Raben Footwear Pty Limited v Marathon Footwear Pty Limited

REASONS FOR JUDGMENT 1 The matter presently before the Court is an application for interlocutory injunctive relief sought by Raben Footwear Pty Limited ACN 060 720 498 against Marathon Footwear Pty Limited ACN 099 893 008. There are four respondents named in the proceedings, being Marathon Footwear Pty Limited ACN 099 893 008, to which I will hereafter refer as 'Marathon', Zhong Da Chen, known as Peter Chen, who is the second respondent, Jia Huong Chen, known as Chris Chen, who is the third respondent and Simon Lin, who is the fourth respondent. 2 Each of the second, third and fourth respondents are directors of Marathon. The applicant, to which I will refer as 'Raben Footwear', was registered in New South Wales on 29 June 1993. Marathon was registered in New South Wales on 13 March 2002. Prior to the incorporation of Raben Footwear, there was a partnership business conducted by the Messrs Lewy, under the name Raben Footwear. 3 The interlocutory relief which is sought is referred to in paragraph 4 of section B of the Application filed 15 April 2008, although senior counsel for the applicant has indicated that the Application is now confined to interlocutory orders as sought in paragraphs 5, 6, and 7 of section A of the Application. The orders that are sought in paragraphs 5, 6, and 7 on a permanent basis are: '5. An order that the first respondent, by itself and by its servants or agents, and each of the second, third and fourth respondents be restrained from importing into Australia, displaying, selling, distributing, supplying or offering to sell, distribute or supply any product bearing the name Raben and/or Raben Footwear or any name or names deceptively similar thereto. 6. An order that the first respondent, by itself and by its servants and agents, and each of the second, third, and fourth respondents be restrained from importing into Australia, displaying, selling, distributing or otherwise offering to sell, distribute or supply any product packaged in containers or packets bearing the names Raben and/or Raben Footwear or any name or names deceptively similar thereto. 7. An order that the first respondent withdraw from display and sale all products bearing the names Raben and/or Raben Footwear or any names deceptively similar thereto.' 4 In Castlemaine Tooheys Limited v The State of South Australia (1986) 161 CLR 148 at 153, Mason ACJ stated the principles governing the grant of interlocutory injunctions as follows: 'In order to secure such an injunction, the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.' This passage from the judgment of Mason ACJ was cited with approval by Gleeson CJ in Australian Broadcasting Corporation v Lenah Game Meats Pty Limited (2001) 208 CLR 199 at 217-8. 5 Approaching the matter in the manner indicated by Mason ACJ, I note, in passing, the observation of Long Innes J in Kettles and Gas Appliances Ltd. v Anthony Hordern & Sons Ltd. (1934) 35 SR(NSW) 108 at 125-126, where his Honour said: '…where the name under which an article has long been sold by the sole maker or owner-vendor thereof has become distinctive of the goods of that trader, although that trader acquires thereby no monopoly, a rival trader may not sell the same article under that name without sufficiently distinguishing his goods from those of the original trader as to prevent the likelihood of his goods being purchased as and for those of the original trader. …' 6 In Turner v General Motors (Australia) Proprietary Limited (1929) 42 CLR 352, the High Court granted relief restraining the appellants from using the words 'General Motors' in relation to their business of selling second-hand motor vehicles. The High Court found that the words 'General Motor' or 'General Motors' could not be used without clearly distinguishing such business from the business carried on by General Motors (Australia) Proprietary Limited, being a subsidiary company of the American corporation, which I would understand to be known as General Motors Inc. 7 In relation to the recent case concerning the use of the colour purple in relation to packaging of chocolate by Darrell Lea Chocolate Shops Proprietary Limited (Cadbury Schweppes Pty Limited (ACN 004 551 473) v Darrell Lea Chocolate Shops Pty Ltd (ACN 000 498 386) [2007] FCAFC 70), the Full Court of this Court said at [98]: 'There is an overlap between causes of action arising under Part V of the Trade Practices Act and the common law tort of passing off. However, the causes of action have distinct origins and the purposes and interests that both bodies of law primarily protect are contrasting. Passing off protects a right of property in business or goodwill whereas Part V is concerned with consumer protection. Part V is not restricted by common law principles relating to passing off and provides wider protection than passing off.' 8 Section 52 of the Trade Practices Act 1974 (Cth) relevantly provides: '52(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.' 9 The evidence before the Court in this case demonstrates quite clearly that the applicant has been in business as a supplier of footwear under the name 'Raben' or 'Raben Footwear' for a very long time. The business is conducted through a number of footwear outlets, and has been conducted throughout New South Wales at a number of different outlets. One of the styles of footwear supplied by the applicant is a casual, slip-on canvas shoe with what I would call a rubber sole. 10 That product is clearly identified in the samples which have been tendered as Raben Footwear by the prominent use of the word 'Raben' on the innersole of the shoe and the word 'Raben' affixed at the rear of the shoe, either vertically or horizontally. In recent times, the evidence would suggest that Marathon has been selling a casual, slip-on canvas shoe with a rubber sole which bears the prominent name 'Raben' on the innersole along with the letters 'XTC' and a letter indicating that there is a registered trademark in respect of what appears on the innersole. 11 The evidence demonstrates that the Marathon product which employs the word 'Raben' on the innersole is supplied in boxes which bear the word 'RABEN' against the word 'STYLE'. The footwear itself is supplied in clear plastic bags which also have imprinted on them the words 'STYLE NAME: RABEN'. The evidence establishes that the applicant, Raben Footwear Pty Limited, started applying the word 'Raben' to its footwear to distinguish it from other footwear when Mr Ronny Leopold Lewy, one of the two Lewy brothers who were involved in the partnership, prior to the incorporation of Raben Footwear Pty Limited, took the first two letters of his daughter Rachel's name and added them in about 1975 to the first three letters of his son Benjamin's name. 12 Since then, their product has been identified as 'Raben' footwear or as 'Raben Footwear'. Obviously this is not an occasion for making any final findings of fact, and, of course, at this stage there has been no opportunity relevantly available to the respondents to put evidence before the court. 13 The proceedings were commenced on 15 April 2008, when leave to effect short service was granted. I am satisfied that service has been duly effected upon Marathon and upon the second respondent who has appeared. 14 When the matter was called, there was no appearance for Marathon, nor was there any appearance for the third or fourth respondents, in relation to whom there is no evidence of service. The second respondent, who answers to the name Peter Chen, has informed the Court that the third and fourth respondents are presently overseas and that the office bearer within Marathon who would be charged with dealing with a matter such as this is the fourth respondent, and that he won't be back in Australia for about another five to six weeks. 15 At this stage, there has been no cross-examination of the applicant's witnesses, and the second respondent has indicated that at this stage he does not wish to put on any evidence. 16 In relation to the principles of law which will have to be applied on a final hearing, senior counsel for the applicant has drawn the Court's attention to the judgment of Powell J in the Supreme Court of New South Wales in Cadbury-Schweppes Pty Ltd v Pub Squash Co Pty Ltd, which was delivered on 8 August 1978, and which is recorded at the end of the Privy Council's judgment in the case of Cadbury-Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851. The relevant judgment of Powell J is set out in a footnote to the Privy Council decision at pages 864 to 869 of the relevant law report. 17 As the evidence was being read by senior counsel for the applicant, the second respondent indicated on two occasions that he wanted to say something. I invited him to refrain from doing so whilst the evidence was being led by senior counsel for the applicant. However, after the evidence had been completed, I invited the second respondent to say what he wanted to say about the matter. 18 It seems that the case which the respondents may wish to make on a final hearing is that it is perfectly permissible for a competitor to use someone else's trade name to identify a 'style' of shoes being sold by the competitor, and to do so in a prominent way both on the relevant packaging, the plastic containers, and on the shoes themselves, when coupled with the letters 'XTC'. 19 I may or may not have fully understood what was being said by the second respondent, but there was also some reference to Ferrari motor cars which led me to believe that what was being said was that there is a brand known as 'Raben' in China, for footwear, which would in some way entitle the first respondent to import and sell shoes branded with the brand name 'Raben' in Australia. As I've said, I may not have fully understood what it was that the respondents may wish to say in that regard at a final hearing. 20 It would seem to me that the applicant has made out the clearest possible prima facie case in the sense described by Mason ACJ, to which I have referred. If the evidence remains as it is, there is undoubtedly a probability that at the trial of the action the applicant will be held entitled to relief. It seems clear that the second and third tests formulated by Mason ACJ are met in the circumstances of this case. 21 Accordingly, I propose to order interlocutory relief as sought by the applicant. Needless to say the orders will be 'until further order', and I will grant liberty to apply on two days' notice so that if the respondents wish to re-agitate the question of appropriate interlocutory relief, they may do so. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.