Pakula Tackle Australia Pty Ltd v Zacatak Lures Australia Pty Limited [2009] FCA 71 | Case summary

11 It seems that, after its acquisition of the business, Gamefish Central traded under the business name, "Pakula Tackle Australia"; see, for example, the use of this business name in corporate emails authored on behalf of Gamefish Central by Mr Pakula in August 2007 (part of Exhibit PP6). 12 Mr Pakula has also deposed (para 14 and para 15 of the affidavit filed by leave in Court on 4 February 2009): 14 In relation to the trade marks registered in my name, I have consented to [Pakula Tackle] bringing in any action or seeking to enforce rights associated with the registration of trade marks, be they retrospective or prospective infringements. 15 [Pakula Tackle] does on a day to day basis use all trade marks registered in my name and that of [Gamefish Central] for the purposes of the business of [Pakula Tackle]. (emphasis added) 13 Quite how it is that, in the face of a written agreement which provided for the acquisition of its business by Gamefish Central and the apparent carrying on thereafter of that business under the name Pakula Tackle Australia by Gamefish Central, evident from email correspondence, Pakula Tackle has again come to carry on the business which it sold is no where explained in the evidence relied upon on its behalf. 14 In the statement of claim (paras 18 - 21) the following allegations are made in respect of that part of the pleading directed to an alleged cause of action for passing off: 18 The applicant has since at least 1997 carried on business as a manufacturer and supplied, throughout Australia, of fishing equipment, apparatus and related accessories including fishing lurers, flies, teasers and fish attractants ("the Goods") which have distinctive names, descriptions, colours and designs and which the applicant has supplied under or by reference to the brand name "Pakula Lures Australia" (the "Brand Name.") 19 The Applicant has extensively promoted the Goods by reference to the Brand Name to members of the trade and to the public. 20 For many years and at least as at the date of commencement of the Respondents' conduct pleaded below, the Brand Name when used on or in relation to the Goods has come to signify to the trade and to the public in Australia the Applicant's goods, such that person acquiring or seeking to acquire the Goods under or by reference to the Brand Name or any brand name(s) closely similar thereto, expect and intend to acquire the Applicant's Goods and not the goods of any other person or entity. 21 The Applicant has, and for many years has had, a substantial and valuable good will in the Brand Name throughout Australia. These allegations are at odds with the history of who has carried on business under the name "Pakula Tackle Australia" selling "Pakula Lures" over the years either as deposed to by Mr Pakula or as evident from documents exhibited to his affidavits. 15 These particular deficiencies of proof in relation to the ability of Pakula Tackle to maintain an action for passing off were not highlighted in the submissions made on behalf of Zacatak, although questions were raised on its behalf as to the ability of Pakula Tackle, as opposed to some other entity, to maintain proceedings for either trade mark or copyright infringements, even assuming that there was otherwise a serious question to be tried in respect of these alleged causes of action. 16 It is not presently necessary to explore further whether Pakula Tackle is entitled to maintain the pleaded cause of action for passing off. I did not understand the submissions for Pakula Tackle to press this cause of action as a foundation for any of the interlocutory relief sought. In any event, on the present state of the evidence, I am not satisfied that Pakula Tackle has raised a serious question to be tried in respect of this cause of action as it is presently pleaded. 17 At or about the time when Pakula Tackle entered into the agreement for the sale of its business to Gamefish Central, Mr Pakula, according to him, came to an arrangement with Mr Mario Zacaropoulos. On whose behalf, ie personally or on behalf of a corporation, he and Mr Mario Zacaropoulos respectively were acting is not clear from Mr Pakula's affidavit, as para 22 thereof reveals: 22 The parties had previously discussed matters and confirmed agreements as follows: 22.1 Mario Zacaropoulos would sell the existing stock of the business of Pakula Tackle that were the property of Pakula Tackle Australia Pty Ltd at the time of the purchase by Peter Pakula and in the possession of Mario Zacaropoulos. 22.2 Mario Zacaropoulos was permitted to utilise the plant and equipment owned by Pakula Tackle Australia to manufacture new Pakula Tackle fishing lures; 22.3 Mario Zacaropoulos was permitted to sell Pakula branded products to select customers; 22.4 In permitting Mario Zacaropoulos to manufacture Pakula fishing lurers, Mario Zacaropoulos was to comply with strict specifications and guidelines associated with Pakula products. This included manufacturing the Pakula products to the standard and quality that Pakula products had a reputation for; 22.5 Mario Zacaropoulos was permitted to utilise the plant and equipment owned by Pakula Tackle Australia to manufacture Zacatak Lures at no cost; 22.6 Mario Zacaropoulos was to pay Pakula Tackle Australia for the existing stock of Pakula Tackle which was to be sold by Mario Zacaropoulos; 22.7 Mario Zacaropoulos was to pay a royalty to Pakula Tackle Australia on the sale of all newly manufactured Pakula lures as manufactured by Mario and Zacatak; 22.8 Mario Zacaropoulos was not to sell any stock whether original or newly manufactured stock to certain retailers and outlets. The list of retailers included no sale of any Pakula stock via the internet including internet only businesses; 22.9 Pakula Tackle Australia Pty Ltd would receive a royalty for supplying 4 main catalogues with Pakula Lures labelled with Pakula Lures. The 4 main catalogues were Melton International; J & M Outfitters; Finest Kind; and Rok-Max. 18 Again according to Mr Pakula, this alleged agreement was confirmed at a meeting which he had on 23 May 2007 with Mr Mario Zacaropoulos and the latter's wife, Mrs Jacqui Zacaropoulos. 19 In contrast, Zacatak, through services provided by Mr Mario Zacaropoulos and his wife, has, it seems, been conducting operations on the strength of a representation made to Mr Mario Zacaropoulos by Mr Pakula in an email of 28 March 2007 in which he set out at some length how he envisaged business operations were to be conducted in the event that he (or, inferentially, a company controlled by him) came to acquire from Pakula Tackle the business carried on under the name "Pakula Tackle Australia". It is instructive to set out an extract from that email: Intensions of how system will work if Pakula Tackle if Peter Pakula actually ends up with it. - That the operation in Nelson Bay will continue under Mario and Jackie Zac. (MJ) - That they can use whatever materials are left and pay for them on an as used basis. - That they can use the machinery as before with no charges whatsoever. However they remain the property of Pakula Tackle unless purchased by MJ. There is no time limit on this. - That any products sent out under the name Pakula will have small royalty. (no point trying to work out royalties until costings are done on the products) - MJ can use all moulds and prototypes with no charges ie any perishable products except for actual cost of materials used. Ie cost of molds = cost of silicone. The amount can be paid off over time. - That it is suggested that as Pakula Logo materials run out that they change over to Zacattack. - Any products under the name Zacattack, or whatever MJ choose to call their business/will have no royalties or payments to Pakula Tackle. - MJ can continue to use the names of products ie Trade Marks at no cost if under the MJ brand. A statement of authority will be given to MJ for this. - Pakula Tackle and MJ will be financially independent. Over time (I don't know how long) I will be targeting department and chain store markets with Pakula Lures (alla Stella McCartney and Target Stores) with products from Asia. If you change the Brand of current production this shouldn't impact on the current type of business and should in fact increase awareness of the brand and demand for the premium product range. The Zacattack range will if you wish remain on the web site and forum. (The forum will revert back to what it was, a product back up forum, not a general chat forum as it is now.) There will also be section of the web site explaining that the Zacattack range is what is now the current range of Pakula Products. I will not be targeting the market Pakula Tackle currently has. There is a huge potential for opening a web store by MJ that can sell all products made by both you and me. If you are interested in that you are welcome to have it. Web stores are easy to set up as is an Ebay store, but you work it under a hidden name, not a person or place that can be identified. If you are interested in that please stop selling to anyone selling on the web now. The way it is being done now is very damaging to the brand. [sic] 20 Over the course of the ensuing few months in 2007 which followed the meeting on 23 May 2007 which Mr Pakula describes, it came to his attention that a company known as "Pakula Lures Australia Pty Ltd" was trading in the market for game fishing lures. A search of the Australian Securities and Investment Commission's records disclosed that this company had been registered on 22 March 2007. It was controlled by Mr Mario Zacaropoulos. Having undertaken this search, Mr Pakula contacted Mr Mario Zacaropoulos as a result of which the latter caused Pakula Lures Australia Pty Ltd to change its name to Zacatak Lures Australia Pty Ltd. It was in that fashion the First Respondent came to have its present corporate name. 21 In August 2007, it came to Mr Pakula's attention that Zacatak continued to market Pakula Lures. He regarded this as a breach of what he saw as an agreement with Mr Mario Zacaropoulos prior to the acquisition of the Pakula Tackle Australia business. Mr Pakula deposes (para 43): On 19 September 2007, I informed Mario Zacaropoulos that because of his persistent and flagrant breaches of our agreement, I was terminating his rights to produce an sell Pakula lurers. I told him that I wanted: 43.1 return of my capital equipment used to manufacture lurers; 43.2 money owed for stock used and royalties; 43.3 that he cease using any equipment, stock and intellectual property of Pakula Tackle Australia. 22 That there was an agreement of sorts struck between Mr Pakula and Mr Mario Zacaropoulos in some capacity or another on the part of each of them at or about the time when Tailored Marine disposed of its business seems common ground but the terms of that agreement and who are the parties to it are presently opaque. These subjects are ones for resolution at trial. On the present state of the evidence, Pakula Tackle's pleaded case for a breach of the contract alleged does not strike me as particularly compelling. Perhaps this, too, was a reason why this cause of action was not pressed as a foundation for the interlocutory relief sought. 23 The causes of action which were pressed in support of interlocutory relief related to asserted infringement of intellectual property rights allegedly enjoyed by Pakula Tackle and allegedly misleading or deceptive conduct on the part of the Respondents. Before turning to these, the account of background facts should be completed. 24 On 19 September 2007, so Mr Pakula deposes, he informed Mr Mario Zacaropoulos that, "because of persistent and flagrant breaches of our agreement", he was "terminating his rights to produce and sell Pakula Lures". He told Mr Mario Zacaropoulos that he wanted: (a) return of "my" capital equipment used to manufacture lures; (b) money owed for stock used and royalties; and (c) that "he" cease using any equipment, stock and intellectual property of "Pakula Tackle Australia". 25 Mr Pakula then sought legal advice in relation to these matters. Inferentially, he did this in September 2007. It was to Pakula Tackle's present solicitors that he turned for this advice. 26 Between 24 September 2007 and 13 May 2008, those solicitors directed a series of letters either to Mr Mario Zacaropoulos and his wife in their capacity as the owners of Zacatak or, later, to their and that company's solicitors. In one way or another, the effect of those letters was to repeat the demand made of Mr Mario Zacaropoulos by Mr Pakula in person on 19 September 2007. The letters further foreshadowed the imminent institution of proceedings of the present kind in the event that these demands were not met. Counsel was, apparently after the date of the last of these letters, briefed to prepare the present proceedings. It was not until 19 December 2008 that proceedings, including the present claim for interlocutory relief, were instituted. 27 Mr Pakula offered the following by way of explanation for the delay in the institution of proceedings: Owing to my extent of travel overseas on numerous business trips, and concern over my wife being run over by a car, I was unable to confirm instructions to proceed until recently. His present concern arises from what he perceives to be similarities between Zacatak's marketing and packaging of its Zacatak lures and website content and Pakula Tackle's marketing and packaging of Pakula Lures and its website content. 28 This concern, of course, is based on his perception that the latter relate to the business conducted by Pakula Tackle rather than, as the Business Sale Agreement would suggest, a business conducted by Gamefish Central. 29 For his part, Mr Mario Zacaropoulos deposes to the gradual development of goodwill in the game fishing industry on the part of Zacatak since its establishment. Zacatak's business activities are the manufacture and sale of fishing lures and accessories. Zacatak operates from the home of Mr Mario Zacaropoulos and his wife at Nelson Bay in New South Wales. Its business is promoted by advertising in fishing magazines, advertising in the New South Wales Game Fishing Annual Journal, on its website and by direct contact with retailers. On behalf of Zacatak, Mr Mario Zacaropoulos attends and Zacatak sponsors as many fishing tournaments as possible to promote the company's products. In this regard he details in his affidavit (para 24) in a non-exhaustive way game fishing sponsorships and tournaments to which Zacatak is presently committed or in which it has participated in 2009. [Zacatak] has committed to many sponsorships and tournaments in the game fishing throughout the coming year including but not limited to: · Golden Lure Port Macquarie - sponsorship and participation - January 2009. · Bill Heyward Memorial Botany Bay NSW - sponsorship and participation - February 2009. · Big Fish Bonanza Lake Macquarie Newcastle NSW - sponsorship and participation - January 2009. · Sailfish Tournament Sunshine Coast QLD - sponsorship - March 2009. · Luhrs Shootout Port Stephens NSW - sponsorship and participation - February 2009. · Shores invitational Port Stephens NSW - sponsorship and participation - February 2009. · Riviera NPSGFC Interclub Port Stephens NSW - sponsorship and participation - February 2009. · Australian International Billfish Tournament Port Stephens NSW - sponsorship and participation - March 2009. · Trailer Boat Tournament Port Stephens NSW - sponsorship and participation - April 2009. · Broken Bay Game Fish Classic Broken Bay NSW - sponsorship and participation - April 2009. · Hot Current Tournament Coffs Harbour - sponsorship and participation - November 2009. 30 Participation or sponsorship in these events forms a major part of Zacatak business promotional activities. In all, Mr Zacaropoulos estimates that Zacatak has invested $10,000 in these events to date. 31 Mr Mario Zacaropoulos has deposed, and it does not seem to be controversial, that in the game fishing industry in Australia the busiest part of the year is between September and May with the months February, March and April being "extremely busy". During this time Zacatak's major clientele is found in the Australian market. For the balance of the year Zacatak endeavours to service overseas clients. Mr Mario Zacaropoulos estimates that about 70% of Zacatak's business comes from the Australian market with the balance, 30%, coming from overseas customers. 32 Were Zacatak to be restrained from trading, Mr Mario Zacaropoulos estimates that its potential losses could be as high as $30,000 per month (I assume in gross) with stock losses of up to $5,000 per month. Further, he deposes that Zacatak's continued presence in the game fishing industry is "fundamental" to its maintaining a successful business. His expectation is that, should Zacatak, he and his wife be restrained from trading or, as the case may be, being concerned in trading, they would suffer a loss of reputation and standing in the game fishing industry which it would be "nearly impossible" to re-establish. He bases that statement upon his experience arising from some 25 years involvement in the game fishing industry. None of these statements as to the effect interlocutory injunctive relief may have on repute seems inherently improbable. Though they are subjects which may be explored in greater depth and perhaps yield different conclusions as to the degree of severity of impact of fund injunctive relief, it seems reasonable to take them into account at this stage of proceedings. 33 Zacatak provides the main source of income for Mr Mario Zacaropoulos and his wife. 34 On behalf of Zacatak, Mr Mario Zacaropoulos denies "categorically" that it has breached any trade mark held by Pakula Tackle or that it has infringed any copyright which is vested in that company. He makes a like statement on his behalf and on behalf of his wife. He deposes that Zacatak does not manufacture or sell any lures or other item which is the subject of registered trade marks held by Pakula Tackle or by any other persons. 35 I turn then to the trade mark and copyright claims. 36 In its filed statement of claim (para 5) Pakula Tackle alleges that it is and at all material times the registered owner of registered trade mark numbers 753420, 740423, 753417 and 753419. The evidence though, as tabulated above by reference to a search of the trade mark register is that each of these trade marks is registered not to Pakula Tackle but to Gamefish Central. In, it seems, a belated recognition of this and in his capacity as a director of Gamefish Central, Mr Pakula, in a further affidavit filed by leave on the day on which the interlocutory injunction application was heard, deposed that Gamefish had "consented to [Pakula Tackle] bringing any action or seeking to enforce rights associated with the registration of trade marks, be they retrospective or prospective infringements". He further deposed that Pakula Tackle used on a day to day basis all trade marks registered in Gamefish Central's name and, for that matter, other trade marks registered in his name. I note that the statement of claim makes no reference to the use by Pakula Tackle of any trade marks registered in Mr Pakula's name. 37 In the course of submissions on behalf of Pakula Tackle attention was particularly focused upon registered trade mark number 753420 and an alleged infringement by "the respondents" of rights said to be enjoyed by Pakula Tackle in respect of that trade mark by the use of another registered trade mark which comprises the words "Zacatak Lures Australia". The trade mark is represented in a stylised format position within an image described as "flag Australia atop fishing rods crossed between two marlins". Such a trade mark, trade mark number 116590, is owned by Zacatak and was registered on the Trade Marks Register from 11 April 2007. 38 Registered trade mark number 753420 comprises the words "Pakula Lures Australia" over an image described as "bird, prey with wings outstretched atop 2 fishes and scroll". It has been registered with effect on and from 23 January 1998. 39 The oral and written submissions made on behalf of both Pakula Tackle and Zacatak in respect of trade mark law pertinent to whether there existed a serious case to be tried in respect of infringement were noteworthy for their generality. 40 Section 120(1) of the Trade Marks Act 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". 41 In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595: It is not necessary, in order to find that a trade mark offends against the section, to prove that there is an actual probability of deception leading to a passing-off. While a mere possibility of confusion is not enough - for there must be a real, tangible danger of its occurring (Reckitt & Colman (Australia) Ltd v Boden [3], at pp 94, 95; Sym Choon & Co Ltd v Gordon Choons Nuts Ltd. [4], at p 79) - it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt. (iii) In considering the probability of deception, all the surrounding circumstances have to be taken into consideration. (This includes the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold, and the character of the probable purchasers of the goods: Jafferjee v Scarlett [5], at p 120). 42 In applying this test one does not engage in comparing the registered mark and the allegedly infringing mark side by side but instead asks one self whether, drawing upon an imperfect recollection, potential customers might form an impression that the allegedly infringing mark is one in the same as the registered trade mark; see Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 415. That there might possibly be public confusion is not sufficient. 43 Approaching the question in this way and as a matter of general impression, my conclusion at this interlocutory stage is that Pakula Tackle's infringement case is weak in respect of any infringement of such rights as it may enjoy in respect of registered trade mark number 753420. I doubt whether, even drawing on imperfect recollection, a potential customer would be confused as between the two marks. There are obvious differences which one might think would play upon a recollection, the eagle in the case of the Pakula Tackle mark and the Australian Flag in the case of the Zacatak mark. The names themselves are radically different. 44 Additionally, in respect of Zacatak's trade mark number 1169590, I note, as in like fashion as did Foster J in the Sebel case, that this is a registered trade mark. The Registrar must therefore have considered that this trade mark had about a distinguishing features which permitted its registration under the Trade Marks Act. The Registrar's opinion is not binding and his reasons for registering trade mark number 1169590 are not in evidence. Nonetheless, at this interlocutory stage, that Zacatak's alleged infringement arises, in part, from its use of its own registered trade mark, is not a factor which tells in favour of the grant of interlocutory injunctive relief to Pakula Tackle. 45 For the reasons which I have given, I am not persuaded, in respect of registered mark 753420, albeit at an interlocutory stage, that Pakula Tackle has made out even a serious questionto be tried. 46 That conclusion renders strictly unnecessary for me to consider the ramifications of registered trade mark 753420 being registered to Gamefish Central, not Pakula Tackle. Section 106 of the Trade Marks Act makes provision for the assignment of a registered trade mark. Such an assignment may be made either with or without the goodwill of the business concerned in the relevant goods or services. The term "assignment" in relation to a trade mark is defined by s 6 of the Trade Marks Act to mean "an assignment by act of the parties concerned". No assignment of any of the marks pleaded is evidenced. Pakula Tackle is said to be an authorised user, but that is not the way its case is cast in the statement of claim. Further, the evidence led on its behalf to date on that subject is noteworthy for its vague generality. 47 Some brief reference ought to be made to other trade mark infringement claims said to give to rise to a cause of action on the part of Pakula Tackle under s 120 of the Trade Marks Act. Gamefish Central has the word mark "Witchdoctor". Zacatak uses the word "Doctor" to describe a device which seems very similar to one manufactured and retailed by Pakula Tackle. I doubt that the use of the word "Doctor" by Zacatak even rises above the level of possible confusion, at least as presently advised. The same conclusion is open as between Pakula Tackle's registered word mark "Cockroach" (trade mark 753419) and Zacatak's use of the word "Roach". 48 Gamefish Central has the benefit of registered trade mark 753417 in respect of the word "Lumo". This word appears on Zacatak's website in at least three instances to describe particular lures (see page 89 of the exhibits to Mr Pakula's affidavit, items 138, 155 and 157 in the reproduction there of particular lures). Gamefish Central may well have cause for concern about these uses on or in respect of products. It though is not the Applicant and Zacatak must meet the case as pleaded. 49 I turn to consider to copyright issues. 50 In his further affidavit Mr Pakula deposes that, in his capacity as a consultant to Pakula Tackle, he was the author of "various copyright material" that was used for the business of that company. He further states that in that consultant capacity, he "continued to maintain and update the content on the website and was the sole author of such material put on the website". 51 The relationship as between Mr Pakula and Pakula Tackle during the term of his "consultancy" is not stated. Nor is there any reference to his relationship with Tailored Marine whilst a "consultant" to that company. Perhaps the use of the word "consultant" is intended to mean that he was not an employee. Were he to be regarded as an employee then website content developed by him in the course of that employment would yield a copyright vested in his employer: see s 35(6) of the Copyright Act. 52 Under the terms of the Business Sale Contract as between Pakula Tackle and Gamefish Central, the "business" is defined (cl 1.1) to include "the chattels, fittings, fixtures and furniture, goodwill, intellectual and industrial property, licences, permits, plant, quotas and software of the business, together with any other items referred to in this contract as forming part of a business" (emphasis added). Such copyrights as Pakula Tackle then enjoyed therefore passed to Gamefish Central under the terms of the Business Sale Contract. The agreement concerned is in writing, therefore complying with the requirement found in s 196 of the Copyright Act that an assignment of copyright does not have affect unless it is in writing signed on or behalf of the assignor. No written agreement evidencing a re-assignment of that copyright by Gamefish Central to Pakula Tackle is in evidence. What is pleaded (para 32 of the statement of claim) is that the Applicant is the owner of the copyright in the material on its website. That material is alleged to have been developed under a contract of service to Pakula Tackle. It is further alleged that Pakula Tackle has progressively devised and compiled the marketing material on the website from 1997. 53 Though not raised in submissions by Pakula Tackle, I accept that s 196 of the Copyright Act does not prevent the creation of an equitable interest in copyright pursuant to an oral agreement for value to assign copyright: Acorn Computers Ltd v MCS Microcomputer Systems Pty Ltd (1984) 6 FCR 277. No such agreement is pleaded and evidenced in relation to Pakula Tackle. 54 What is deposed to is an assignment by Gamefish Central to Pakula Tackle of the right to litigate the infringement of copyright. When this assignment occurred is not evidenced. In Taypar Pty Ltd v Santic (1989) 21 FCR 485 at 491, Spender J stated: Any infringement of the copyright in the drawing 87.404, the "Reflections" plan, or the house at Drayton Terrace, occurred at a time when Taypar was not the owner of the copyright, and in my view, Taypar is not competent to sue in respect of any such infringement. 55 This was relied upon behalf of Zacatak so as to question whether Pakula Tackle had even established any standing to bring the alleged copyright infringement claim. For its part, Pakula Tackle sought comfort from a more recent decision, Global Brand Marketing Inc v Cube Footwear Pty Ltd (2005) 65 IPR 44. In that case, in the course of an interlocutory judgment in respect of an application for the dismissal of a proceeding or alternatively the striking out of a statement of claim, Goldburg J (at page 56, para 59) stated: According to para 24 of the statement of claim, the deed of assignment purports to assign "all part, present and future rights to sue for infringement of the copyright and all other intellectual property rights in the said sample patterns and footwear patterns used to produce footwear under licence from the applicant". This assignment of rights to sue is an assignment not of a bare right of action but the assignment of a right which is incidental to the assignment of intellectual property rights: see Taypar at FCR 491-2; IPR 153. The distinction between an assignment of copyright simpliciter and an assignment of copyright coupled with an assignment of rights to sue for infringement, whether past, present or future, does not appear to have been the subject of consideration in Dixon v Masterton. 56 No assignment is pleaded in the statement of claim of any rights to sue for infringement of copyright. Further, the evidence concerning the assignment of a right to sue from Mr Pakula is in its present form nothing more than a general assertion. 57 Assuming though that Pakula Tackle either enjoys copyright in the material in the website or has a right to sue in respect of infringements of that copyright is there raised, prima facie, an infringement case? 58 The Pakula Tackle website has the hall marks of a trade catalogue. So too does that of Zacatak. A trade catalogue can constitute an original literary work; University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608. In A-One Accessory Imports Pty Ltd v Off Road Imports Pty Ltd (1996) 65 FCR 478 at 487, Drummond J stated: Copyright subsists in an "original literary work": s 32 of the Act. The expression "literary work" is defined in s 10 to include: "a table, or compilation, expressed in words, figures or symbols ... ". Trade catalogues are capable of constituting original literary works: University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608; Purefoy Engineering Co Ltd v Sykes Boxall & Co Ltd (1955) 72 RPC 89 at 95. The cases repeatedly say that whether a compilation has sufficient originality to attract copyright protection depends on the degree of skill, judgment or labour which has been involved in producing it. See Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273; [1964] 1 All ER 465; Football League Ltd v Littlewoods Pools Ltd [1959] Ch 637 at 650-651; Blackie & Sons Ltd v Lothian Book Publishing Co Pty Ltd (1921) 29 CLR 396 at 398-399; Real Estate Institute of New South Wales v Wood (1923) 23 SR (NSW) 349 at 352. So far as compilations that consist entirely of existing material, that is, material not created by the compiler, are concerned, Ladbroke (Football) Ltd is authority that originality may be found, and a claim of copyright may therefore subsist, by virtue of selection alone. See at 277-278; 469-470, per Lord Reid, at 286-287; 476-477 per Lord Hodson, at 289-290; 478-479 per Lord Devlin and at 292, 293; 480, 481 per Lord Pearce. In Collis v Cater, Stoffell & Fortt Ltd (1898) 78 LT 613, a decision that has "never been doubted" (Ladbroke (Football) Ltd at 290; 479) copyright was held to exist in a chemist's catalogue "although it contained nothing whatever but a simple list' of drugs, etc with names and prices which the plaintiff kept in stock or could obtain to order": Ladbroke (Football) Ltd at 278; 470. That copyright can exist in such a mundane compilation of information readily available to all shows why the skill, judgment and labour in selecting what to include in a trade catalogue will be as relevant as the often very limited skill, judgment and labour involved in putting that selection into written form, in determining whether the compilation has sufficient "originality" to attract copyright. In considering whether a compilation that wholly consists of or that includes existing material is itself an original work, the question is whether the compilation, looked at as an entity, is original: it is not proper to dissect the work into its parts, and by determining that the individual parts lack originality, to deny originality to the whole work. This issue is dealt with fully in Ladbroke (Football) Ltd. The reason is that by s 32 of the Act, "copyright is a statutory right which ... would appear to subsist, if at all, in the literary or other work as one entity", per Lord Hodson at 285; 475. See also Ladbroke (Football) Ltd at 276-277, 290 and 291; 468-469 and 478-479. Copyright in a work will be infringed by the unauthorised reproduction of a substantial part of the work: see ss 36(1) and 14(1) of the Act. In determining whether that has occurred, it is sometimes said that the question is whether the part taken could by itself be the subject of copyright. But as Lord Reid said at 277; 469, when both the questions whether copyright subsists in a work and, if so, whether it has been infringed are in issue: " ... that is only a shortcut, and the more correct approach is first to determine whether the plaintiffs' work as a whole is original' and protected by copyright, and then to inquire whether the part taken by the defendant is substantial." Later in that same case, Drummond J observed (at 490): Ladbroke (Football) Ltd, Reddwood Music and Eisinger proceed on the basis that a composite work made up of pirated material and original material produced by the compiler can itself be an original work possessing copyright, even though it may also infringe the copyright in the pirated material included in it. In my opinion, a work can be an original work in which copyright will subsist, even though it is itself an infringement of the copyright in an earlier work because it is, in part, a copy of a substantial part of that copyright work. This will be the position provided the later work includes qualitatively significant changes to the copies material. 59 A substantial copying of material on the Pakula Tackle website is evident upon a perusal of the material found on the Zacatak website. The copying is not universal. Original content both in terms of lure illustration and text is evident in Zacatak's website. The question as to whether Zacatak's website, looked at as a whole, is "original" is one for trial. I accept that Pakula Tackle has raised a serious question to be tried in respect of infringement of such copyright rights, if any, as may repose in it in respect of the website. 60 Pakula Tackle also relied upon its pleaded case under s 52 of the Trade Practices Act and s 38 of the Fair Trading Act to ground the interlocutory relief sought. It is important to note how that claim is pleaded: 22. The First, Second and Third Respondents carry on a business and in the course of that business have commenced to supply fishing equipment, apparatus and related accessories including fishing lures, flies, teasers and fish attractants and promote such goods under or by reference to the brand name "Zacatak Lures Australia" in Australia. PARTICULARS Such products were and are available for purchase via the Respondents' website and through numerous retail tackle shops. 23. The brand name of the Respondent is substantially identical with, or deceptively similar to, or is a colourable variation or limitation of the Applicant's Brand Name. [Pakula Lures Australia] 24. By the use of their said brand name the Respondents have represented to members of the trade and to the public, in trade or commerce, and contrary to the fact, that the Respondents' goods are the Applicant's goods or that the Respondents' goods have some connection in trade with the Applicant or its business. 25. Members of the trade and of the public purchasing or otherwise acquiring the Respondents' goods under the Respondents' brand name have done so, or alternatively are likely to do so, in the belief, induced by the Respondents' use and promotion of the brand name "Zacatak Lures Australia" that the Respondents' good are the Applicant's goods or that the Respondents' goods have some connection in trade with the Applicant's business. 61 The allegation is then made: 26. By reason of their conduct pleaded in paragraph 22 hereof, the Respondents have: (a) … (b) in the case of the First Respondent, engaged in conduct that is misleading or deceptive, or likely to mislead or deceive, in contravention of s 52 of the Trade Practices Act 1974; and (c) in the case of the Second and Third Respondents, engaged in conduct that is misleading or deceptive, or likely to mislead or deceive, in contravention of s 38 of the Fair Trading Act 1987 (Qld). 62 It is to be noted that there is no allegation in respect of the Trade Practices Act cause of action that Mr Mario Zacaropoulos or Mrs Jacqueline Zacaropoulos were knowingly concerned in the Pakula Tackle's corporate contravention of s 52. Rather, their individual conduct is alleged only to amount to a contravention of s 38 of the Fair Trading Act. Yet, on the evidence, neither Mr Mario Zacaropoulos nor his wife, themselves engaged in business, as opposed to, engaging, in their capacities as working directors, in the business of Zacatak in their individual capacities. It will further be noted that the conduct alleged in paras 23, 24, and 25 of the statement of claim does not feature in the alleged contraventions of either s 52 of the Trade Practices Act or s 38 of the Fair Trading Act made in para 26 of the statement of claim. There is a disjunct. 63 There are passages in the material on Zacatak's website which give rise to a concern, albeit a concern not particularised as a contravention in the statement of claim, in respect of conduct which may perhaps be regarded as misleading or deceptive on the part of Zacatak. On what appears to be the home page of Zacatak's website, the following statements are made: We are manufacturers of hand crafted quality game fishing lurers previously Pakula Lures and fish teasers for the serious fisherperson. The company was re established in April 2007 after the sale of Pakula Tackle back to its original owners. Due to legal constraints from Pakula Tackle the company was renamed to Zacatak Lures Australia Pty Ltd. Under this banner we are now manufacturing the Lures and teasers, which we were manufacturing for ten years prior. 64 In respect of the pleaded case, I doubt that Zacatak's use of the words "Zacatak Lures Australia" is in any way capable of misleading or deceiving members of the public that its business is that of Pakula Tackle or hitherto carried on by others under the name "Pakula Lures Australia". In this regard, the evidence does not, in my opinion, raise a serious question to be tried. Were the statement of claim amended, the statements made in the passage quoted from the Zacatak website might be thought to raise a question for trial in relation to whether they are misleading as to the provenance of Zacatak's business and whether it is a continuance of a business conducted by others both in the past and presently under the name "Pakula Lures Australia". 65 I remind myself too that a contravention of s 52 of the Trade Practices Act is not established by the mere manufacture and distribution of a product which, though properly labelled with the distinguishing name and mark of the manufacturer, bears great resemblance and is even intended to bare such resemblance to the product of another manufacturer which has and continues to be marketed and advertised: Parkdale Custom Built Furniture Proprietary Limited v Puxu Proprietary Limited (1981) 149 CLR 191. 66 Perhaps out of an abundance of caution, Zacatak by its Counsel offered the following undertaking: UNDERTAKING 1. In respect of the first page of the website, www.zacataklures.com.au (attached hereto) the Respondents shall within 30 days hereof: a. cause the words 'previously Pakula Lures' in the first paragraph to be deleted; b. cause the words 'which we were manufacturing for ten years prior' in the third paragraph to be deleted; c. cause the words 'now' and 'more so than before' in the sixth paragraph to be deleted; d. cause the words 'under the old banner' in the tenth paragraph to be deleted. 2. The Respondents undertake, until the trial of this action or earlier order, to keep full and proper accounts of and relating to the sale of all game fishing lures by the First Respondent. 67 All in all, having regard to its pleaded case and the evidence relied upon in support thereof on the application, there are flaws evident in Pakula Tackle's ability even to prosecute its trade mark and copyright infringement claims. This aside, most of the trade mark infringement claims do not, in my opinion, raise a serious question to be tried. Assuming that questions of standing could be resolved, Pakula Tackle has raised a serious question to be tried in respect of a copyright infringement claim. The pleaded claims for relief relying upon the Trade Practices Act and the Fair Trading Act are not strong. Especially that is so in relation to claims again Mr Mario Zacaropoulos and his wife personally. 68 In effect, Pakula Tackle has delayed some two years in the institution of proceedings and in the seeking of interlocutory injunctive relief. The explanation given for the delay of that length is not compelling. Over all of that time Zacatak has continued to carry on business. It has made future commitments. Those commitments involve third parties. 69 Zacatak's packaging is reproduced in evidence. It is distinct even though is seems that its products bear close resemblance to those of Pakula Tackle. I doubt whether even uncertainty in the game fishing market place will arise from the continued distribution of Zacatak's products as packaged. In the interval between now and trial a modification of Zacatak's website in terms of the undertaking which it has offered will remove adequately, in my opinion, cause for concern as to members of the public being misled or deceived as to Zacatak's business being a continuance of that of Pakula Tackle. That of course assumes, charitably, that the business is that of Pakula Tackle as opposed to Gamefish Central. 70 The strength of Pakula Tackle's causes of action is not such as viewed either separately or totally to warrant in the period leading up to trial a disruption to Zacatak's business operations by the granting of the interlocutory relief sought. The impact of such relief on its operations would not be proportionate to the presently revealed strength of Pakula Tackle's claims, especially having regard to the delay which has occurred. 71 Zacatak has undertaken to give all necessary and proper accounts. I am not presently persuaded that damages or alternatively an account of profits will not offer an adequate alternative remedy in the circumstances. 72 Another factor which is relevant is that it is possible, assuming Pakula Tackle is willing and able to prosecute its claims with due diligence, to offer relatively early trial dates. 73 These factors tell, as matter of discretion, and on the balance of convenience, against the granting of the interlocutory injunctive relief sought. 74 For these reasons the application for interlocutory injunctive relief is refused. I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

Pakula Tackle Australia Pty Ltd v Zacatak Lures Australia Pty Limited

At a glance

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Decision date

Before

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Judgment (7 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (16)