Trade Practices Act 1974 s.52

Federal Court of Australia Act 1976 s.32

Trade Practices - Appeal - Interlocutory injunction - Misleading and deceptive conduct - Associated jurisdiction - Whether necessary to finally determine question of jurisdiction at interlocutory stage - Difficulty of challenging interlocutory order on appeal.

Copyright and Designs - Registered design - Infringement - Whether associated matter - Whether invalidity of registration of design can be relied on in Federal Court - Trade Practices Act 1974 (Cth), ss. 52, 80 - Federal Court of Australia Act 1976 (Cth), s. 32 - Designs Act 1906 (Cth), s. 39. The appellant appealed against the grant of an interlocutory injunction in proceedings brought against it by the first and second respondents, being the applicants to the interlocutory application. The appellant had been restrained from selling cricket helmets (a) in packaging which it was claimed was misleading to the public in contravention of s. 52 of the Trade Practices Act 1974, (b) which it was claimed infringed a registered design of which the first respondent was the exclusive licensee and the second respondent was the registered proprietor and (c) to which had been applied the design disclosed in the registered design under the Designs Act 1906.

Held: (1) No ground was made out for disturbing the grant of interlocutory relief in respect of the claim under s. 52 of the Trade Practices Act 1974 and as the matter would have to go to trial to be fully litigated it was undesirable to comment on the evidence.

(2) It is unnecessary that actual evidence of deception be tendered at the final hearing and a fortiori it is not necessary to support an application for interlocutory relief with such evidence.

(3) The applicants had made out a prima facie case to support the claim for an interlocutory injunction under the Trade Practices Act 1974 and accordingly the court had jurisdiction under s. 32 of the Federal Court of Australia Act 1976 in relation to related matters such as restraining the appellant from selling or advertising any cricket helmets to which has been applied the registered design under the Designs Act 1906.

Beecham Group Ltd. v. Bristol Laboratories Pty. Ltd. [1968] HCA 1; (1968), 118 CLR 618; World Series Cricket Pty. Ltd. v. Parish (1977), 16 ALR 181, followed.

(4) Although the Supreme Court has exclusive jurisdiction under the Designs Act 1906 to expunge the entry of a design wrongly made it is open to the appellant to rely upon the invalidity of the registration (if it can be established) to succeed in the proceedings brought against it in the Federal Court without the entry in the register having to be expunged by action taken in the Supreme Court.

Macrae Knitting Mills Ltd. v. Lowes Ltd. [1936] HCA 43; (1936), 55 CLR 725, referred to.

(5) There is a prima facie case that the matter under the Designs Act 1906 is an associated matter within s. 32 of the Federal Court of Australia Act 1976, there appearing to be a common substratum of fact between that matter and the matter arising under s. 52 of the Trade Practices Act 1974.

Philip Morris Incorporated v. Adam P. Brown Male Fashions Pty. Ltd. (1981), 55 ALJR 120, referred to.

(6) It is unnecessary for the question of jurisdiction to be determined finally before interlocutory relief can be granted, it being necessary only to make out a prima facie case.

Transport Workers' Union of Australia (New South Wales Branch) v. Leon Laidely Pty. Ltd. [1980] FCA 25; (1980), 43 FLR 168; World Series Cricket Pty. Ltd. v. Parish (1977), 16 ALR 181, referred to.

(7) The effect of an appeal from an interlocutory judgment usually does no more than delay the final hearing and such appeals are likely to be worthwhile only in unusual cases.

Adam P. Brown Male Fashions Pty. Ltd. v. Philip Morris Incorporated [1981] HCA 39; (1981), 55 ALJR 548; Re the Will of Gilbert (deceased) [1946] NSWStRp 24; (1946), 46 SR (NSW) 318, referred to.

The appellant appealed against the grant of an interlocutory injunction under s. 80 of the Trade Practices Act 1974.

Cur. adv. vult.

Solicitors for the appellant: Gregory & Co.

Solicitors for the respondents: Allen Allen & Hemsley.

J. J. ISLES

2. The appellant is to pay the respondents' costs of the appeal.

This is an appeal from a decision of Bowen C.J. given in proceedings brought by the applicants (who are the respondents to this appeal) against Superstar Australia Pty. Limited ("Superstar") seeking injunctions against Superstar in relation to the sale of cricket helmets. The matter came before the Chief Judge on 1 September 1981 for directions and for interlocutory relief. The interlocutory relief sought was as follows: first, interlocutory orders restraining Superstar from selling any cricket helmet in packaging which it was claimed was misleading to the public, secondly, interlocutory orders restraining Superstar from selling any cricket helmet in the form presently sold by it which it was claimed infringed a registered design of which the first applicant was the exclusive licensee and the second applicant the registered proprietor, and thirdly, interlocutory orders restraining Superstar from selling any cricket helmet to which had been applied the design disclosed in the registered design.

It will be apparent that the first claim was for an interim injunction under s.80 of the Trade Practices Act to restrain conduct which was said to be in contravention of s.52 of that Act. The second and third claims were based on alleged breaches or threatened breaches of the copyright in the registered design. As the Chief Judge pointed out, claims which are based on infringement of copyright in a registered design should normally be litigated in the appropriate Supreme Court exercising Federal jurisdiction, with an appeal to this Court (Designs Act 1906, ss. 40A and 40B). However, the applicant sought to invoke the jurisdiction conferred upon the Court by s.32 of the Federal Court of Australia Act 1976 in respect of its second and third claims for interlocutory relief. It was said that those matters, although not otherwise within the jurisdiction of the Court, were associated with a matter which was within its jurisdiction.

The following brief resume of the facts as they appeared on the interlocutory application is taken from the judgment of the Chief Judge:

"The evidence shows that the respondent is selling a cricket helmet in a box which has on its top:

On the left-hand side appears a coloured photograph of a cricketer in action wearing a blue helmet with ear protectors. Alongside this are the words 'Graham Gooch Essex and England'. Above the photo appear the words 'Endorsed by International SUPERSTARS' and further to the right the logo and the words 'Perfection in Cricket Equipment'. On the right-hand side appears a coloured photograph of a cricketer in action wearing a maroon helmet with visor. Alongside this are the words 'Kepler Wessels Qld. Australia' and above it are the words 'Endorsed by International SUPERSTARS'. On the back of the box is other printed material including the words 'National Distributor: Superstar Australia, Pty. Ltd.,' and an address and telephone number.

The evidence of Mr. Henson on affidavit and in the witness box was that the helmet worn by Mr. Gooch in the photograph was one manufactured by the first applicant for Mr. Gooch in the 1978/79 cricket season when the English cricket team was touring Australia. The ear guards were not in accordance with the registered design but were manufactured by the first applicant at the request of Mr. Gooch. He also gave evidence that the helmet worn by Mr. Wessels in the photograph was one of the helmets manufactured by the first applicant as exclusive supplier to the Queensland cricket team."

It was submitted to his Honour on behalf of the applicants that the words "test match" coupled with the other material conveyed a representation that the helmet within the box which was being sold was of a manufacture worn by players in test matches so that a purchaser would be attired with the same equipment as a test player, and that it was not true that Superstar's helmet had ever been worn in a test match by anybody. It was further submitted on their behalf that a person viewing the box would be led to the belief that the helmet was the same as that worn by the two famous cricketers shown in action in the photographs, whereas they were wearing the applicants' helmet and not Superstar's helmet. This was said to amount to a misrepresentation as to the connection between the photographs and the contents and as between the person depicted as an endorser of the product and the contents. Thirdly, it was contended that there having been a great number of the applicant's helmets sold and promoted they had become well known so that some people would be misled into buying Superstar's helmet thinking they were getting the applicants' helmet. On behalf of Superstar it was argued that in selling the helmet in the box it was simply selling an article under its own name and that no-one would be misled. It was said that Messrs. Gooch and Wessels were contracted to Duncan Fearnley to endorse Superstar's products and that it had not been proved that they were, in fact, depicted as wearing the applicants' helmet. No evidence was offered by the respondent. Bowen C.J. concluded that the applicants had established a prima facie case of contravention of s.52. This finding was attacked before us. Mr. Patterson, who appeared for the appellant, argued that a prospective purchaser looking at the box could not be deceived by it. He argued that there was no evidence of actual deception of any person.

"Upon the applicants giving to the Court the usual undertaking as to damages, pending the determination of these proceedings or further order the respondent by itself, its officers servants and agents, be restrained from:

1. Selling offering or keeping for sale, supplying or advertising any cricket helmet packaged in or sold offered or supplied or advertised in conjunction with any box the same or substantially the same as the box which is Exhibit H; and

2. Selling offering or keeping for sale supplying or advertising:

(a) any cricket helmet in the form of the helmet Exhibit J; or

(b) any cricket helmet to which has been applied the design registered number 74666 or any colourable imitation thereof."

Exhibit H was the box containing the respondents' helmet and Exhibit J was the helmet.

We are of the opinion that no ground whatever has been made out for disturbing his Honour's decision to grant interlocutory relief in respect of the claim made under s.52. (Orders 1 and 2(a)). We have ourselves examined the evidence, including the exhibits. Because the matter will have to go to trial and be fully litigated, we think, like his Honour, that it is undesirable that we should say anything more about the merits at this stage. It is sufficient if we say that, in our opinion, the decision to grant interlocutory relief on the claims for infringement of s.52 was in conformity with the principles laid down in World Series Cricket v. Parish (1977) 16 A.L.R. 181. In relation to Mr. Patterson's argument that there was no evidence of actual deception before the Court, it is sufficient to say that it is unnecessary that such evidence be tendered even on a final hearing. A fortiori, it is not necessary for an applicant to support an application for interlocutory relief with such evidence.

We now turn to consider the appeal against that part of his Honour's order which restrains Superstar from selling or advertising any cricket helmets to which has been applied the registered design or any colourable imitation thereof. It was argued that his Honour had no jurisdiction to make this order. It was argued that the claim made under the Trade Practices Act had no substance and was merely colourable and could not be used for the purpose of giving to the court the extended jurisdiction which s.32 gives to it in relation to related matters. There is no merit in this submission. Plainly the evidence adduced by the applicants in support of their claim for interlocutory relief makes out a prima facie case, see Beecham Group Limited v. Bristol Laboratories Pty. Limited [1968] HCA 1; (1968) 118 C.L.R. 618 and the World Series Cricket Case (supra).

Mr Patterson's next contention was that Superstar wished to raise as a defence that the design had been wrongly registered and that s.39 of the Designs Act gave exclusive jurisdiction to the Supreme Court to rectify the register by, inter alia, expunging any entry wrongly made. He argued that as an application could not be made in the Federal Court for expungement of the registration it was a necessary inference that s.32 did not operate so as to vest in the court the necessary jurisdiction to deal with the applicant's claim for relief in respect of the design. A variant of this submission was that Superstar had been denied natural justice in the interlocutory hearing because it had, in effect, been denied the opportunity to resist the claim based on breach of copyright in the design because it could only move in the Supreme Court to expunge the relevant entry on the register. Whatever may be the limitation on the power of this Court to deal with an issue of rectification of the register this submission is also lacking in substance. It ignores Superstar's right in the present proceedings to rely upon the invalidity (if it can be established) of the registration. It is not necessary for the entry in the register to be expunged for Superstar to succeed in the proceedings brought against it in this court (Macrae Knitting Mills Ltd. v. Lowes Ltd. [1936] HCA 43; (1936) 55 C.L.R. 725).

The appellant sought to make an amendment to its notice of appeal by adding a ground that "as the registered owner of the design is not a plaintiff or other party in these proceedings then this court or any court has no jurisdiction to entertain infringement proceedings or to make interlocutory orders".

The court refused to grant this amendment. No notification had been given to the respondent that it would be sought, seven weeks had elapsed since delivery of the judgment from which the appeal is brought and this question had not been raised before the trial judge. We are satisfied that the notice of appeal without amendment does not raise this question and consequently we do not express any opinion upon it.

The remaining question is whether jurisdiction was conferred upon the court in respect of the design matter by s.32 of the Federal Court of Australia Act. In our view there is a prima facie case that the design matter is an associated matter within s.32. At the very least there appears to be a common substratum of fact between that matter and the matter arising under s.52 of the Trade Practices Act. See Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Limited (1981) 55 A.L.J.R. 120 at p.140.

In Transport Workers Union of Australia & Ors. v. Leon Laidely Pty. Limited [1980] FCA 25; (1980) 28 A.L.R. 589 it was argued that interlocutory orders made by a judge of this court should be set aside on the ground, inter alia, that they had been made without jurisdiction. Bowen C.J. at p.593 of his judgment, decided the question whether a prima facie case had been made out (which necessarily included the question whether the trial judge had jurisdiction to grant interlocutory relief) by applying the familiar test referred to in Parish's Case. At p.602 of his judgment, Deane J. said that it was desirable that "a definite view, even if only a tentative one" be formed on the question of jurisdiction. Clearly his Honour was of the view that it was unnecessary for the question of jurisdiction to be determined finally before interlocutory relief was granted. We are of the opinion that, it being conceded that the applicants had made out a prima facie case of infringement of the registered design, there was no warrant, based on the jurisdictional argument, for refusing interlocutory relief.

An interlocutory order for an injunction is a matter of practice and procedure, see Adam P. Brown Male Fashions Pty. Limited v. Philip Morris Inc. [1981] HCA 39; (1981) 55 A.L.J.R. 548, per Gibbs C.J., Aickin, Wilson and Brennan JJ. at p.550. A decision to grant interlocutory relief is an exercise of discretion. The difficulty in the way of an appellant who seeks to challenge an order made in the exercise of such a discretion is very considerable. In Adam P. Brown Male Fashions Pty. Limited v. Philip Morris Inc. (supra) Gibbs C.J., Aickin, Wilson and Brennan JJ. at pp.550-551 cited with approval the following passage from the judgment of Jordan C.J. in In re the Will of F.B. Gilbert (deceased) [1946] NSWStRp 24; (1946) 46 S.R. (N.S.W.) 318 at p.323:

". . . I am of opinion that . . . there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal."

"However when substantive rights are not effectively determined, an appellate court should be extremely reluctant to interfere."

The present case is one to which it is appropriate to apply the above observations. The effect of an appeal from an interlocutory judgment usually does no more than delay the final hearing and that appears to be the position in this case. Such appeals are likely to be worthwhile only in unusual cases. This is not such a case.