7 Johnstone, as the principal of Franchise China, stood by, after notice, and permitted the applicant to obtain this judgment in default against his company. The container in which the sunglasses were found was consigned to the company at the Eagle Farm address from which it and Johnstone and also Rumpf carried on business. The evidence shows that Franchise China, at all material times, carried on the business of importing goods from China for sale here. Johnstone's claim in evidence at trial that these sunglasses "are all my property and imported by me or on my behalf" might be thought to be inconsistent with the judgment against the company. But in view of Johnstone's insistence on claiming responsibility for this importation and the applicant's willingness to accept that, I propose to proceed on the basis that Johnstone bears the responsibility he embraces either because the sunglasses were in law his own property or, in a loose sense, they were his property because they were the property of the company of which he is the sole shareholder and for which he arranged their importation in his capacity as director.
8 For the reasons I have given, Johnstone has infringed s 120(1) the Trade Marks Act 1995 (Cth) by using "as trade marks" marks upon sunglasses dealt with in the course of trade that are identical or substantially identical with two of the Oakley registered marks. This is so whether the sunglasses were Johnstone's personal property or the property of his company.
9 Johnstone's defence is that, at the market stand from which he sells these falsely marked sunglasses, he always displays a sign alerting potential purchasers to the fact that they are not genuine Oakley sunglasses. The evidence on this point is confined to a brief statement by Johnstone in his affidavit and to brief comments in his oral evidence given at the end of the trial where he described the sign as saying "These excellent sunnies are sold as replicas. They're not to be confused with the real item". He said the sign was a big sign and he could not understand why the applicant's witness, Taylor, did not see it. Taylor, of Trade Mark Investigation Services, describes his visit to a stall G082A at the Ascot Street Fair, Racecourse Road, Brisbane around 27 May 2001 at which he saw counterfeit Oakley sunglasses on sale. This is Johnstone's stall. Taylor says that he saw Johnstone (who was known to him) working at it and that he bought a pair of counterfeit Oakley sunglasses there. He paid by credit card; on the credit card receipt the merchant's name was shown as Tipplers Island Resort, at Stradbroke Island. Johnstone says that he had borrowed the credit card machine from the owners of Tipplers who are personal friends. Taylor also says that he followed the van into which the goods displayed at stall G082A were packed away back to Franchise China's premises at Unit 5, 789 Kingsford Smith Drive, Eagle Farm. Taylor does not mention any sign being displayed at that stall that might have alerted potential customers to the fact that the goods being sold were not the genuine article. He was not cross-examined about whether there was such a sign.
10 There will be infringement within s 120(1) the Trade Marks Act where the alleged wrongdoer uses marks that are "substantially identical with, or deceptively similar to" the registered owner's trade mark. An assessment of whether marks are "identical" or "substantially identical" is made having regard to the resemblances between the marks side by side, ignoring matters extraneous to the marks themselves: The Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414; Lahore, Patents, Trade Marks and Related Rights, Vol 1A (at 102-11-02) at [56,130].
11 It is doubtful in infringement proceedings where the question is whether a mark is "deceptively similar" to a registered mark, whether it is relevant to have regard to the fact that the respondent offers the counterfeit articles in circumstances which include statements by the alleged infringer to consumers disclaiming that the marked goods are the genuine article or to the fact that there is a large price differential between the infringing article and the genuine article sufficient, according to the infringer, to prevent confusion: see Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 128 - 129, per Gummow J and Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491 at 497. But it is clear that such a disclaimer or price differential can provide no defence where, as here, the infringing marks are identical or substantially identical to the registered marks.
12 There will therefore be a finding in accordance with that sought by Oakley against Mr Johnstone of trade mark infringement in respect of the 2,917 pairs of sunglasses.
13 The applicant also claims that Johnstone has passed off his sunglasses as the applicant's. The elements required to establish the cause of action are reputation, misrepresentation and damage. See TGI Friday's Australia Pty Ltd v TGI Friday's Inc (1999) 45 IPR 43 at par [25].
14 The evidence establishes that Oakley has a substantial reputation or business goodwill in Australia as a supplier of sunglasses sold in distinctive get-ups here. Oakley has extensively advertised and promoted its sunglasses throughout Australia, including in magazines and at trade shows around Australia and it is involved in well publicised sponsorship arrangements with respect to its sunglasses with various Australian as well as international sporting personalities. There is also evidence of the substantial sales Oakley has enjoyed with its sunglasses range in Australia. Its products have been sold here since at least March 1987, when Sundaze Pty Ltd was one of its two Australian distributors of Oakley products, including eyewear. From April 1992 to November 1999, Sundaze was the exclusive importer and distributor of Oakley products in Australia. That relationship terminated in November 1999 and distributor rights were transferred to Oakley South Pacific Pty Ltd ("Oakley SP"), a wholly owned subsidiary of Oakley. Since then Oakley SP has sold a wide range of Oakley products in Australia including sunglasses. They are all made in the United States and are sold to Oakley SP by Oakley. All Oakley sunglasses, with the exception of the "X Metal Style", bear either or both the Oakley stylised mark or the ellipse mark with which the sunglasses the subject of this action are all marked. These marks are part of the get up in which it sells its sunglasses here that has long been distinctive of Oakley.
15 The applicant must also show that Johnstone misrepresented his goods as the applicant's and that potential customers were thereby likely to have been confused or deceived into thinking that his goods were genuine Oakley sunglasses. See Lahore, at [77,010].
16 As I understand his evidence, Johnstone accepts that his conduct in selling the falsely marked Oakley sunglasses is capable of amounting to misrepresenting them as genuine Oakley sunglasses, but for what he has to say about displaying the sign, and about the price at which he offers them for sale as compared with the price of genuine Oakley sunglasses. He says these two circumstances put potential purchasers on notice that they are not being offered the genuine article. (Even if Johnstone disputed having misrepresented the sunglasses he offered for sale, I would find that his display at his market stand of the sunglasses bearing the false Oakley marks amounted to the necessary misrepresentation.)
17 As Wingate Marketing at 128 shows, the test for passing off is not the same as that for trade mark infringement. A clear enough statement to potential customers that goods marked so as to suggest they are a particular producer's goods are not, in fact, the genuine article may, depending on the circumstances, be sufficient to prevent the representation having the quality of confusion or deception necessary for there to be passing off (or misleading and deceptive conduct within s 52 the Trade Practices Act): see Sony Music Productions Pty Ltd v Tansing (1993) 27 IPR 640. But it is not easy for a trader to defeat a passing off claim where he uses indicia which are distinctive of the plaintiff's goods in conjunction with a disclaimer that there is, in truth, no connection with the plaintiff: see Wadlow, The Law of Passing Off, 2nd ed, 1995 at 4.17 and 6.24.
18 Johnstone's evidence about the disclaiming sign is too sketchy and unconvincing to justify my finding that he acted so as to put potential purchasers on notice that they were not being offered genuine Oakley sunglasses sufficiently clear to avoid confusion or deception.
19 Johnstone also says that the fact that the sunglasses he sells are not genuine Oakley glasses would be self-evident to any purchaser "if one were to compare the selling price of [his] merchandise with that of those purporting to be the genuine article". There is limited evidence before me as to the retail prices of genuine Oakley sunglasses of a similar get-up to those sold by Johnstone. Taylor says that Johnstone offered for sale Oakley branded sunglasses, not further described, at his stall at the Ascot Street Fair around 27 May 2001; Taylor says he paid Johnstone $40 for the one pair of sunglasses he then bought that resembled the Oakley "Straight Jacket" style of sunglasses. This he says was 42% of the wholesale price of the genuine Oakley product. Johnstone did not attempt to show by evidence the prices at which genuine Oakley sunglasses like his, including those in the 15 October seizure, are sold. He did not attempt to make a case that genuine sunglasses are only ever sold at high prices. He did not suggest that genuine Oakley glasses like his are never sold at reduced prices at sales in stores where they are commonly available or whether genuine sunglasses are available at factory or other discount retail outlets. Johnstone was selling his sunglasses in a market setting at which people would in all likelihood expect to find bargains. So far as the evidence goes, an ordinary customer shopping at a suburban market stall could well believe that the sunglasses sold by Johnstone were the genuine article, but were being sold cheaply because of any one of a number of plausible explanations, eg, discontinued lines or seconds stock or liquidation stock. Johnstone's general assertion about pricing set out above is not, I think, sufficient to transfer to Oakley the evidential burden of going into detailed evidence about how and at what prices genuine sunglasses like those sold by Johnstone have been sold in Brisbane.
20 I find that, but for their seizure, Johnstone would have misrepresented the 2,917 pairs of sunglasses as genuine Oakley glasses by offering them for sale.
21 Oakley's evidence from witnesses, including Prpic and Taylor, is that the glasses in the three consignments the subject of this action were markedly inferior in quality in a number of respects to genuine Oakley glasses. This evidence is not disputed by the respondents. That is sufficient to establish that Oakley is likely to suffer damage to its goodwill from the activities of Johnstone in selling poor quality glasses in circumstances in which consumers might well think they are genuine Oakley glasses.
22 There will be a finding that Johnstone passed off his sunglasses for Oakley sunglasses as alleged in the statement of claim.
23 The evidence which I consider shows that Oakley has a good claim in passing off against Johnstone also shows it has made out its claim for relief under ss 80 and 75B the Trade Practices Act in respect of misleading conduct within s 52 of that Act against him.
24 Rumpf put forward a different defence to the trade mark infringement and the passing off and Trade Practices Act claims from that relied on by Johnstone.
25 He denies any responsibility for the importation of the 2,917 pairs of sunglasses consigned to Franchise China that were seized by customs officials on 15 October. He also denies any responsibility for the other importations of falsely marked Oakley sunglasses the subject of Oakley's evidence, though not the subject of claims for relief in the statement of claim. Rumpf admits, however, that he is responsible for the importations on 10 October 2001 of the 598 sunglasses consigned to himself and of the 530 sunglasses consigned to the fourth respondent. (He says he falsely identified the fourth respondent as the consignee of the second lot to avoid paying Chinese customs duties that would have been payable on a single consignment to him of all these glasses.) He says that he imported these two lots of glasses as agent for the Kirwan Group of companies solely for the purpose of them being given to Kirwan employees and contractors who worked for the Kirwan Group as Christmas gifts. Rumpf contends that he imported these sunglasses for a private purpose, and not for the purpose of trade, and should therefore escape liability under s 120 the Trade Marks Act (and in respect of the other causes of action relied on by the applicant).
26 Section 120(1) shows that infringement of a trade mark requires use by Rumpf of the applicant's registered mark "as a trade mark". Section 17 defines a trade mark as "a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person". Rumpf did not suggest that the fake Oakley marks applied to the sunglasses for which he accepted responsibility were not to be used on those sunglasses as a sign that they were connected with the applicant. If Rumpf's evidence is accepted, it is easy to infer that the false Oakley marks were to be so used. Rumpf's central contention was that the false Oakley marks on the sunglasses were not used "as a trade mark" within s 120(1) because he did not and never intended to deal with those glasses "in the course of trade", within the meaning of that term in s 17 of the Act.
27 He relied on WD & HO Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182 as authority for the proposition that importation of marked goods for a private, as opposed to a trading purpose of the importer, does not amount to use of the mark in trade and so cannot result in the infringement of another's registered mark. There, the question was whether the proprietor had used its registered mark in respect of cigarettes for the purposes of a trade in a particular period so as to defeat an application for removal of the mark from the Register for non-use. The High Court, at 191, said: