Solahart Industries Pty Ltd v Solar Shop Pty Ltd

Part 2 No Document Part/whole subject to limitation on access 8 Exhibit 15 Clauses 5.7, 6.17, 6.20 and 6.21 only

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IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 717 of 2009

JUDGE: PERRAM J DATE: 7 JULY 2011 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 I gave judgment in this matter on 21 June 2011: Solahart Industries Pty Ltd v Solar Shop Pty Ltd [2011] FCA 700 ('the primary judgment'). In that judgment I concluded that the second respondent ('Solar Hut') had infringed the first applicant's ('Solahart') registered trade marks, 293010 and 304100, during two periods: (a) 1 May 2009 to 6 October 2009, and (b) 6 October 2009 to 7 October 2010. 2 The infringements during these two periods were different. In the initial period, I concluded that the marks had been infringed by Solar Hut's use of the word SOLARHUT as a trade mark in relation to photovoltaic systems in certain television, radio, and newspaper commercials, during telephone sales by staff, by use of a website located at the URL www.solarhut.com.au and as part of the same domain name. 3 In relation to the second period, I reached the narrower conclusion that infringement occurred by reason of the continued existence of the website www.solarhut.com.au as a device to direct persons to a different website www.sunsavers.com.au. I rejected the balance of Solahart's case. There was also a case brought by the second applicant, Rheem Australia Pty Ltd, and its case I rejected in its entirety. There remain three issues to be resolved: first, because the first trial did not deal with the issue of quantum, it will now be necessary to take steps to prepare that stage of the case; secondly, the issue of costs awaits both argument and determination; thirdly, there are issues as to the form of the appropriate orders to give effect to the primary judgment. 4 On this last issue there is some, but not complete agreement. The parties are ad idem as to the form of the declarations which should be made in Solahart's favour; as to those parts of the amended application which should be now dismissed; and as to the form of certain confidentiality orders I indicated a willingness to make in the primary judgment. The parties are, however, at loggerheads about whether Solar Hut should now be restrained from infringing the two marks in respect of which I have found there to have been an infringement. In addition, there is a dispute as to whether Solar Hut should be required to deliver up to Solahart's solicitors, for the purposes of destruction, all documents and things incorporating the use of the word SOLARHUT which would include, principally, one would imagine, advertising and promotional material. 5 As to the question of an injunction, although the matter is finely balanced, I think that the better view is that injunctions should issue. Solar Hut continued to use the website www.solarhut.com.au right up until 7 October 2010, a very long time after the commencement of these proceedings and, indeed, only two clear working days before the commencement of the trial on 12 October 2010. 6 It is true, and I do accept, that the circumstances of Solar Hut's use of the mark SOLARHUT in this second period are perhaps located to some little distance from a canonical case of trade mark infringement. My finding was that whilst it was true that Mr Branch's decision to keep the URL www.solarhut.com.au active was properly characterised as deliberate, the end he sought was not the exploitation of the SOLAHART mark but rather, and to the contrary, the taking advantage of the goodwill which had already been generated for the SOLARHUT mark by Solar Hut's prior use of that subsequently abandoned brand. 7 However, the question is whether there is some basis for thinking that there may be some future repetition of this conduct. The fact is that Mr Branch persisted with the use of the SOLARHUT mark even after the proceedings had been commenced and even after he knew that the status of the website was an issue. I expressly rejected his contention that he had simply forgotten about the matter. Those findings must contribute, by more than a trifling degree, to a suspicion that if the pressing moment were again to arise, Mr Branch, and therefore Solar Hut, might well find it difficult to resist the temptation to use the mark again. In those circumstances, a basis for an injunction is, I think, shown. 8 Mr Webb SC, who appeared for the respondents, submitted that the decision of Finkelstein J in Louis Vuitton Malletier SA v Knierum [2004] FCA 1584 provided authority for the proposition that it was necessary to establish an actual risk of repetition of the infringing conduct. It will be apparent from what I have said that I need not decide this question for, whether there is or is not such a requirement in trade mark cases, I am satisfied that a sufficient risk is shown in this case. In principle, therefore, an injunction should issue. 9 There was a further debate as to whether any injunction, if issued, should be expressed to restrain Solar Hut from infringing the particular trade marks, or whether, instead, it should be confined to restraining identified acts of infringement. Mr Dimitriades of counsel, who appeared with Mr Maddigan for the applicants, pointed to the apparent practice in patent suits of restraining, in terms, the infringement of a patent: see Coflexip SA v Stolt Comex Seaway MS Limited [2001] RPC 9 at [12]-[21] per Aldous LJ (with whom the other members of the Court of Appeal agreed). In that case, the Court of Appeal did accept that there were certain features of patents litigation which made it appropriate to issue an injunction against infringement simpliciter. There were, as far as I can see, two such concerns. First, because the form of the patents were frequently very complex, an injunction directed merely at a specific conduct could leave the infringer at large to commit other infringements. Secondly, the conventional wisdom against the granting of injunctions against conducted identified only by the words of the statute infringed were absent in patents litigation, where the parties had almost invariably been involved in substantial litigation about what the patent meant beforehand. It followed, on this view, that the respondent would not be left ignorant of what an injunction against infringement signified. 10 All this may well be true; Aldous LJ did, however, go on to say this (at [18]): That, of course, does not happen in other intellectual property cases. An injunction which just restrained breach of confidence would not be appropriate for many reasons, including because the extent of the confidential information would not have been determined. In passing off cases a change of circumstance can alter the representation made and therefore the injunction normally sets out the act which is to be prevented, qualified by such words as 'so as to pass off'. 11 The list proffered by Aldous LJ does not include trade mark cases. That absence led Mr Dimitriades to draw an analogy between what happens in patent litigation and the consideration which takes place of the context of a trade mark in a suit such as the present. However, I do not think that that analogy should be drawn. The drawing of injunctions in such a form is not a practice which is to be encouraged any more broadly than is necessary. The careful parsing of the claims made in patents litigation is far more closely involved in a dissection of what the patent means than that which takes place in a trade mark suit. I do not accept, therefore, that a general injunction against infringing is appropriate. 12 Solahart's proposed order was expressed as just such an injunction, followed by two explicit examples of the conduct sought to be restrained. In my opinion, an injunction should issue to restrain the conduct but not the infringement generally. I have not overlooked Mr Dimitriades' argument that the injunction will determine the damages inquiry, however, there is no reason to think that that function is not adequately served in the present case by the declarations which I will make. 13 I turn, then, to the issue of delivery up. There is no doubt that the court has a power in a trade mark case to order delivery up of an infringing article; Chancery certainly had such a power - see Slazenger & Son v Feltham & Co [1889] 6 RPC 531 at 538 for an example of the power being exercised. Such a power is the same in principle as the power to deal with representative proceedings in equity. Gummow J saw the nature of such a representative proceeding in equity as being 'part of the powers and procedures of modern courts of equity of which this court (in respect of matters otherwise within its jurisdiction) is one': Scarel Pty Ltd & Yates v City Loan and Credit Corporation Pty Ltd (1988) 17 FCR 344 at 349. Hence, as his Honour observed in that case, the source of the power is s 5(2) of the Federal Court of Australia Act 1976 (Cth), which creates this Court as a court of equity. That view of things makes it unnecessary to resort to the more general grant of power in s 23 of the Federal Court of Australia Act with its conferral of power to make orders of such kinds as it thinks appropriate: cf Humphries v Halifax Vogel Group Pty Ltd [2008] FCA 569 at [22]-[23] per Logan J. Of course, statute could cut down this result but it is plain that s 126 of the Trade Marks Act 1995 (Cth), which confers remedial powers on this court, although not including a power to order delivery up is couched in terms which make plain that it is an inclusive, rather that an exhaustive, statement of powers relating to trade marks. 14 It being, therefore, clear that such power exists how must it be exercised? Mr Webb SC drew attention to three matters. First, he submitted that the power of delivery up was to be seen as an aid to injunctive relief 'by removing from the defendant a source of temptation' citing Meagher, Heydon & Leeming, Meagher, Gummow and Lehane's Equity Doctrines and Remedies (Butterworths, 4th ed, 2002) at 905 [27-050]. Secondly, the materials in question - leftover advertising materials from campaigns having no further currency in respect of a brand which no longer existed - meant that the risk of temptation was non-existent. Thirdly, this was not a case, as perhaps Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25 was, where the marks in question could simply be removed from the articles to which they were affixed. 15 These submissions should be accepted. It is true, as Mr Dimitriades submitted, that the marks were used in a physical form but it does not follow that delivery up is necessarily appropriate. In this case, the material in question consists of the remnants of an advertising campaign which is no longer extant. That campaign was for the SOLARHUT brand and that brand, on any view, no longer exists having been replaced by the sunsavers.com.au brand on 6 October 2009. As Mr Webb SC correctly submitted, the metric to be applied is the risk of temptation constituted by the material in question - see Vavasseur v Krupp (1878) 9 Ch D 351 at 360 per Cotton LJ (cited by Meagher, Heydon & Leeming at 905 [27-050]). The materials in question are quite without utility and, as such, the risk of temptation is vanishingly small. In those circumstances, I will not order delivery up. 16 I make the following orders: 1. DECLARES that the Second Respondent has infringed the First Applicant's Australian registered Trade Marks numbered 293010 and 304100 during the period 1 May 2009 to 6 October 2009 by using the word SOLARHUT as a trade mark in relation to photovoltaic systems: 1.1 in television, radio and newspaper commercials; 1.2 during telephone sales by its staff; 1.3 on the Second Respondent's website formerly located at the URL www.solarhut.com.au; and 1.4 as part of the domain name www.solarhut.com.au. 2. DECLARES that the Second Respondent has infringed the First Applicant's Australian Registered Trade Marks numbered 293010 and 304100 during the period 6 October 2009 to 7 October 2010 by using the word SOLARHUT as part of the domain name www.solarhut.com.au to direct traffic to the Second Respondent's website located at www.sunsavers.com.au. 3. ORDERS that the Second Respondent, whether by itself, its servants, agents or otherwise, be restrained in Australia and without the licence of the First Applicant from: 3.1 Using the word SOLARHUT or any other sign which is substantially identical with or deceptively similar to the word SOLAHART as a trade mark in relation to photovoltaic systems or any other goods which are the same as or of the same description as goods in respect of which either of those trade marks are registered, including without limitation in television, radio or newspaper commercials, in telephone sales, on the Second Respondent's website or as part of the domain name www.solarhut.com.au; and 3.2 Without limiting sub-paragraph 3.1 above, using the word SOLARHUT as part of the domain name www.solarhut.com.au to direct traffic to the Second Respondent's website located at the URL www.sunsavers.com.au. 4. ORDERS that paragraphs 1 to 8 and 10 and 12 of the Amended Application (including the proceedings against the First Respondent and the proceedings brought by the Second Applicant) otherwise be dismissed. 5. ORDERS pursuant to section 50 of the Federal Court of Australia Act 1976 (Cth) that: 5.1 Until the end of 31 December 2013, access to the documents or parts of documents admitted into evidence in this proceeding and identified in Part 1 of Schedule A to these orders be limited to external solicitors and counsel for the parties to this proceeding; and 5.2 Access to the parts of the document admitted into evidence in this proceeding and identified in Part 2 of Schedule A to these orders be limited to external solicitors and counsel for the parties to this proceeding. 6. DIRECTS that the documents referred to in Order 5 above be kept in an envelope on the Court file marked "Confidential" for so long as the limitation on access to those documents or parts of them is in force pursuant to that order. 7. DIRECTS that, in relation to those documents referred to in Order 5 above of which parts only are subject to the limitation on access as identified in Schedule A to these orders, the Applicants file true copies of those documents with such parts redacted to be placed on the Court file. 8. ORDERS that the matter be listed for further directions at 9.30am on a day to be determined in consultation with my associate, including for the purposes of: 8.1 Determination of the costs of the parties to the proceedings to date; and 8.2 Directions for the First Applicant's claim for pecuniary relief under section 126 of the Trade Marks Act 1995 (Cth). I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.