NPP Australia Limited v Ripple Labs, Inc

1. INTRODUCTION 1 On 20 August 2020 the applicant, NPP Australia Limited (NPPA), applied ex parte for urgent orders, amongst other things, seeking: short service of originating process and affidavits, service out of the jurisdiction and substituted service orders upon the respondent, Ripple Labs Inc. It supported its application with an affidavit sworn by Adrian Lovney, the Chief Executive Officer of NPPA, dated 19 August 2020 and an affidavit from NPPA's solicitor, John Collins, a partner at Clayton Utz dated 20 August 2020. After hearing the application I made the orders annexed to these reasons and indicated that I would provide a brief judgment today.

2. BACKGROUND 2 The evidence of Mr Lovney supports the concise statement and indicates that NPPA is a joint venture public company mutually owned by the Reserve Bank of Australia and 12 authorised deposit-taking institutions (ADls): ANZ Bank, ASL, Bendigo & Adelaide Bank, Commonwealth Bank, Citibank, Cuscal HSBC, Indue, ING Bank, Macquarie Bank, NAB and Westpac. NPPA was incorporated in 2014 as a vehicle for the development and operation of the New Payments Platform (NPP), a new national payments infrastructure for Australia. 3 The NPP infrastructure enables customers of different financial institutions in Australia to make and receive essentially real-time payments, 24 hours a day, 7 days a week. With the NPP, real-time payments can be directed to either a BSB and account number or via an addressing service to an account proxy/alias, which can be something easy to remember. There are currently four types of account proxies available: phone number, email address, an Australian Business Number (ABN) or an Organisation Identifier. 4 PayID is the brand, name and trade mark used by NPPA to identify both the NPP's Addressing Service and the account proxies/aliases that form part of the Addressing Service. 5 Customers can create their own PayID with their financial institution as an address or identifier for NPP payments and have that PayID linked to a specific bank account. Payments directed to that Pay ID are then routed to that linked account. Every PayID is verified and registered by the relevant financial institution, such that only one PayID can be linked to one bank account at any given time. Accordingly, there is a 1:1 mapping between the payee's PayID and their BSB and account number. 6 Mr Lovney gives evidence that NPPA developed PayID Brand Standards, NPP Regulations and an Addressing Service Protocol to licence and govern the authorised use of PayID and the NPP. NPPA is the registered owner of the PayID Registered Trade Mark: 7 The priority date for the PayID Registered Trade Mark is 8 March 2017. It is registered in respect of services in class 36 of the trade marks register, being electronic payment services; financial database services. 8 Mr Lovney gives evidence that the NPP and PayID brand were launched to the Australian public on 13 February 2018 and that an AU $3.3 million advertising campaign accompanied it. NPPA has promoted and endeavoured to establish a reputation both domestically and internationally in the PayID brand via, amongst other things, promotional activity on the NPPA website (https://nppa.com.au) and PayID website (www.payid.com.au), as well as via participating financial institutions and presentations at a premier global financial services conference known as Sibos in 2018, held in Sydney, where there were over 7,500 delegates. 9 Furthermore Mr Lovney gives evidence that as at August 2020 there are over 90 participating financial institutions supporting the NPP-enabled payments. He gives evidence of there being five million PayIDs that have been registered by Australian consumers, government agencies and businesses with their Australian ADIs, which are held as records in the NPPA's PayID Addressing Service. As of the week commencing 3 August 2020, just under 10 per cent of payments made on the NPP are made using PayID, which amounts to more than 1 million payments per week using PayID. In the wake of the COVID-19 pandemic the use of the NPP has been growing rapidly. 10 Mr Lovney also gives evidence about the activities of Ripple. Ripple is a US-based technology company which has created the Ripple payment protocol and exchange network. Ripple was founded in 2012 and is based in San Francisco, California, with 9 global offices. Mr Lovney refers to the Wikipedia page for the Ripple payment protocol as at 12 August 2020 which: states that the Ripple payment protocol is a real-time gross settlement system, currency exchange and remittance network built on a distributed open source protocol; states what currency it supports, namely tokens representing fiat currency (which is currency issued by the central bank), cryptocurrency, commodities or other units of value; and explains how it works, that is, via a common shared ledger employing a native cryptocurrency known as XRP. It is managed by a network of servers that could belong to anyone and payments are irreversible. 11 On 19 June 2020, Mr Lovney became aware of the launch by Ripple of a PaylD branded service with 40 partners, forming what is referred to as the Open Payments Coalition (OPC). He was notified of this by an email received early in the morning from NPPA's General Counsel that attached an article from the Fortune magazine which refers to Ripple's PayID branded service. Mr Lovney gives evidence of correspondence that followed the receipt of that email. 12 He gives evidence also of Australian companies who have formed part of the OPC who have collaborated with Ripple in the supply of its services and who appear to have assumed, incorrectly, that the Ripple PayID service is affiliated with that supplied by NPPA. 13 Mr Collins gives evidence of conducting inquiries into Ripple's conduct, and annexes information made available on a website apparently operated by Ripple at https://payid.org/. He identifies various usages by it of the word PAYID, apparently as a trade mark or sign, in relation to an electronic payment service which is similar to that offered by NPPA, and which is apparently supplied by or affiliated with services offered by Ripple. Mr Collins gives evidence in the following terms: [24] As a result of these inquiries and based upon over thirty years' experience in conducting intellectual property litigation, I am of the view that Ripple has taken steps to launch and has launched an electronic payment service under and by reference to the trade mark "PayID" and is using the trade mark "PayID" as a badge of origin, to distinguish its "PayID" branded electronic payment services from the electronic payment services from those of other traders. [25] I am further of the view that Ripple has used the "PayID" trade mark in Australia, because of its partnership with three Australian companies who are members of the OPC and who in turn have advertised and promoted the Ripple Pay ID-branded service to their Australian customers. These companies are FlashFX, BTC Markets and Independent Reserve (Ripple's Australian OPC Partners). It is clear to me that Ripple is targeting Australian consumers, including by partnering with three Australian companies in order to advertise, promote and offer electronic payment services offered by Ripple under the mark "PayID". For the reasons set out below, I am of the view that there is evidence that each of these companies incorrectly believed there was an association between services offered by the NPPA under the PayID trade mark and those offered by Ripple in using the PayID trade mark, when there is no such association. Mr Lovney annexes company searches for each of Ripple's Australian OPC Partners, each of which evidences that they are Australian companies. I set out details of correspondence sent by Clayton Utz to each of Ripple's Australian OPC Partners below. [26] On 3 August 2020, Ms Chapman instructed me to write to each of Ripple's Australian OPC partners, FlashFX, BTC Markets and Independent Reserve, to ensure their awareness of NPPA's rights and reputation in the PayID brand and PayID Registered Trade Mark. 14 In its concise statement NPPA claims the following relief against Ripple: [22] NPPA's primary legal claims against Ripple in the Originating Application are for: (a) infringement pursuant to subs 120(1) and/or (2) of the Trade Marks Act 1995 (Cth); and (b) contraventions of ss 18 and 29(1)(g) and (h) of the Australian Consumer Law; and/or (c) contraventions of ss 12DA and 12D8(1)(e) and 12D8(1)(f) of the Australian Securities and Investments Commission Act 2001 (Cth); and (d) passing off; and (e) associated claims for aiding and abetting the allegedly infringing conduct; and (f) associated declarations and injunctions and also damages or an account of profits.

3. SERVCE OUTSIDE THE JURISDICTION 15 NPPA seeks orders under rules 10.42 and 10.43(2) of the Federal Court Rules 2011 (Cth) (FCR) granting it leave to serve documents being the originating application, the concise statement, a Genuine Steps statement and the affidavits of Mr Lovney and Mr Collins (Douments) on Ripple in accordance with article 5 of the Convention on the Service Abroad of Judicial and Extrajudicial documents in Civil or Commercial Matters done at the Hague on 15 November 1965 (Hague Convention). 16 FCR 10.42 provides that, subject to FCR 10.43, an originating application may be served on a person in a foreign country in a proceeding that consists of, or includes, any one or more of the kinds of proceeding mentioned in the table in the rule. The concise statement identifies proceedings based on causes of actions identified in at least items 1, 12 and 13 of the table referred to in FCR 10.42. 17 FCR 10.43(2) provides: A party may apply to the Court for leave to serve an originating application on a person in a foreign country in accordance with a convention, the Hague Convention or the law of the foreign country. 18 FCR 10.43(3) provides: The application under subrule (2) must be accompanied by an affidavit stating: (a) the name of the foreign country where the person to be served is or is likely to be; and (b) the proposed method of service; and (c) that the proposed method of service is permitted by: (i) if a convention applies - the convention; or (ii) if the Hague Convention applies - the Hague Convention; or (iii) in any other case - the law of the foreign country. 19 FCR 10.43(4) provides that, for FCR 10.43(2), the party must satisfy the Court of three matters, namely that: (1) the Court has jurisdiction in the proceeding; (2) the proceeding is of a kind mentioned in r 10.42; (3) the party has a prima facie case for all or any of the relief claimed in the proceeding. 20 FCR 10.44 provides for the same requirements in relation to an application by a party for leave to serve a document filed in or issued by the Court other than an originating application.

3.1 Compliance with FCR 10.43(3) 21 The affidavit of Mr Collins: (a) Annexes a United States Securities and Exchange Commission Report for Ripple which states that its business and mailing address is 300 Montgomery St, San Fancisco in the USA; and (b) Annexes a printout of the Hague Convention website page relating to the USA indicating that service may be effected in the US in accordance with article 5. 22 Mr Collins describes that the proposed method of service on Ripple is intended to be as follows: (a) applying to the Registrar in the Registrar's capacity as a forwarding authority under the Hague Convention, for a request for service in the USA under the Hague Convention of the Documents upon Ripple, pursuant to FCR 10.64; (b) providing to the Registrar three copies of each of the following documents: (i) a draft request for service abroad of judicial documents and certificate, in accordance with Form 25, being the form of model letter of request and certificate of service prescribed by the Court; (ii) the Originating Application; (iii) a summary of the documents to be served, in accordance with Form 26; (iv) a written solicitor's undertaking to be personally liable for all costs incurred by the Registrar, in accordance with FCR 10.64(3); (c) the Registrar, if satisfied, signing the requests for service abroad and forwarding copies of the relevant documents to ABC Legal Service, contractor for the US Department of Justice, Civil Division, Office of International Judicial Assistance, for service upon Ripple in accordance with the Hague Convention, pursuant to FCR 10.65; (d) ABC Legal serving the documents by way of formal service, in accordance with the provisions of subparagraph (a) of the first paragraph of art 5 of the Hague Convention, as prescribed by the USA's internal law for the service of documents in domestic actions upon persons who are within the territory. Mr Collins' affidavit annexes a printout from the Hague Convention where it describes, in relation to formal service in respect of art 5(1)(a) that "[p]ersonal service is the method used by ABC Legal Services (ABC Legal) in executing all requests". (e) upon ABC Legal having effected service upon Ripple, ABC Legal providing to the Registrar a Certificate of Service in respect of Ripple, for filing in the proceedings pursuant to FCR 10.66. 23 In addition, Mr Collins' affidavit states as follows: [50] Annexed and marked Annexure JFHC-26 is a copy of the document obtained from the ABC Legal website headed "International service of process made easy". This includes a current alert on that page which relevantly states "Due to Covid-19, services of judicial and extrajudicial documents transmitted pursuant to the Hague Service Convention ... may be delayed or suspended in certain states". [51] The Federal Court of Australia's Overseas Service and Evidence Practice Note (GPN-OSE) issued on 25 October 2016 (Practice Note) requires a party applying for leave to serve a document in a country other than Australia to include in its application information obtained from the Australian Government Attorney-General's Department in relation to the appropriate method of transmitting documents for service in that country. Annexed to this affidavit and marked Annexure JFHC-27 is a copy of the document "Service of Australian civil legal documents overseas (outgoing requests)" dated November 2018. [52] I believe that the methods of service identified above are in accordance with the requirements of the Hague Convention. 24 The proposed methods of service described by Mr Collins are in accordance with the requirements of the Hague Convention and in accordance with FCR 10.43(3).

3.2 Compliance with FCR 10.43(4) 25 The proceedings identified in the concise statement are matters within the original jurisdiction of the Court within s 39B(1A) of the Judiciary Act 1903 (Cth). Accordingly, the requirement of FCR 10.43(4)(a) that this Court has jurisdiction in the proceeding is satisfied. The requirement in FCR 10.43(4)(b) that the proceedings be of a kind mentioned in 10.42 is satisfied, as I have noted above. 26 The requirement in FCR 10.43(4)(c) is that NPPA has a prima facie case for all or any of the relief claimed in the proceeding. In Australian Information Commission v Facebook Inc [2020] FCA 531 Thawley J summarised the relevant principles at [30]: [30] The requirement to demonstrate a prima facie case in the context of an application for leave to serve documents outside Australia is "not particularly onerous": Yellow Page Marketing at [25]. It is relevant to assess whether sufficient material is placed before the Court to show: (1) that findings of fact are available, and inferences are open to be drawn, which would support the relief claimed: Australian Securities and Investment Commission v Axis International Management Pty Ltd [2008] FCA 1605 at [14] (Gilmour J), citing Bell Group Ltd (In Liq) v Westpac Banking Corporation (1996) 20 ACSR 760 at 763; (2) the existence of a controversy that warrants causing a proposed respondent to be involved in litigation in Australia: Century Insurance (in provisional liquidation) v New Zealand Guardian Trust [1996] FCA 376 (Lee J); Ho v Akai Pty Ltd (in liq) [2006] FCAFC 159; (2006) 247 FCR 205 at [10] (Finn, Weinberg and Rares JJ); Israel Discount Bank Limited v ACN 078 272 867 Pty Ltd (in liq) (formerly Advance Finances Pty Ltd) (2019) 367 ALR 71 at [47] (Yates, Beach and Moshinsky JJ). 27 It is not appropriate at this stage of the proceeding to address this question in detail. Suffice it to say that, having regard to the evidence of Mr Lovney and Mr Collins, I consider that NPPA has established a prima facie case that the conduct of Ripple is in breach of s 120 of the Trade Marks Act 1995 (Cth) and/or s 18 of the Australian Consumer Law, which is schedule 2 to the Competition and Consumer Act 2010 (Cth). That case arises from material that is capable of supporting the conclusion that Ripple has used and authorised others to use the PayID word as a trade mark in Australia in connection with the supply of electronic payment services in circumstances where it was not authorised to do so by NPPA. In making this finding I say nothing about the strength of the case. Rather, in my view the material demonstrates a genuine argument about contravention which is sufficient to justify causing Ripple to be subject to the litigation in Australia, where the merit of that argument can be judicially determined. 28 The Court retains a residual discretion to refuse relief even where the requirements for service outside Australia are satisfied: Humane Society International Inc v Kyodo Senpakuy Kaisha Ltd [2006] FCAFC 116; 154 FCR 425 at [3]. However, I am not satisfied that it is appropriate to exercise that discretion. 29 In this regard, Mr Collins' affidavit annexes correspondence between solicitors representing NPPA and lawyers representing Ripple since 23 June 2020 that makes plain that Ripple has been aware of the concerns of NPPA in relation to its conduct for some time. On 31 July 2020 Clayton Utz received a response from Mr Tom Hadid of Kilpatrick Townsend & Stockton LLP in which Ripple declined to offer undertakings sought by NPPA. 30 In that response Mr Hadid informed Clayton Utz, presumably on instructions, that it was not necessary to copy Ripple directly on correspondence and was asked to direct future correspondence to Mr Hadid. 31 The evidence indicates that Ripple is a very substantial commercial organisation engaged in a sophisticated global payments system and operating its PayID service with 40 global partners. Public reports indicate that Ripple may be valued at something in the order of US $10 billion. I do not consider that the inconvenience to which it would be put, if brought into courts of this jurisdiction, is disproportionate or inappropriate: cf Agar v Hyde [2000] HCA 41 at [42]; 201 CLR 552 at 571. 32 Accordingly, I have made orders granting leave to NPPA to serve Ripple outside Australia.

4. SUBSTITUTED AND SHORT SERVICE 33 NPPA also seeks substituted service of documents on Ripple by supplying them by email to the address of Mr Hadid from Kilpatrick Townsend & Stockton LLP, pursuant to FCR 10.24. Additionally, it seeks an order pursuant to FCR 1.39 abridging the time for service of the originating application and concise statement. 34 FCR 10.24(a) provides that "If it is not practicable to serve a document on a person in a way required by these Rules, a party may apply to the Court without notice for an order: (a) substituting another method of service …" (emphasis added). 35 FCR 10.45 provides: The other provisions of Part 10 apply to service of a document on a person in a foreign country in the same way as they apply to service on a person in Australia, to the extent that they are: (a) relevant and consistent with this Division; and (b) consistent with: (i) if a convention applies - the convention; or (ii) if the Hague Convention applies - the Hague Convention; or (iii) in any other case - the law of the foreign country. 36 In Facebook at [65] to [70] Thawley J helpfully sets out the factors relevant to the application of the rules concerning substituted service in very similar circumstances to the present. I do not repeat them here. In the present circumstances I make the following points: (1) By reason of FCR 10.45, FCR 10.24 applies to service on Ripple provided that the service is regarded as consistent with Part 10 and in particular Div 10.4 and with the Hague Convention or foreign law; (2) FCR 10.24 provides that a person may apply for an order for substituted service if it is not practicable to serve a document on a person in a way required by the FCRs; (3) The global COVID-19 pandemic, of which I takes judicial notice, directly affects the USA. In this context, which informs the question of what type of service is "practicable", it is to be noted that an extract from ABC Legal's website indicates that "Due to Covid-19, services of judicial and extrajudicial documents transmitted pursuant to the Hague Service Convention ... may be delayed or suspended in certain states". The notice does not identify what states in respect of which service has been suspended or delayed, when there may be a delay and when there may be a suspension. No doubt that is because of the evolving situation that applies in respect of the spread of the virus and the effect that it has on the operations of businesses. (4) The proposed method of service on Ripple is to email the Documents to Mr Hadid. Mr Hadid has explicitly asked, on behalf of his client, that all correspondence be directed to him, and has engaged in correspondence on behalf of Ripple since June 2020. Substituted service is very likely to bring the documents to Ripple's attention. Indeed I consider it inevitable. (5) NPPA seeks urgent interlocutory relief in this application. It considers that there is a risk that Australian consumers may now be registering for PayIDs using the Ripple service and possibly paying money to unverified parties using PayIDs that are not part of the NPPA service. Mr Collins gives evidence that Ripple is expanding the reach of its PayID product. Articles in the press to which he refers indicate that Ripple has signed partnership deals with American Express and Santander and that last June it announced a partnership with MoneyGram, said to be one of the world's largest money-transfer companies. Having regard to the evidence of potential harm to NPPA I am satisfied that there is sufficient urgency to warrant substituted service and the abbreviated service sought. (6) Having regard to the public statements by ABC Legal as to delays or the suspension of service due to the COVID-19 pandemic, I am satisfied that whilst it may be possible to serve Ripple in accordance with the requirements of the Hague Convention, it is not practicable to do so in the evolving environment of the current pandemic. The proposed method of substituted service is likely to bring the proceeding to the prompt attention of Ripple, indeed, it appears to be its preferred method of service. 37 Accordingly, for the reasons I have set out above, I made the orders set out in the annexure to these reasons. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley.

1. Pursuant to r 10.42 and r 10.43 of the Federal Court Rules 2011 (Cth) (FC Rules), the Applicant be granted leave to serve: (a) the Applicant's Originating Application and Concise Statement dated 20 August 2020; (b) the Applicant's Genuine Steps Statement dated 20 August 2020; (c) the affidavit of John Frederick Howard Collins sworn 20 August 2020; (d) the affidavit of Adrian Lovney affirmed 19 August 2020 (including a link from which copies of the files contained on Exhibit AL-1 may be downloaded) but excluding Confidential Exhibit AL-2; and (e) these Orders, (together, the Documents) on the Respondent in the United States of America, in accordance with art 5 of the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, done at the Hague on 15 November 1965.
2. Pursuant to r 10.24 of the FC Rules, service on the Respondent be effected by sending a copy of the Documents to the Respondent's attorney, Mr Thomas M. Hadid of Kilpatrick Townsend Attorneys at Law, Los Angeles, United States of America via electronic mail message to Mr Hadid at the email address THadid@kilpatricktownsend.com
3. Pursuant to r 1.39 of the FC Rules, the time for service of the Originating Application and Concise Statement as required under r 8.06 of the FC Rules be abridged to 8pm Australian Eastern Standard Time on 20 August 2020.
4. On or before 8pm Australian Eastern Standard Time on 20 August 2020, the Applicant is to serve copies of each of the Documents on the Respondent's attorney, Mr Thomas M. Hadid of Kilpatrick Townsend Attorneys at Law, Los Angeles, United States of America via electronic mail message to Mr Hadid at the email address THadid@kilpatricktownsend.com.
5. The Respondent is to file a notice of address for service in accordance with r 5.02 of the FC Rules within 5 business days after service upon it of the Documents
6. Pursuant to s 37AI of the Federal Court of Australia Act 1976 (Cth), on the ground set out in s 37AG(1)(a), until further order of the Court, in order to prevent prejudice to the proper administration of justice, the information in Confidential Exhibit AL-2 to the affidavit of Adrian Lovney affirmed 19 August 2020 is to be treated as confidential and not published or made available, and not be disclosed to any person or entity other than: (a) the Court for the purposes of these proceedings; (b) the external legal representatives of the Respondent who have first signed a confidentiality undertaking in a form acceptable to the Applicant.
7. The matter be listed for a case management hearing of the Applicant's interlocutory application at 9.30am on 26 August 2020.
8. The costs of today's court appearance are reserved.