of the Applicant;
(e) delivery up on oath to the Applicant or its duly authorised agent for destruction under supervision of all catalogues, price lists, brochures and other documents and materials in the possession, power, custody, or control of the Respondent, his employees or agents or otherwise, bearing any of the Nokia Trade Marks or any name, word, mark, sign or device which is substantially identical or deceptively similar thereto which has been applied without the licence or authority of the Applicant;
(f) costs.
With the exception of costs, Mr Mai gave his consent to orders in these terms.
40 By its motion, Nokia also sought orders that:
The Respondent pay the Applicant damages for infringement of the Nokia Trade Marks, to be assessed with interest thereon, or, at the option of the Applicant on a date to be fixed, the Respondent account for the profits made by him by the said infringements and pay the Applicant the amount found to be due on the taking of such account, together with interest thereon.
The Respondent provide discovery verified by affidavit to the Applicant within twenty-eight (28) days of the making of these orders in respect of all sales by him of items bearing the Nokia Trade Mark or any of them.
Mr Mai gave his consent to orders for discovery, but he opposed any order for damages to be assessed or for an account of profits to be made, in respect of any infringement by him of the Nokia trade marks. Counsel for Mr Mai stated that, whilst Mr Mai consented to the injunctive and declaratory relief sought by Nokia, he did not consent to an order for damages because:
even though the respondent has agreed to in effect stop selling these products, it is still submitted that it has not infringed in a manner that would give rise to damages. (transcript 14)
consideration of the parties' positions
41 The authorities established that, when the issue is one of trade mark infringement under s 120 of the Trade Marks Act 1995 (Cth), the central issue to be determined is whether the use complained of is "use by the alleged infringer as a trade mark": see Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 21 IPR 1 ("Johnson & Johnson") at 24 per Gummow J. As his Honour said, referring to Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407, at 426 per Kitto J, this enquiry requires some consideration of the "'purpose and nature' of the impugned use": see Johnson & Johnson at 24. In Johnson & Johnson, at 25, Gummow J summarised the position as follows:
[I]t remains the case that the primary function of a trade mark registered in Pt A or B of the register is that of distinguishing the commercial origin of goods or services sold under the mark. The registered mark serves to indicate, if not the actual origin of goods or services, nor their quality as such, the origin of that quality in a particular business, whether known or unknown by name.
Under the Trade Marks Act 1995 (Cth) there is, of course, only one register.
42 Subject to two matters (discussed below) the evidence set out above establishes Nokia's claim of infringement as particularised in paragraph 4 of Nokia's second amended statement of claim. Subject to these matters, there can be no doubt that the respondent has infringed the Nokia trade marks.
43 In denying infringement on Mr Mai's part, counsel for Mr Mai relied on s 122(1)(c) of the Trade Marks Act 1995 (Cth). This provision reads as follows:
In spite of section 120, a person does not infringe a registered trade mark when:
…
(c) the person uses the trade mark in good faith to indicate the intended purpose of goods (in particular as accessories or spare parts) or services … .
44 On the hearing of Nokia's application, counsel for Mr Mai said:
In my submission … if there is in fact a market for accessories for goods such that people who see these products assume them to be suitable for use with a particular product, for instance a Nokia 8210 model mobile telephone, there is no infringement. The question is whether the use of the trade mark is intended to indicate that this is an accessory made or endorsed by Nokia or whether it is an accessory that can be used with Nokia and is made for that purpose. (Transcript 30)
45 In support of this submission, Mr Mai's counsel relied on the affidavit of Ms Hay (and an accompanying exhibit). He submitted:
One thing is evident from Ms Hay's affidavit, or from the product exhibited there: Nokia's products are very obvious to the consumer. They are packaged as Nokia's products. These [i.e., Mr Mai's goods] are simply accessories put in cheap cellophane to be sold as accessories to what is described as the after-market, to use the term of Mr Mai. They bear the name "Nokia" the trade mark, but there is nothing on the goods or the packaging to indicate that they are products manufactured or endorsed by Nokia. They are accessories that match Nokia products. … [I]t has not been contested that these products are not genuine Nokia products manufactured by Nokia. That's never been contested. (Transcript 33)
46 Section 122(1)(c) of the Trade Marks Act 1995 (Cth) provides a defence to an alleged infringement under s 120. The object of the defence is, according to Lahore, "to enable parties (other than the plaintiff) who are engaged in the manufacture or supply of parts or accessories intended for use in or with the plaintiff's goods (in respect of which the mark is registered), to make a fair reference to the registered trade mark in circumstances which do not create a mistaken or misleading impression": see James Lahore, Patents, Trade Marks and Related Rights (Butterworths, Australia, 2001), at [58, 165].
47 In order for the defence to apply, the use of the registered trade mark must be in good faith and the mark must indicate the intended purpose of the goods or services (e.g., that the accessories are adapted for use with the plaintiff's goods). In Johnson & Johnson, Gummow J (with whom Lockhart J agreed) applied Angove's Pty Ltd v Johnson (1982) 66 FLR 216, at 248 in holding that a use will be in good faith if made "honestly and with no ulterior motive": see Johnson & Johnson, at 18 per Lockhart J and 30-33 per Gummow J. Whether there has been a good faith use of the Nokia trade marks so as to indicate that Mr Mai's accessories are adapted for use with Nokia's goods must be determined by having regard to all the circumstances of the case, including the packaging and degree of prominence given to the registered trade mark on Mr Mai's goods: compare Masson Seeley and Co Ld v Hill Bros (Service) Ld (1940) 57 RPC 128, at 134-5. The authorities established that it will be difficult to make out the defence in the absence of words such as "suitable for use with" or "suitable in": see Minimax Ld v Moffat (1935) 52 RPC 340 ("Minimax"), at 344; G H Gledhill and Sons Ld v British Perforated Toilet Paper Company (1911) 28 RPC 429 ("Gledhill"), at 449; Neostyle Manufacturing Company Ld v Ellam's Duplicator Company (1904) 21 RPC 185 ("Neostyle"), at 192-193; Kodak Ld v London Stereoscopic and Photographic Co Ld (1903) 20 RPC 337, at 348; Interlego AG & Anor v Croner Trading Pty Limited (1992) 39 FCR 348, at 392 per Gummow J and 400 per Lockhart J; and Gillette Company & Anor v Pharma-Goods Australia Pty Ltd & Anor (1997) 38 IPR 509 per Burchett J.
48 In Minimax, the plaintiffs manufactured and sold fire extinguishers under their registered trade mark, "Minimax". The defendants made refills for the plaintiff's fire extinguishers and sold them under the descriptions "Minimax Refills" and "Minimax Fire Extinguisher Refills". In an action for trade mark infringement, the defendant pleaded, in defence, that the word "Minimax" was not intended to be used as a trade mark but "to inform the public … that certain goods sold by [it] are suitable for use as refills for fire extinguishers sold under the name 'Minimax'". The defence failed. Eve J held, at 343:
[I]n my opinion there has been a dishonest failing in the way in which the Defendants have dealt with goods which belonged to the Plaintiff. I regret that they have come here and, up to a certain point, sought to establish that what they have done was not what they ultimately had to admit themselves, quite wrong and improper.
His Honour enjoined the defendants "from supplying in response to orders for 'Minimax Refills' refills not the Plaintiffs' manufacture or merchandise without clearly indicating that the refills supplied are not of the Plaintiffs' manufacture or merchandise …": see Minimax, at 344.
49 In Gledhill, the plaintiffs, who were the owners of an invention for a cash-till supplied coils or rolls of paper for the use of the till under the names "Gledhill Coils", "Gledhill's Coils" or " Gledhill Papers". The plaintiffs failed, in a passing off action, to restrain the defendant's use of "Gledhill's Coils" and "Gledhill's Papers" in a statement that the defendant's coils and papers were suitable for the "Gledhill" cash-till. At 449, Eve J said:
The till had become known as a "Gledhill till", and the ordinary tradesman using such a till would naturally look out for a refill for Gledhill's till. It seems to me that the Defendants, embarking on the business of supplying these rolls for use in that particular till, were entitled, in advertising and pushing those goods, to bring into prominence the fact that the goods were intended and adapted for use in this till. Of course, they were not entitled to do anything which went to show that these were coils manufactured by Mr Gledhill or his successors.
50 In Neostyle Manufacturing, the plaintiff failed, in action for passing off, to restrain the defendant from selling ink described as ink "for the Neostyle". Byrne J said, at 193:
I am clearly of opinion that the Defendants and other manufacturers may sell ink and paper for use on the "Neostyle" machine, and to do it they must say so, but of course they must not by words or get-up represent their goods as Plaintiff's goods. I cannot say that the Defendants have done this. Their get-up is wholly different, though the tins are the same shape and size.
51 Having regard to the matters put before me, Mr Mai has not established an arguable defence arising from s 122(1)(c). According to a certificate of trade mark registration No 867057, the word "Nokia" is registered for:
batteries … housings, or casings or covers, clips, carrying cases for communications apparatus and its accessories; holders, … all for use with communications apparatus; … accessories and spare parts of all aforesaid goods; all included in class 9 being goods in class 9.
In particular, I note that the mark "Nokia" is registered in respect of batteries, casings, covers, clips, and carrying cases for communications apparatus and its accessories.
52 I reject the submission made by counsel for Mr Mai concerning the existence of an "after-market" accessories market. The evidence shows that Mr Mai offered for sale and sold (or otherwise commercially dealt with) goods prominently bearing the Nokia trade marks. The use was "as a trade mark", since it gave the misleading impression that the mark "Nokia" was "a badge of origin of the goods indicating a connection in the course of trade between the goods and the person who applie[d] it to the goods": Johnson & Johnson, at 10 per Lockhart J and 24 per Gummow J. As counsel for Nokia noted, Mr Taylor's evidence was that, when he purchased a battery with "Nokia" on it at the Sunshine premises he was told by the shop attendant that the battery was "genuine". I reject Mr Mai's submission that the words "for nokia" on some goods conveyed a different impression. In particular, I reject his submission that they conveyed only the impression that the goods were "for use with a Nokia phone". In order to convey just this, more specific language would be needed, as for example, "suitable for Nokia" mobile phones. I do not accept, as counsel for Mr Mai submitted, that the differences in packaging between Mr Mai's goods and those ordinarily used for Nokia's goods were sufficient indication that Mr Mai's goods were merely adapted for use in connection with Nokia products. Finally, I am not persuaded that merely because Mr Mai's goods bear some manufacturing details, the misapprehension flowing from the use of the Nokia trade mark is removed. On the contrary, Mr Mai has not shown that the use of the Nokia trade marks on his goods indicated that, whilst not "Nokia" products, the items were adapted for use with Nokia products. There is, therefore, no tenable basis for a defence based on s 122 (1)(c) of the Trade Marks Act 1995 (Cth).
53 At the hearing of Nokia's motion, a question arose as to whether Nokia had made out its case of infringement in respect of the goods that had been forfeited by Mr Mai. Part 13 of the Trade Marks Act 1995 (Cth) relates to the "importation of goods infringing Australian trade marks". Section 131 of the Act states that:
The object of this Part is to protect registered trade marks by making provision allowing the Customs CEO to seize and deal with goods that are imported into Australia if the importation infringes, or appears to infringe, a registered trade mark.
Section 133 provides for the seizure of goods by the "Customs CEO". The provision reads:
(1) This section applies to goods manufactured outside Australia that:
(a) are imported into Australia; and
(b) are subject to the control of the Customs within the meaning of the Customs Act 1901.
(2) If goods to which this section applies:
(a) have applied to them or in relation to them a sign that, in the opinion of the Customs CEO, is substantially identical with, or deceptively similar to, a notified trade mark; and
(b) are goods in respect of which the notified trade mark is registered
the Customs CEO must seize the goods unless he or she is satisfied that there are no reasonable grounds for believing that the notified trade mark is infringed by the importation of the goods.
54 In Sony Computer Entertainment Australia Pty Ltd v Saleh [2001] FCA 717 ("Sony"), Lindgren J referred to these provisions, saying at [39]:
The above provisions contemplate that an importation may, but will not necessarily, constitute an infringement. They do not expressly make importation an element on any particular form of infringement (cf s 37 and s 38 of the Copyright Act 1968 (Cth)). Statements can be found, however, which might be thought to support the general proposition that all importations are infringements: Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670 per Aickin J at 688; cf Lahore, Patents, Trade Marks and Related Rights (Butterworths, looseleaf at [56, 120]). In my opinion, whether importation in a particular case constitutes an infringement depends on whether, in all the circumstances of the case, the importation satisfies the terms of subs 120(1) of the Act.
55 The evidence of Mr Mai makes it clear that he was importing the goods, which he subsequently forfeited, in the course of his business activities, with the intention of selling them or otherwise dealing with them commercially. When he went to the airport to collect them, he was acting in the course of his business. The goods bore the Nokia trade marks. As Nokia's counsel submitted, it is quite implausible that, at the time he bought the goods, Mr Mai did not know that he was buying goods that bore the Nokia trade marks.
56 The circumstances of this case are relevantly indistinguishable from those considered by Lindgren J in Sony. In his dealings with the goods that were subsequently forfeited, Mr Mai has infringed s 120 of the Trade Marks Act 1995 (Cth).
57 As already noted, in his affidavit of 20 August 2003, Mr Mai admitted breaches of the deed of undertaking. His counsel submitted that Mr Mai had been "intimidated" or "scared" by the conduct of Nokia's solicitors and that he "did not fully understand what he'd done and the nature of the undertaking" (transcript 7). There was little, if any, evidence to support this submission. Mr Mai has not shown that, in the circumstances of this case, he has an arguable defence on this aspect of Nokia's claim.
58 Although the power to order summary judgment "should be exercised with great care", summary judgment should be granted in this case, because it is clear that there is no real question to be tried: Fancourt & Anor v Mercantile Credits Limited (1983) 154 CLR 87, at 99. It follows that Nokia is entitled to summary judgment in the terms that it seeks, including an order for damages to be assessed or on account of profits to be made at its option: see Trade Marks Act 1995 (Cth), s 126 and Dr Martens Australia Pty Ltd& Ors v Bata Shoe Company of Australia Pty Ltd & Ors [1997] FCA 505 per Goldberg J.
the respondent's motion
59 I have not yet formally considered the respondent's motion. I have, however, set out above the circumstances that led Nokia's solicitors, mistakenly, to believe that Truyen Mai and Jimmy Mai were separate individuals. As already noted, it was, in my view, reasonable in the circumstances for Nokia's solicitors to seek some photographic verification that Truyen Mai and Jimmy Mai were one and the same. If this notification had been given in a timely way (or before Mr Mai's motion was filed) Nokia could have taken steps to amend its pleadings. As it was, Nokia was not given the photographic verification it sought until after Mr Mai's motion had issued. Mr Mai's solicitors did not give any prior warning of this motion to Nokia's solicitors. The motion was, in the circumstances, premature and unnecessary. Some time was spent at the hearing on matters related to it (principally costs). In any case, I would not make the orders sought by Mr Mai upon his motion. It appears to me that the better course is, in the circumstances, to give Nokia leave to amend its pleadings and its notice of motion. In affording the relief Nokia now seeks, the Court gives relief against Truyen Mai alone.
costs
60 Subsection 43(2) of the Federal Court of Australia Act 1976 (Cth) vests the award of costs "in the discretion of the Court or Judge". Costs ordinarily follow the event. Nokia has succeeded in obtaining summary judgment. Although Mr Mai consented to part of the relief Nokia sought against him, he opposed the balance upon the basis that there had been no trade mark infringement. As a result Nokia was put to its proofs as if all of its application for summary judgment was contested. In the circumstances, it seems to me that Nokia should have the costs of the proceeding (including the costs of its own motion).
61 Nokia made an application for indemnity costs against Mr Mai in respect of his motion. In Colgate-Palmolive Company& Anor v Cussons Pty Limited (1993) 46 FCR 225 ("Colgate-Palmolive"), at 232-4, Sheppard J set out some relevant principles concerning indemnity costs. As his Honour noted, costs ordinarily follow the event and are awarded on a party-party basis unless there are particular or special circumstances which warrant the Court departing from this practice and making some other order: see Colgate-Palmolive, at 232-3; Re Wilcox; ex parte Venture Industries Pty Ltd & Ors (No 2) (1996) 72 FCR 151, at 152-3 per Black CJ and 156-8 per Cooper and Merkel JJ; Ruddock & Ors v Vadarlis & Ors (2002) 115 FCR 229, at 234-235 per Black CJ and French J; and John S Hayes & Associates Pty Limited v Kimberly-Clark Australia Pty Limited (1994) 52 FCR 201, at 203.
62 In Colgate-Palmolive, at 233, Sheppard J set out some of the circumstances in which courts have ordered that costs be paid on an indemnity basis. His Honour's examples included the fact that the proceeding was commenced or continued in wilful disregard of known facts or clearly established law, the making of allegations which ought never to have been made, the undue prolongation of a case by groundless contentions and an imprudent refusal of an offer of compromise. Of course, the identification of these circumstances, although helpful, is not definitive. Where an application for indemnity costs is made, the question is, in each case, whether the particular facts and circumstances before the Court warrant the making of an order for the payment of costs other than on the usual party-party basis.
63 In the present case, as I have said, the respondent's motion was filed in circumstances where the respondent should have known that, if he provided proper verification of his identity, it was likely that Nokia would take appropriate steps to amend its pleadings. There was no need for the respondent to proceed in the manner he did. In accordance with the principles set out above, it seems to me that, in the circumstances of the case, Nokia is entitled to an award of costs on an indemnity basis on Mr Mai's motion.
64 For the reasons stated, orders will be made substantially in the terms sought by Nokia at the hearing.
I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.