Because cases of importation of goods bearing counterfeits of registered trade marks are not uncommon in the Court, I researched the question further, and invited, and received the benefit of, a written submission by Mr Dimitriadis on the point, for which I am grateful.
22 In Sony Computer Entertainment Australia Pty Ltd v Saleh [2001] FCA 717 ('Saleh') (at [39]) I noted that ss 131 and 133 contemplate that an importation may, but will not necessarily, constitute an infringement. Indeed, Part 13 of the Act is headed 'Importation of goods infringing Australian trade marks'. That Part contemplates both that a trade mark may be infringed by 'importation' of goods (ss 133(2), 136(3)(a), 136(4), 137(4)(a)) and that there may be an 'action for infringement of the notified trade mark in respect of the [seized] goods' (ss 134(b)(iii), 136(1)(a), 136(2)(b)(i), 136(3)(b), 138). While it would be consistent with the latter expression that the infringer might be a person other than the importer, the former class of provision clearly contemplates that there may be infringement by the importer consisting of the importer's conduct prior to seizure.
23 In Saleh, the respondent imported 79 CD-ROMs which were taken from his baggage by the Customs CEO at Sydney International Airport. I expressed the opinion (at [39]) that whether importation in a particular case constituted an infringement depended on whether, in all the circumstances of the case, the importation satisfied the terms of s 120(1). I concluded (at [40]) that whatever the position might be in another case of importation (I referred to an isolated 'innocent' importation of a single good for private use or consumption by the importer), the respondent's importation of 79 CD-ROMs in the circumstances identified by me in that case (at [34]) constituted a use by him of the marks which were on the CD-ROMs and associated 'slicks' and which were electronically stored on the CD-ROMs, as trade marks in infringement of the applicant's registered trade marks. I made declarations of infringement.
24 In Sony Computer Entertainment Australia Pty Ltd v Yansen [2002] FCA 1000 ('Yansen') the respondent, inter alia, imported for sale 74 CD-ROMs which were seized by the Customs CEO. Hely J found that the importation constituted an infringement of the applicant's registered trade marks, and made declarations of infringement.
25 In Nokia Corporation v Mai [2003] FCA 924 ('Mai') Kenny J (at [54]) quoted Saleh at [39] with apparent approval, and, in circumstances which her Honour described (at [56]) as 'relevantly indistinguishable from those' in Saleh, found infringement established. By consent, a declaration was made but not one of past infringement.
26 In Saleh and Mai, certain circumstances were present beyond those of the present case, but the facts of Yansen, in so far as they related to the importation of the 74 CD-ROMs, are on all fours with the present facts.
27 Oakley also concerned seizure of imported goods, pairs of sunglasses bearing counterfeits of registered trade marks, by the Customs CEO. In fact, there were three seizures: they were of, respectively, 530 pairs, 598 pairs and 2917 pairs of sunglasses. The relevant respondents were the importing company and two directors of it. At [3] his Honour said the applicant's case was that all three infringed the applicant's registered trade marks 'by importing these sunglasses into Australia for the purposes of sale here'. The applicant also contended that the directors were 'liable as joint tortfeasors for [the company's] trade mark infringements'.
28 Drummond J had given judgment on an earlier date against the company in default of delivery of its defence. His Honour said (at [6]) that he had, on that occasion, relied on evidence relating to the 2917 pairs of sunglasses, 'that showed [the applicant] had a good factual foundation for this judgment'. His Honour made a simple 'declaration that the first respondent [the company] has infringed the applicant's marks'. Importantly for present purposes, he also ordered that the 2917 pairs of sunglasses be forfeited to the Commonwealth pursuant to s 137(3)(b). It is therefore clear that his finding of infringement by the company had been based on 'importing with intent'.
29 His Honour's reasoning was the same, in substance, in relation to the two directors. He made findings of infringement by both of them. There was again an order for forfeiture to the Commonwealth (of the other two seized consignments). Although his Honour did not make a declaration of infringement by the directors, the fact of forfeiture again shows that his findings of infringement depended on importation for sale, and not on any subsequent sale of, or other dealing with, the seized goods.
30 In my opinion, Playboy's legal advisers correctly understood Drummond J's findings of infringement to be based on the act of importation alone.
31 Treatises on the law relating to trade marks commonly state that importation for sale of goods bearing counterfeits of a registered trade mark is a use of those counterfeit marks in infringement of the registered trade mark: Kerly's Law of Trade Marks and Trade Names (12th ed)(1986) at [14-13 (as noted at [20] above, legislation now governs the position in the United Kingdom, as the 13th edition of Kerly's recognizes at [13-31]]; Ricketson, The Law of Intellectual Property (1984) at [36.24], [36.27]; Lahore, Patents, Trade Marks and Related Rights (Butterworths, loose leaf at [56.120]. Dunlop Rubber Co Ltd v AA Booth & Co Ltd (1926) 43 RPC 139 ('Dunlop Rubber') is sometimes cited in support of such statements. In that case, an English Dunlop company owned registered trade marks identical to those owned by a French Dunlop company. The English company complained of importation and sale by the defendant in England of tyres made by the French company and bearing the trade marks. The English company obtained injunctions to restrain infringement, an order for delivery up or destruction, and an inquiry as to damages.
32 The complaint made related to three alleged events: the sale of six infringing French Dunlop tyres towards the end of 1923; a sale of one infringing French Dunlop tyre on 14 July 1924 to an employee of the plaintiff; and the importation of consignments of tyres in July 1924 which included a number of French Dunlop tyres. I need not discuss the first of these (Tomlin J noted (at 140) that it was of 'relatively little importance').
33 The plaintiff was notified by the Customs House at Salford Dock of the arrival of the tyres and of their temporary detention in a shed on the dock. A representative of the plaintiff was permitted on two occasions in July 1924 to enter the shed and to carry out an inspection. He found a number of French Dunlop tyres. They were traced to the defendant's warehouses.
34 The plaintiff received a further notification from the docks and its representative attended on 15 August 1924 to carry out a further inspection, but the defendant, whose officer happened to be present, objected, and the inspection did not proceed. Meanwhile, on 13 August 1924, the plaintiff had issued its writ.
35 A year later, in August 1925, two further shipments were inspected and found to contain French Dunlop tyres. Those shipments were also traced to the defendant's warehouses, and it was not disputed that they were consigned to, and received by, the defendant.
36 At 145 his Lordship referred to the identicality of the English and French Dunlop trade marks, and observed:
'It follows from that that a French "Dunlop" tyre having upon it the Trade Marks which are identical with the English Trade Marks cannot be imported for sale into this country without infringing the English Trade Marks.' (Emphasis added)
Similarly, at 146 his Lordship stated:
' … with regard to the French tyres, if the case is made that the Defendants import for sale orsell them here for "Dunlop" tyres, then there is obviously an infringement of … the trade marks …' (Emphasis added)
Clearly, his Lordship accepted in these passages that importation for sale, without any actual sale, was an infringement.
37 Tomlin J concluded that the tyre sold on 14 July 1924 had come out of one of the July 1924 consignments, and went on to state (at 149):
'… there has been in the course of this trade a sending of foreign-made tyres by the agents in the consignments and there has not been exercised by the consignees of the Defendants sufficient diligence to enable that fraud, or that default, to be discovered, with the result that there has been an importation for sale of such tyres, and, at any rate, a sale of one of them.'
(Emphasis added)
38 The words emphasised in this passage may be said to suggest that his Lordship thought he did not need to decide whether bare importation for sale constituted an infringement, because there had been a sale of at least one of the tyres - a clear infringement. However, read with the earlier passages set out above, his Lordship was, I think, indicating that importation for sale was itself an infringement.
39 Section 39 of the Trade Marks Act 1905 (UK) which applied at the time of the importation in Dunlop Rubber, provided that the proprietor of a registered trade mark had 'the exclusive right to the use of such trade mark upon or in connection with the goods in respect of which it [was] registered'. Section 3 of the same Act defined 'trade mark' as:
'a mark used or proposed to be used upon or in connexion with goods for the purpose of indicating that they are the goods of the proprietor of such trade mark by virtue of manufacture, selection, certification, dealing with, or offering for sale'.
It will be noted that s 39 did not contain the words 'as a trade mark' following the expression 'the exclusive right to the use' or elsewhere. But the presence of those words in s 120(1), (2) and (3) does not provide a basis for distinguishing the Australian infringement provision from s 39 of the UK Act of 1905, or from s 120's predecessors in Australia (see ss 58(1) and 62(1) of the Trade Marks Act 1955 (Cth) and ss 50 and 53 of the earlier Trade Marks Act 1905 (Cth)). The reason is that registration has only ever given a right to the exclusive use of the registered mark 'as a trade mark', and therefore it was only ever use of a sign 'as a trade mark' that constituted an infringement: see The Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 422 - 425 per Kitto J, and cases there cited.
40 The facts of Upmann v Forester (1883) 24 ChD 231, a case not referred to in Dunlop Rubber, are on all fours with those of the present case. The defendant imported 5000 cigars in cases bearing a spurious brand. While the cases were still at the docks, the plaintiff served him with a writ claiming, relevantly, an injunction restraining him from selling or dealing with the cigars in boxes bearing a colourable imitation of its registered trade mark. The parties immediately settled the proceeding and Chitty J had to resolve only the question of costs.
41 It appeared from the defendant's affidavit, inter alia, that when he ordered the cigars (in Belgium) he did not mention any brand; that he had never seen the cigars or the boxes in which they were packed; and that he had not known that there were manufacturers of cigars trading under the plaintiff's name.
42 Chitty J noted that the first question was whether there had been an infringement. Infringement consisted of the 'use' of a registered trade mark: see Trade Marks Registration Act 1875 (UK), ss 1, 3, 4. Chitty J noted that the plaintiff was, both at common law and under the statute, entitled to the exclusive use of its trade mark, and that its case was that the defendant had used it and knowingly or unknowingly infringed its right. His Lordship stated (at 234):
'Although it may be the Defendant's misfortune that the boxes should bear a spurious trade-mark, yet, according to the authorities, he must be held to have committed a clear infringement of the Plaintiffs' right sufficient to entitle the Plaintiffs to an injunction for the purposes of this action.'
His Lordship said that there had been an infringing use of the trade mark prior to the commencement of the action, that is, while the boxes of cigars 'were standing to the order of the Defendant at the docks' (at 232).
43 Other authorities which, in various ways, would suggest that Mr Hong's conduct in importing the Seized Goods for sale constitutes a use of the counterfeits of the Trade Marks on them as trade marks, include Upmann v Elkan (1871) LR 7 Ch App 130 (mere carriers receiving goods only for transmission to consignees, not for sale); James Minifie & Co v Edwin Davey & Sons (1933) 49 CLR 349 (defendant exporter of flour, by arrangement with its Singaporean buyer, packing flour in bags bearing buyer's Singaporean registered trade mark closely resembling plaintiff's Australian registered trade mark, transporting bags of flour to wharf in enclosed trucks or vehicles, handling them on wharf and placing them on board ship); and see the cases on the expression 'in the course of trade' referred to in Shanahan's Australian Law of Trade Marks & Passing Off (3rd ed, 2003) at [2.185].
44 The single judge authorities and the texts to which I have referred consistently hold that to import goods bearing a sign for the purpose of sale or other commercial exploitation in the country in question, is to use that sign as a trade mark, notwithstanding that the goods have remained at the dock or the airport. This is so, even though in special circumstances such as those of Upmann v Forester, the result may appear harsh to the importer. It is for an appellate court to depart from a line of authority so well established.
45 For the above reasons, in my respectful opinion, Drummond J was correct in making the declaration of infringement in Oakley, and Playboy would have been entitled to one on the facts of the present case.
46 As noted earlier, Playboy pressed only its claim for quia timet relief in respect of threatened infringement of the Trade Marks, threatened misleading and deceptive conduct in contravention of s 42 of the Fair Trading Act 1987 (NSW), and threatened passing off. For the above reasons I made orders generally as proposed by Playboy.
47 Mr Dimitriadis indicated that his client did not intend to pursue its claim for pecuniary relief. Therefore nothing further remained in the proceeding upon the making of the present orders. Accordingly, the proceeding was otherwise dismissed.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.